Once again, IOD offers an abundance of learning opportunities to help you increase your product knowledge, sharpen your professional skills and get the information you need to solve problems or move your project forward. I've scanned the Business Analytics Forum Guide (BA Forum being a major component of IOD 2011) to highlight 10 ways you can come back from Vegas much better equipped to turn insight into action. Some of the opportunities are located in the EXPO, others are breakout sessions that you'll need to schedule in your Agenda Builder.
1. Play in the Usability Sandbox: Share your experience to shape product direction. Test-drive new prototypes and meet with our usability experts in small-group design review and feedback sessions. You'll also have the chance to vote on and prioritize use requirements. This year's sessions include Dashboarding (BGN-1545), Mobile BI (BGN-1549). Advanced Data Modeling (BGN-1550) and Social Networking Analytics (BGN-1554). See page 67 of the Business Analytics Forum Guide for a full list.
2. Learn to better navigate IBM Support: New
this year, our "Navigating IBM" drop-in area lets you talk one-on-one
with subject matter experts who can guide you through the programs,
processes, policies and systems you need to use for Support and
Training. We've geared these sessions to focus on increasing your
satisfaction with demonstrations and discussions focused on online
support and knowledge resources, searching and enrolling in training,
Web IDs and IBM Customer Numbers (ICNs) and using the support request
tool. You'll find it in the EXPO.
3. Drop in on our Demo Theaters: These
30-minute sessions help you lean more about topics that might not be
covered in full breakout sessions. Join our product managers as they guide you through new solutions and little-known
product features in IBM Cognos 10, IBM Cognos TM1, IBM SPSS Decision
Management and more.
4. Labs! Labs! Labs!
Our Hands-on Labs feature experienced professional instructors providing classroom-quality training. Each three-hour session takes you on a deep dive directly into a specific product to give you a greater understanding of its features and potential. Many of the nearly 20 sessions at this year's event were suggested by last year's attendees. Titles include Foundations of Predictive Analytics: IBM SPSS Statistics (BGN-3469), New Self-Serve Reporting Capabilities in IBM Cognos BI (BGN-3632) and Advanced Generated SQL Concepts and Complex Queries (BGN-3696). See page 63 of your Business Analytics Forum Guide for the full list and be sure to add these sessions to your Agenda Builder.
Our Products Lab lets you test drive our products at your own pace and on your own schedule with step-by-step instructions and direct input from product experts who are always on-hand. You'll find it in the EXPO and you can drop in any time.
Also in the EXPO, our Services and Education Lab lets you explore our training options, discover our new new approaches and work one-on-one with our consulting services team. Discover how to share your knowledge with your team back home with Web-based training courses, self-paced virtual classroom options, IBM Cognos embedded learning videos and instructor-led online training. Drop in whenever, no need to book.
5. Take advantage of pre-conference training: Get a head start on the conference with two full days of hands-on training specially priced for Forum attendees. This year's sessions include Professional Report Authoring (B51C9), Automated Data Mining (0ACG2), Data Management and Manipulation (0G5C9) and Authoring Reports with Multidimensional Data (B51C1). See page 18 of your Forum Guide for more.
6. Get certified for free: Save up to $600 by taking three IBM Software Certification exams at no charge, and take as many more as you'd like for 50 percent off the normal fee. Certification exams are available throughout the conference and a full list of certification exams is available here.
7. Boost your business leadership skills in our Business Leadership Forum: An industry-specific program for executives, managers and decision-makers. We've put together a rich curriculum of customer case studies, panel discussions and industry solution overviews focused on resolving key business challenges. Choose from 34 sessions exploring operational efficiency, customer and financial analytics, risk and compliance. Session titles include "How Banks Can Improve Customer-Centricity with Advanced Customer Customer Profitability Analytics" (LFM-2609), "Driving B2B Sales with Predictive Analytics" (LSA-2268), "Fighting Fraud in Government Services" (LGV-1999) and "Getting Business Value from IBM Watson" (LSA-3008). See page 54 of your Forum Guide for a full list.
8. Have lunch with your peers: Our "Birds of a Feather" lunches let you discuss your challenges, strategies and successes with people just like you in a relaxed and informal setting. This year's topics include BI and Cloud Computing, Professional Report Authoring, Predictive Analytics, Statistics and Support. Our Industry Lunches let you discuss the challenges you're facing and the strategies you're using to resolve them. Whether you're in Banking, Retail, Healthcare or Manufacturing, these lunches are also a great way to reconnect with friends and expand your network with new contacts.
9. Talk to Support: Schedule time with an IBM Cognos or SPSS technical product expert for 30 minutes of one-on-one attention to resolve your toughest technical challenges. These experts have deep expertise within and across our Business Analytics product portfolio, so nothing is off-limits. Just be sure to indicate the issue and/or product you'd like to discuss. Previous topics have included Integrating BI with Active Directory authentication, Recommendations for fail-over while building cubes and Predictive modeling tips, techniques and best practices.
10. Schedule a workshop: This year's event offers a wide range of in-person and interactive workshops. You'll work in small groups with experienced IBM subject matter experts to boost your Analytics Quotient (BAW-3805), explore a Business Intelligence Competency Center (BAW-3808), or become a Value Integrator in Finance (BAW-3807). A full list is on page 60 of your Forum Guide.
Organizational design around business intelligence and business analytics has been evolving over the last few years. We have seen many different types of formations and naming conventions around the business intelligence competency center (BICC), the Business Analytics Center of Practice, the Center of Excellence. They may be virtual or structured. They may report to the CIO, CFO, the CEO or a line of business. However, in a recent survey by the Business Applications Research Center, it has been found that organizations who have this formation in their organization outperform in every area that was measured.
And, regardless of the exact details of how it is configured, it appears that the most successful design is when there is both a shared service center and a larger community of stakeholders that keep in regular communication. Perhaps is it a Business Analytics Community of Excellence? We would love to share thoughts, organizational design ideas and best practices in this area. How is your organization currently structured for success?
entering the cockpit of a modern jet airplane and seeing only a single
instrument there. How would you feel about boarding the plane after the
following conversation with the pilot?
Q: I’m surprised to see you operating a plane with only a single instrument. What does it measure?
A: Airspeed. I’m really working on airspeed this flight.
Q: That’s good. Airspeed certainly seems important. But what about altitude. Wouldn’t an altimeter be helpful?
A: I worked on altitude for the last few flights and I’ve gotten pretty
good on it. Now I have to concentrate on proper air speed.
Q: But I notice you don’t even have a fuel gauge. Wouldn’t that be useful?
A: You’re right. Fuel is significant but I can’t concentrate on doing
too many things well at the same time. So on this flight I’m focusing on
air speed. Once I get to be excellent at air speed, as well as
altitude, I intend to concentrate on fuel consumption on the next set of
We suspect you wouldn’t board the plane after this discussion. Even
if the pilot did an exceptional job on air speed, you would be worried
about colliding with tall mountains or running low on fuel. Clearly,
such a conversation is a fantasy since no pilot would dream of guiding a
complex vehicle like a jet airplane through crowded airspace.
This is an often cited story by many business strategists and other
management prognosticators which I will attribute to Drs. David Norton
and Robert Kaplan, pioneers of the Balanced Scorecard. It’s intended to
reflect how critical the actual indicators are that we setup for not
only pilots but also the indicators by which you establish for your
entire workforce because these indicators will serve as the guiding
force behind their decision-making.
Why is this so important? Well, many reasons starting with the
business environment has substantially changed where no longer can a
company operate rudderless without a core set of metrics to steer each
of its employees individually and as a collective unit in the right
direction. That right direction is the enterprise strategy. The speed
at which these decisions are being made seem to have increased
exponentially in just in the past 5 years. The days of top-down,
command-and-control authority over decision-making are far from over in
deference to a more nimble, decentralized execution hierarchy intended
on keeping pace with the velocity of the related competition and
customer expectations. The need for getting relevant and actionable
information to the business users has never been more pronounced than
we’re seeing today. If you can’t react fast enough to the market
realities your customers will go elsewhere. We live in a world where
product or brand loyalties are becoming more and more a thing of the
past. It’s about execution. Good execution is about making smarter,
more informed decisions that support the organization’s goals.
These decisions being made are happening across all levels,
geographies, and functional areas of the business everyday. For this
post I want to zero in on the first question asked which falls under
measuring and monitoring the business. This question is, how are we
the executive suite is constantly measuring and monitoring overall
business performance to ensure the company is on track to meet its
strategic targets. In addition, the function leads in marketing, sales,
finance, HR, and development all the way down to the individual
contributor levels of the organization are measuring and monitoring the
performance of their area of the business too. But how does everyone
know they’re doing the right things at all times? What are their real
priorities helping the organization achieve its goals? Is it
guesswork? Is it trust-based that the entire workforce is going to
naturally make the right decisions supporting top-line goals? How can
we be so sure?
This fictional story referenced at the beginning of this post is
really about measuring and monitoring – not an aircraft – but your
business thru a tool called a scorecard.
There are personal, departmental, and enterprise scorecards. A
scorecard includes the key performance indicators, or KPIs, for which,
in the case of a personal scorecard, an employee is responsible which,
if these KPIs are correctly defined, would include measurements that,
when looked at in aggregate, support the enterprise’s top-line strategic
goals and objectives. Inevitably, there will be shared targets for some
of the KPIs in a personal scorecard either within a specific functional
area of the business (Think Marketing Director/Marketing Associate
having similar campaign targets) or as shared KPIs across functional
groups like marketing, sales, procurement, and development/manufacturing
for something like overall corporate sales targets. To illustrate what
I mean, if the organization has a revenue target of 15% annual growth
each of these functions might also have the 15% target in their KPIs.
Of course alone none of these groups is solely responsible for achieving
that total growth target but this enterprise target is still one of
their KPI’s. This shared goals can incent these groups to work more
closely together given that it’s mutually beneficial for these teams to
work together because they’re all needed to make this corporate goal.
Also, there are typically individual KPIs for their own controllable
element of that 15% growth figure that might apply. Sales will play a
role in this 15% growth target by needing to make actual sales to
existing and new customers accounts; Marketing is also integral because
they will have to generate enough pipeline to contribute to those sales
figures; Procurement will need to make sure the appropriate amount of
labor, materials and supplies are available to produce enough product;
and, Development/Manufacturing will need to have enough finished product
ready for shipping in time to meet these customer demands. Each of
these functions and the people working within these functions would also
have their own more specific KPIs that outline what their required
contribution is to achieve this top-line revenue growth goal that will
typically be measured within the respective functions too. Make sense?
actual KPIs – typically there’s about 6-10 for each individual – are
critical because they will define the actions taken by the individual
for which they’re responsible. The ultimate alignment via scorecards
composed of KPIs across these business groups, departments, divisions,
business units, etc. is the embodiment of what we call a company’s
strategy execution framework.
Harvard Business School having done a study on this framework found
that, “a 35% increase in Strategy Execution leads to 30% gain in
shareholder value”. That’s a pretty strong argument for at least taking
a harder look at it.
How do you deploy such a framework, you ask? Well, in theory it’s
very simple. You just translate the business strategy and its related
goals into a set of performance indicators that outline the targets for
which each department and employee within each department are
responsible and away you go, right? Yes, I know. It sounds easy in
theory. But, in practice it’s a little more work.
The key is working top-down with each business and support unit area
to translate their contribution towards meeting these higher level
targets so that these lower-level, cascaded measurements, or KPIs, will,
when rolled up in total, directly tie to the top-level enterprise’s
strategic goals. This ensures proper alignment of the organization
while providing an ongoing set of metrics by which the workforce can
Even more important in defining the right KPIs is the understanding
that whatever the indicators are, this will determine the individual’s
behavior so take care as you define these. Something else that makes
this framework so effective is that it makes it that much easier to
reset the workforce when those top-level strategies change. the
infrastructure is in place to restructure the scorecards. This allows
the company to adapt more quickly.
Think about deploying such a framework for your organization. The
best incentive I can give you for taking on this effort is that going
through the KPI definition process for each set of scorecards it forces
discussions across functions, within departments and at the executive
level that will expose how achievable these targets really are with the
current resources in place today and who is ultimately responsible for
what. This is just about the most important exercise I think a company
can go through to make sure it’s not setting itself up for failure
because its strategy isn’t attainable given the resources currently in
place. Once this KPI definition process is complete and everyone knows
who’s doing what and where the synergies lye it’s all about execution.
This framework sets companies up to execute well because they’ve already
identified their needs and resources at their disposal and now it’s a
matter of delivering. It’s go time.
If done right this will be the outcome for your organization:
Workforce is engaged in this process arguing the questions about
what the targets are, how to achieve these targets, searching out
solutions, debating resource needs and actions, and reaching specific
and practical conclusions.
Ultimate enterprise-wide agreement is made on the KPIs where
everyone agrees on their commitments for getting things done and accepts
Given the share and collaborative ownership of some KPIs, processes
are more tightly linked to one another, not compartmentalized among
Through this exercise the strategy takes account of people and
operational realities. Through the debates and bartering between
managers, directors, executives within and across functional areas, an
enlightened awareness of what everyone is responsible for and whether or
not they have the resources to accomplish it is realized and addressed.
People are chosen and promoted in light of strategic and operational plans.
Operations are linked to strategic goals and human capacities.
Most important, the leader of the business and his or her leadership
team are deeply engaged in the People, Strategy and Operational
processes – not just the strategic planning or the HR or finance staffs.
Lastly, this serves to expose gaps in execution levels and important resource needs.
More coming on this subject. Stay tuned. In my next post I’ll tell
you some of the best practices in defining the right KPIs for personal
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1. Before saving the websheet, make sure Excel calculation mode is set to ‘Manual’.
2. Delete all Rows and Columns beyond the last used cell before saving. Excel does not do a good job in cleaning up and there is no point having web render more than it needs to. Use Excel’s Go To Last Cell feature to find the last used cell. If the Last Cell includes empty rows and columns, delete the unused ones.
3. Use the subsets in the view when creating the Activeform, especially on the rows. This will eliminate the need for Active Form to insert a hidden sheet with the element names.
4. Delete any Named references with #Ref in them, do an Excel find to see if there are any #Ref in cell formula, check for external links and change/delete
5. Keep SUBNM formula to a minimum
6. Dynamic subsets puts a lock on the cubes which the dimension is part of. Use MDX instead.
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One summer’s day, a rooster scoured the barnyard looking for food. As he scratched the straw on the ground he uncovered a jewel. The rooster suspected the jewel might be valuable because of the way it glittered in the sun.
“The object is probably worth a lot”, the rooster thought to himself, “but I’d trade a bushel of these shiny things for a single kernel of corn.”
The primary moral, of course, is that beauty is in the eye of the beholder. …But, there’s something else to be learned from Aesop’s fable. What would have happened if the rooster had seen the bigger picture beyond his simple need for a little sustenance? He certainly would have known that the jewel could fetch much more than, “a single kernel of corn.” Because he lacked access to basic facilitators from which to discuss this discovery not much was to be gained from it. Imagine if he had collaborative access to his peers, including perhaps more wise and worldly roosters and hens with greater influence and relationships with other rooster groups, large villages, or other rooster- or hen-run businesses? If so, he might have been able to draw greater value out of this discovery. Workgroups could have been quickly setup to weigh options and determine how best to use this newfound resource. One might learn through this group involvement that the ‘jewel’ should be invested for a later date when times are not as prosperous? Maybe it could be used to purchase new equipment to update the existing company’s plant & equipment or analytics technology? Maybe it could be used in smaller bits to payoff the dreaded fox community to keep them at bay from invading the sanctity of their henhouse?
Because the enabled collaboration and feedback mechanism didn’t exist the Rooster was willing to settle for the hear-and-now need. Only he benefitted from this, not the other roosters and hens or the local community. Unfortunately, it only solved an isolated need and wasn’t effectively exploited.
This scenario is obviously entirely made up but there’s a great degree of truth in it, especially how it can impact a business enterprise. Look, ‘jewels’ exist in every organization. They don’t always make themselves known. Basically, good ideas don’t only come from the top. Or, “there isn’t a monopoly on ideas coming from only the executive suite.” They come from all over the business and can have high- or low-impacting repercussions: good and bad, that is. It’s what happens with these ideas after they’re learned that matters. A collaborative platform for wide participation in enterprise planning, budgeting and forecasting is the enabler that can take those jewels and turn them into something far more valuable that can benefit the entire organization. The key is capturing this information so that it can be acted on. Missed opportunities happen in business all the time. The individual contributors, managers, directors, and even vice presidents not to mention the C-level executives all have insights and performance-impacting contributions that can benefit the organization. But unbeknownst to the executive team, these ideas and insights into the business get lost unless there’s a channel in place for that feedback to be captured or heard.
We know the workforce is filled with employees’ great ideas; McDonald’s Big Mac Sandwich, 3M’s Post-It Notes, Sony’s Walkman, and Dunkin’ Donuts’ Munchkins are just some big-bang examples. All over the organization there’s cost savings and process efficiencies (streamlining order-to-cash), growth opportunities (expanding into new markets and product lines), and a risk awareness (unforeseen commodity/raw material price changes) that front-line employees, middle management, and even back-office workers have visibility into that necessitate a feedback loop so they are captured and acted upon.
and its planning, budgeting, and forecasting capabilities not to mention analytics power can promptly facilitate the ideas exchange process through managed contributions and enterprise-scale input and high-powered analytics with enabled comments facilitates best practices and the enterprise wide collaboration necessary to drive, monitor, and understand the business better.
A multidimensional, 64-bit, in-memory OLAP engine providesexceptionally fast performance for analyzing complex and sophisticated models, large data sets and even streamed data.
A full range of enterprise planning software requirements is supported—from high-performance, on-demand profitability analysis, financial analytics and flexible modeling to enterprise-wide contribution from all business units.
Personal scenarios created with advanced personalization enable an unlimited number of ad-hoc alternatives so individuals, teams, divisions and whole companies can respond faster to changing conditions.
Best practices suc
h as driver-based planning and rolling forecasting can become part of your enterprise planning process.
Model design and data access adapt to your business process and present business information in familiar formats.
Managed contribution makes it possible to assemble and deploy planning solutions for your enterprise and collect input from systems and staff from all divisions and locations, quickly consistently and automatically.
Integrated scorecarding and reporting— the complete picture from goal setting and planning, to measuring progress and reporting—is possible with IBM Cognos Business Intelligence.
Total control over planning, budgeting and forecasting processes is provided to Finance and lines of business.
A choice of interfaces—Microsoft® Excel®, Cognos TM1 Web and the Cognos TM1 Contributor client—allows you to work with your preferred look and feel.
built-in collaborative and social networking capabilities to fuel the exchange of ideas and knowledge that naturally occurs in decision-making processes today.
helps groups streamline and improve decision-making by providing capabilities for forming communities, capturing annotations and opinions, and sharing insights with others around the information itself.
establish decision networks and expand the reach and impact of information.
provides transparency and accountability to ensure alignment and consensus.
communicate and coordinate tasks to engage the right people at the right time.
teams are the performance management captain of the corporate ship
empowered to provide the executive team, and business and support units
with real insight and understanding of past, present, and future
performance while guiding them on what the information means to each of
their constituents and how it can be interpreted for decision making.
That is their most strategic value to the business. However, because of
the explosion of information, speed of business, growing systems
through M&A and unique information capture needs of different areas
of the business not to mention growing business practice demands, such
as regulatory compliance to meet the regional, national, and global
reporting requirements, the corporation’s most important analytical
asset, finance departments, remains mired in just completing the basic
week-to-week tasks without providing this strategic guidance. As a
result, emerging trends, exploitable opportunities, efficiency gains,
addition-by-subtraction divestitures, and M&A opportunities go
undiscovered because the analytical part of finance is asleep at the
wheel. It has its proverbial head down doing the day-to-day grind of
low-value activities where this analytical blind spot can eventually
drive the company out of business. Let me illustrate.
the 1960′s, IBM was the 800-pound gorilla in the mainframe business
whose technology supremacy went unchallenged and superior performance
went virtually unabated into the 1970′s. They were the blue suits
bearing information-based mainframes to help companies use data to run
their large – sometimes multinational – businesses with greater know-how
about customers, products, operations, and financial performance far
more adeptly than any other technology could. Yes, they were considered
the masters of product innovation largely due to world-class business
practices and industry expertise. However, Big Blue got complacent and
far too comfortable in their long held pole position. Their inflated
confidence and market share eventually disintegrated as they missed the
advent of the new information-based technology, which, if they would
have had the right analytic capabilities in place, they would have seen
it coming; the emergence of the minicomputer. Minicomputers were
technologically simpler than mainframes but with stronger computing
power while requiring less resources to run them. To be fair, it wasn’t
just IBM that missed the advent of minicomputers. It was virtually
every mainframe company in existence at that time. This new technology
virtually wiped out the entire mainframe business such that no mainframe
business would be a major player in the minicomputer business at all.
What happened? What was missed? Who screwed up?
In my opinion, there were many failures that caused this emerging
technology to go unaddressed by IBM and others, but the chief culprit
who could and should have been prepared for it was finance. Yes, I
think it’s up to finance as the owners of business performance (past,
present, and future) to fundamentally understand the business climate –
internally and externally – to then advise their corporate constituents
on what the information they’ve analyzed means to them. For this to
happen finance needs to get a handle on its core responsibilities before
it can begin to really spot these performance-sapping icebergs that can
possibly turn into business shuttering threats.
Let’s get back to the technology story for a minute if that’s okay. Then, I’ll finish my point.
Where were we? IBM’s out because the mainframe business has gone
south – way south by way of the minicomputer. Exit IBM. Enter Digital
Equipment Corporation. DEC virtually created the minicomputer business
along with a few other aggressively managed companies like Data General,
Prime, Wang Computer, Hewlett-Packard, and Nixdorf. Did DEC and others
in the minicomputer business learn any lessons from IBM’s big miss on
the minicomputer market so as to not repeat the same mistake? Of course
not. The story of DEC’s demise rings almost too tellingly true to
IBM’s mainframe debacle of the 1970′s. In fact, the management gurus
and business journals missed it too. Digital Equipment Corporation was
considered by all who had some insight into the company’s operations as
being the ultimate technology company for decades to come. For certain
it was a featured company in the McKinsey Study that became the stellar
1980′s management book, In Search of Excellence. DEC seemed
destined for monster success. Still, despite all this fanfare, DEC
missed the next wave in computing technology, the desktop computer
Again, where was finance watching past performance by measuring and
monitoring it, to get analytical insight into what the future might look
like to then advise their constituents across the business on what all
of this means to each one of them? Answer: Heads down.
The desktop computing market was predictably seized not by DEC or one
of its minicomputer compadres but by Apple Computer, Tandy, Commodore,
and IBM’s PC-division. (Yes, IBM can’t be held down for long!)
What happened next? Like Rick Blaine says in the movie Casablanca,
“Play It Again, Sam.” Apple, Tandy, IBM and the rest of the desktop
computer gang focused on making the best desktop computers they could
but ended up missing the next new, new thing. Apple Computer and IBM
lagged 5 years behind bringing the latest-and-greatest technology rage
to the market: portable computers. That market was owned by Silicon
Graphics, Sun, and Apollo – all newcomers to this market.
each case, the leading companies mentioned were regarded as the gold
standard given their product excellence and operational execution only
to be quickly pushed aside by an out-of-nowhere, technologically
superior solution that reset the market’s expectations rendering the
prior leader’s solution frumpy and stale. Missing emerging trends in
the marketplace and not adapting to them quickly enough can ring a death
knell for most companies. Think Wang, Silicon Graphics, Apollo. For
others, this misstep can set them back 5 or even 10 years before they’re
back on their feet again.
As a note, in the above example, I simply chose the technology sector
but we could have easily used the retail merchandising sector (Think
Sears vs. Nordstrom) or retail books (Think Barnes & Noble vs.
Amazon), or Automotive (Think GM vs. Toyota). Each situation is an
example of a failure to see the changing landscape which, I believe,
finance is mostly at fault for squandering these opportunities.
How come finance? I think finance failed their companies in each
instance because they weren’t effective enough in managing the
day-to-day, low value tasks which, if they had them under control, they
would have greater leverage to spend time on higher-value practices like
forecasting and business analytics to uncover data points that can help
the entire business spot emerging market forces before it’s too late to
respond. This responsibility to identify these threats and
opportunities lies squarely on finance. If not them, then who else? Be
careful because whomever you’ll name will probably expect finance to
provide them with the meaningful insight into performance results across
the business as well as external information, which, again, means it’s
incumbent on finance.
So, how does finance get to that point where it’s able to provide
this kind of insight with the resources it has because Lord knows it’s
not going to get additional headcount? Well, it all starts with finding
a way to better leverage the resources it has. This requires finance
teams to get the lower value tasks automated as much as they can so that
they can off-load these process management steps to take on added
capacity for these analytic practices.
What are the world class finance teams doing to be analytic leaders
in their industry? World class analytic finance teams have these
repeatable practices down to great consistency and repeatability from
Process: Financial close, financial consolidation, and financial reporting processes;
Process: Disclosure management-related efforts, including all external reporting, such as regulatory compliance reporting;
Solution: Identify these processes and automate the end-to-end needs through a disclosure management technology solution, such as IBM Cognos FSR;
Process: Financial, strategic, and operational
budgeting and forecasting, including Profitability modeling and
real-time analytical capabilities;
Solution: Leverage an enterprise-class budgeting,
forecasting and profitability modeling solution with real-time
calculation capabilities for high volume data sets, such as IBM Cognos TM1;
These practices are the foundational elements required for finance to
be the advisor in providing guidance to the business. Excel at the
practices mentioned above and you’re soon positioning your analytic
experts on your finance team to do the real analysis they’re supposed to
be doing. It’s incumbent upon the CFO’s finance department to provide
this guidance and leadership given finance’s role as the performance
managers for the company. It is therefore finance’s job to provide
insights into past, present, and future performance but also trends,
anomalies and market opportunities that become visible only after
thorough analysis of the information-based business results gleaned from
systems, i.e. ERP, CRM, SCM, etc. and processes, i.e. forecasting,
what-if scenario analytics, etc.
This finance role is looked to not only explain past business
performance and its financial effects but also advise and guide the
strategy in determining where to make investments with the resources at
hand. The CFO’s analytics team – finance – needs to spend its time not
on the everyday execution of basic, low value process steps, like
compiling, validating, and reconciling data for various internal and
external reporting needs but also analyzing past, present, and future to
present guidance on what’s happened, what’s happening now, and what
could happen. Only with an infrastructure in place to easily manage
these basic elements of the finance team’s mandate can the real
value-added analytic insights come to light. Otherwise, their companies
will continue to drive through its business climate with a perpetual
blind spot on what’s coming soon rendering them the next Tandy Computer,
Silicon Graphics, or Apollo.
It’s up to you finance to not let this happen.
Check out more blogs by Tim O'Bryan by clicking here!
We are conducting a BICC research study over the next month. If you have any information you would like to share on BICC org structures or any other best practices and/or would like to be a part of this research study, please drop me a line here.
Some of the preliminary content we will be looking at for the research study include:
Do you currently have an organization in place that will support the initiative and provide the proper communication and functions you need to achieve success?
If so, do you follow an in-source VS out-source BICC format?
How many people are in your BICC relative to the size of your company?
Who does the BICC report too? CFO? CIO?
What type of org structure do you follow?
I would be happy to hear any feedback/comments on this research study, drop me a line on this thread and I will contact you for more information.
Learn the value of the new IBM Cognos Planning 10.1.1 (GA November
22). You will be pleased to learn of this release as it affirms IBM’s
continued commitment to ongoing support and value-added enhancements to
the IBM Cognos Planning solution. The release fulfills our customers
latest requests with:
- features for greater ease and speed;
- improved performance; and,
- exceptional integration that improves a customer’s financial performance management capabilities.
IBM Cognos Planning v10.1.1 delivers additional functionality for
contributors (end users), faster access to data for reporting, an
improved installation features, and conformance with IBM Cognos BI
version 10.1.1 and Microsoft Excel 2010, and other key solutions.
often hear Business Analytics being so many different things that we
feel it’s near impossible to get a handle on what it really is. I’m
sure you were just getting used to the idea of what Performance
Management is and now we throw Business Analytics into the equation. To
make matters worse, there’s a great deal of prognosticators, thought
leaders, and industry analysts who still are married to the idea of
calling the space Business Intelligence. I thought it might make sense
to pass along a simple explanation of each without all of the Big 5
consulting speak that usually goes with it. So, here you are.
BI is where the historian in all of us comes out. This is where
you’re doing rear view mirror analysis, querying, reporting, with
enabled “alerts”, real-time monitoring, dashboards, scorecards, and
visualization focused on past performance. This is your investigative
practice area asking the questions ‘what happened?’ and ‘how are we
doing?’ followed by thorough analysis of the detail behind the answers
to these questions, i.e why are we on- or off-track?
Performance Management (“The Pragmatist”)
Performance Management builds off of “The Historian” to include the following: planning, budgeting, forecasting, and scenario modeling; customer and product profitability, i.e. profitability modeling and optimization; strategy management; governance, risk, and compliance;
and, financial consolidation and external reporting. Performance
Management is “the Pragmatist” who looks not only at monitoring and
analyzing past performance (“The Historian”) but also wants to then use
this past performance to help determine what the future outcomes are
expected to be (Think budget/forecast), which is based off of these past
results weighed against current conditions and intuitive insight, i.e.
the “knowns” and “unknowns” about today and the foreseeable future.
Also included is the practice of governance, risk, and compliance.
Of course, there needs to be rigor and accountability around these
processes, including stringent compliance controls to meet all
regulatory requirements. In addition, risk assessments are a necessary
component of performance management should not only your performance
assumptions (Think Risk-Adjusted Forecasting) be wrong not to mention
other business risk elements of the business including strategic risk,
market risk, credit risk, IT risk, operational risk, etc. The practice
of governance, risk, and compliance
enables customers to identify, manage, monitor and report on risk and
compliance initiatives across the enterprise, helping businesses to
reduce losses, improve decision-making capabilities about things like
resource allocation, and, ultimately, optimize business performance.
“The Futurist” looks at everything the “The Pragmatist” does but then runs what’s called Predictive Analytics
against the Performance Management data that you already have to
uncover unexpected patterns and associations and develop models to guide
what should be done next. It turns the human element in planning,
budgeting, and forecasting on its head by applying pure user-enabled
algorithms and customizable statistical analysis providing you with the
data driven answers. More simply, with predictive analytics companies
are able to prevent high-value customers from leaving, sell additional
services to current customers, develop
successful products more efficiently, or identify and minimize fraud
and risk. This is all being done by businesses all over the world
today. Predictive analytics is just what its name suggests: It’s about
giving you the knowledge to predict. [Business Analytics = [Performance Management] + [Predictive Analytics]
What if you knew tomorrow’s winning lottery ticket number? Imagine the possibilities. Quit your job? Travel the world? Buy that convertible Bentley you’ve always wanted? Addition to the house? Pay off those nagging debts? Think about the impact of knowing what a stock price will be next week, or knowing when your car is going to break down, or exactly when your roof is about to start leaking? Better, what about if you had early insight into your future health condition? Now, wait a minute! Something seems different here. With regard to the winning lottery ticket number that seems a lot more unpredictable than say, picking a stock or determining when your car is going to break down not to mention forecasting potential health concerns. It certainly is different.I’m sure you can guess the difference between predicting the winning lottery ticket number and the other examples. I’ll state it anyway. It’s because in these other examples we can draw from historical data, analytical research, individual’s input based on their experience, and a vast array of data to more accurately determine what is likely to happen. Once you know this information you can begin to do some planning for these possibilities or scenarios. Seems pretty logical, right? We know how much information is being captured today by companies about their customers, employees’s insights, internal operations and external market conditions that there’s obviously not a problem with lack of data to do this predictive analysis. Yet, in a lot of companies today this practice does not happen with regularity. Companies aren’t using their most valuable resources available for forecasting – their people and their data – to develop this in-house capability.
Look, I don’t need to tell you the advantages of knowing what’s likely to happen and how an organization can exploit this knowledge. If you’re an investment bank in 2006 and have a large amount of CDO’s and mortgage-backed securities on your books it might have been helpful to hear from these traders and other knowledgeable people in your operations that these speculative instruments were bound to go belly up. In hindsight the information was all there but there wasn’t a culture in place to gather this feedback. Prescience. Only helpful to the enterprise if there’s a platform in place to capture these insights and communicate them up the corporate tree so all are aware. Without this kind of enterprise forecasting platform the enterprise won’t die…not overnight that is. But, in the long run, it might suffer from multiple missed opportunities which could lead to a slow death by a 1,000 cuts.
The more unbiased participation you can glean from the relevant stakeholders and knowledge experts the more likely you’re going to be able to predict what will likely happen. The key is reaching out into your workforce across functional areas, remote operations, corporate support units, to gather feedback as far out into the future as they can most accurately predict with some likelihood which can then be leveraged by business unit managers, executives and other stakeholders to make decisions NOW based on this feedback. If you know something’s likely to happen in the future, say a hurricane, are you going to remain in your home if your home is in the hurricane’s direct path? No, of course not. You’re going to do everything you can to save all of your earthly possessions – maybe even your home, if possible – and get out of there. You’re acting now. Not waiting for the day of the hurricane to do something about it. This is the basis for business forecasting.
Only in obtaining honest, unbiased feedback from your workforce will you be able to trust this information to take action on it. If it’s not unbiased – meaning the figures that are produced from this effort were top-down dictated (think sales manager telling their sales rep what their next quarter’s sales figures MUST be vs. what this sales rep believes the figures WILL MOST LIKELY be – it ends up with little use for decision making. It becomes a performance contract.
This is not your mother’s forecast. You should not be repeating the same process you’ve gone through in your annual budget cycle. This forecast process has a different intention (insights for decision making) than the budget (annual objectives typically tied to performance contracts) and therefore needs to be designed and administered differently than the budget. With a forecast, benefactors of this process include more than just the executive management team but also the actual contributors to the forecast and their managers. This is because there’s now a formal means of submitting honest and real feedback about what’s really coming. Managers can then take that information and have a real discussion about the difference between what the direct report said was likely to happen and what the targets are. That gap between the two is where the real golden nugget of value exists in delivering a forecast. This changes the conversation from “this is your target, now go get it done” to something like “your targeted number which we captured in the annual budget is different than your newly forecasted number for the same thing…let’s discuss this difference and see how/if we can make up the shortfall”.
Think of the Titanic and the benefits of an early detection system. Would it have been helpful to identify that fatal iceberg well in advance of its arrival??? Duh. It was later learned that the captain of the Titanic saw the hulking iceberg well before the actual impact but, because of the sheer size of the Titanic and how much open sea was needed for it to veer off course, it was too late to veer away. This is just like your business. If the Titanic knows that it can only change course with at least 500 yards of open sea in front of it then the captain should at least be forecasting and re-forecasting in increments of 500 yards because that’s the space it needs to react. Otherwise, we know what can happen. Your business forecasting time horizon and the frequency which you update the forecast, or re-forecast, should be planned similarly.
Other related resources:
Execution: The Discipline of Getting Things Done by Larry Bossidy & Ram Charan
Implementing Beyond Budgeting by Bjarte Bogsnes
Switch: How to Change Things When Change Is Hard by Chip & Dan Heath
Lastly, don’t let the perfect be the enemy of the good. There’s no simple way to go about doing this right. Every company is different with its own politics and culture. The key is to get started with some small wins and build from there. I’d suggest you start in an area of the business that could benefit from a forecast more than others. What department needs the most help? Partner with IT and/or Finance depending on where you sit in the organization and make it happen. Get a quick win and expand. Baby steps.
Wanted to write something, so chose to write something about Cognos BI, I am new to blogging so please be considerate if you fell the content is not great enough to read or something. These are something basic about Cognos BI Reports.
IBM Cognos is the world leader in business intelligence (BI) and performance management software for the enterprise. Cognos BI provides the capability to distribute reports and dashboards with personalized content for each recipient from a single report
nDistribute reports on-demand or based on a time or calendar-based schedule, events or an external trigger
nSchedule simultaneous or sequential batch reporting jobs for multiple output formats, destinations, and views
nSupports industry standard security authentication sources and data and communication protocols and encryption standards
nCognos 8 has a scalable, multi-tiered architecture:
Single API lets programmers customize , expose, or hide any BI capability using any programming language, e.g. Java, MS .Net, C, C+.
In this blog, I’m going to highlight the critical importance of integrating the organization’s financial plan and the actual finance function in general into the operations department-led sales & operations planning process. Yes, in this sales & operations planning process, or S&OP, where future supply and demand plans are compiled, aligning the S&OP with the financial plan results in greater corporate alignment, improved information transparency, and more timely and effective organizational execution. The finance function needs to lead this effort though they’re already lord-and-master over what seems like too many critical business processes, including financial planning & analysis, treasury, finance transactional processes, compliance, cash management, tax management, and in most companies today, risk management. Adding this role to their agenda seems like it will only exacerbate an already overburdened finance team. My response is that a financial plan (and forecast), for which finance is responsible, isn’t worth the paper it’s printed on if it doesn’t align with the S&OP process. Here’s why:
Operations with finance involved in the S&OP process are able to develop a more robust supply plan and a single consensus demand plan than without finance involved. Yes, with finance actively engaged in the S&OP process, better performance can be attributable to finance, operations, and the executive team’s improved understanding of the dependencies and business context of the S&OP process given finance’s involvement in financial reconciliation to identify errors, inconsistencies and out-of- balance elements of the plan while even reducing forecast bias given finance’s role as an objective participant in the S&OP process.
The key in all of this is that each plan needs to be on a common, integrated platform, with the same level of financial and operational data detail available to both. Granular alignment is critical. This way the impact of changing an assumption or parameter on either end can be seen from a financial and operational perspective. Sure, planning parameters are still unique to each, but the impact of a parameter or assumption change in one domain is directly reflected in the other. Imagine the benefits resulting from this alignment??? Indeed, the insights developed through this integrated process enable the allocation of resources and alignment of commercial and operational activities to support the real revenue and profit drivers of the business: your customers, products and services!
Other outcomes are that the quality of the sales and operation plans themselves improve. In addition, there becomes a corporate culture shift to a more long-term, strategic focus. Everybody’s able to see the financial implications from their operational decisions. It puts everything in greater context for both sales and operations, which in turn helps the executive team make smarter strategic decisions because they’ve got greater insight into the financial and operational plans. The focus is on strategy and not on simply the veracity of the numbers. Also, improved buy-in and commitment to plans from the business results and increased cross-functional collaboration, financial modeling and planning assumptions materializes too.
Other things to consider to help jump-start this process are:
Get CFO involved in the process as an owner or co-owner communicating why finance is becoming more involved in the process and what the expected outcomes will be
Determine a common method across each planning domain for calculating the financial implications of plan changes
Set a short-, medium-, and long-term strategy for aligning these two planning domains;
Assign an overall program manager for this effort
Align these two processes on a single, technology platform that can manage each domain’s planning, forecasting, and reporting current and future needs.
I encourage you to check out IBM Cognos TM1 which has the capability to manage massive data volumes at SKU-level detail with embedded controls, simplified modeling capabilities, and ease-of-administration functionality to streamline all of your planning, forecasting, budgeting, reporting and analytic needs. It’s what I call the ‘Swiss Army Knife of Technology Solutions’.
1. If you write a book about analytics, they’ll make a movie about you. It may even star Brad Pitt: For the second year in a row, the event’s keynote speakers are co-authors of a famous book about analytics. Last year, the unlikely duo of “Dubner and Levitt” recounted their insights from the world of Freakonomics. Hollywood made that book into a documentary. This year, IOD welcomes Billy Beane and Michael Lewis of Moneyball fame. Beane, you may recall, was the general manager of the perennially cash-strapped Oakland A’s baseball team who found a new (and controversial) way to win by analyzing player statistics that other teams both overlooked and undervalued. A bestselling author, Lewis transforms a discussion about sports stats into an exploration of the nature of talent and how to identify it to maintain your competitive edge. Hollywood made Moneyball into a movie, too. Here's the preview:
3. There are precisely 46 days left to take advantage of the Early Bird Discount: Actually, it’s less than that. Take away the 12 weekend days when you’re unlikely to be at your desk, there are in fact 34 days. Of course, you can register after Aug. 31, but why pay more? Click here for registration info.
4. You can save another $100 off your registration with a single tweet: Yes, it is just that simple. Follow @IODGC2011 and tweet with the hashtag #IOD11 and we’ll send you a code through direct Twitter message (That is, if you’re OK with us following you as well).
5. You can get IBM-certified for free: Take up to three IBM software certification exams at no charge and take as many more as you’d like at half-price. You’ll save $100 per exam and come home with certificates suitable for framing.
6. Information On Demand boasts IBM’s largest EXPO. Explore more than 300 exhibitors, meet with IBM experts and see hands-on demonstrations to see what’s possible with our software, get answers to your toughest questions and try the latest products that until now you’ve only heard about. There's lots more about the EXPO here.
7. It’s not just for Business Analytics:Information on Demand 2011 is also home to Information Management and Enterprise Content Management Forums, with in-depth introductions to IBM solutions for data management, enterprise content management, information integration, master data management and data warehousing. These capabilities are fundamental to successful analytics deployment, so be sure to attend some of their breakout sessions or demo peds as well.
8. It’s even better when you bring your team: Attend with your colleagues to maximize your learning and professional networks. Divide and conquer when you can’t decide between sessions. See more of the EXPO and get more of your team excited about what’s possible with IBM solutions. Collaborate on alibis if necessary. Plus, sign up six of your colleagues and the seventh conference pass is on us! Contact the IOD 2011 Event Team for more information on our company pass discounts.
Ever sat through a presentation and thought to yourself, “I have no clue what that person just said for the past 45 minutes!” It’s the ‘you lost me at hello’ problem. Between all of the business buzzwords, consulting jargon and vendor speak it’s at times difficult to comprehend what’s really important in all of that gobbley-gook presentation schtuff. Unfortunately, a subject like Financial Performance Management is susceptible to falling into that trap. I suppose Hollywood would be making movies about it if it was that entertaining a topic. Still, this doesn’t mean there’s nothing to it. I encourage you to read on and learn more about Financial Performance Management. It’s transforming the way business is run today creating a dynamic, knowledgeable, and nimble workforce with access to the right information to make smarter decisions everyday.
What I thought I would do is write a summary of what Financial Performance Management is, which is captured in this submission, and then in future updates I would breakdown each of FPM’s five components mucxh further one by one. So, here goes…
Ventana Research defines Financial Performance Management as, “The practice of managing the effectiveness and efficiency of Finance by aligning people, processes and systems to a common set of goals and objectives.” Ouch. That sounds nice and straight forward but I still have no idea what the heck it is. Essentially, Ventana is talking about unifying all practices (people, process, and technology) typically owned by the finance department to optimize the output of this function. Still, this doesn’t help much in explaining what the heck it is, does it??? Here’s an idea. Let’s do this….Let’s look at these core Finance-owned processes which comprise FPM. I think this will help explain things better.
Each of these 5 areas are integral to an organization’s sustainability and should be institutionalized as a single practice called FPM. The more seamless these processes work together the more effective not just the Finance function becomes but also the entire organization. Finance may own these practices but every function of the organization benefits from an FPM solution because when the FPM solution is deployed properly the workforce in marketing, sales, development, operations, finance, IT and the executive team are able to view critical information about how well the business, the competition, and the suppliers are performing while, at the same time, this information is being used to provide all of the compliance and regulatory filings necessary. Yes, a single version of the truth yielding benefits for your risk management practices, your forecasting practices, your profitability modeling and, of course, your corporate reporting requirements.
Here is a breakdown of the 5 key Finance-owned processes:
1. Close, Consolidation, Report & File
Includes processes like:
Corporate & Financial Reporting
Regulatory Filing (e.g. 10K/Q, XBRL)
2. Profitability Modeling & Optimization
Includes processes like:
Product, Market, Channel Analysis
3. Planning, Analysis and Forecasting
Includes processes like:
Revenue Planning and Forecasting
Expense Planning & Control
Capital & Initiative Planning
4. Performance Reporting & Scorecarding
Includes processes like:
Scenario modeling, what if analysis
Alerts, data exploration, drill-thru capability
Scorecards & dashboards
5. Governance, Risk & Compliance
Includes processes like:
Policy & Compliance
More to come on this subject in future blogs individually detailing each of the five areas of FPM.
The evolution of the CFO from cost extractor and compliance enforcer whose primary concern had been to ‘manage the numbers’ into providing strategic support and organizational leadership helping drive profitability and growth for the enterprise certainly didn’t happen overnight. There’s been a series of events over the years driving this change, including the advent of Sarbanes-Oxley (Think Enron/Arthur Andersen/Worldcom) to today’s Dodd-Frank as well as greater internal and external demand for performance data. In addition, there’s increased CEO and board interest and oversight into the ‘World of the CFO’ where board members require more than just a simple view of the annual operating plan; They want it all now given that they have to put their John Hancock on documents like no time before. (The threat of a little jail time for malfeasance has a way of getting people to sit up straight and pay closer attention too.)
Given the CFO’s more strategic role and influence in companies today it’s no surprise that the entire finance function’s visibility and criticality requires more demands on it too. In an ideal world, the CFO’s finance department has its eye on implementing best practices to streamline inefficiencies and error-prone efforts. Yes, implementing best practices sounds good on paper but the common response I hear from finance departments concerning why they’re not being adopted right now makes me think of the Beach Boys’ tune, “Wouldn’t it be nice…if we only had the time.” (Note: Click that link if you want the actual Beach Boys song playing in the background while you read this post.)
Still, I’m consistently hearing that the goals for CFO’s and their finance departments remain the same. They are:
Linking financial to operational plans
Guaranteeing the quality and accuracy of financial numbers for timely, sustainable compliance
Tracking individual performance against strategic objectives
Performing “what if” scenario modeling and creating flexible rolling forecasts
Replacing their rigid budgets with continuous planning
Does this ring true with you too?
To read the remainder of this blog please click here.
Back in the '80s,The Frantics were Canada's answer to Monty Python. One of their recurring bits involved Paul Chato (the geeky one) inventing a new video game. Like Kramer on Seinfeld, he'd burst into the room unannounced and shout, 'Hey guys, it's ready!' Upon hearing the news, the other guys would excitedly jump around the room in a stop-motion homage to 'Neighbors,' the famous 1952 NFB short film by Norman McLaren.
For you, the SMA makes it easier than ever to share in the excitement of Information On Demand. It pulls in conference
tweets, blog posts and photos and presents them on a single page. So, if you're using any or all of the
conference tags: #iod11, #baforum, #imforum or #IBMECM, they'll show up here. The SMA
will also provide live streaming video of the morning general sessions, plus executive keynotes and interviews from the EXPO floor courtesy of Scott and Todd.
Because The Frantics were popular in the 80s, Paul's games looked like the ones you played on your Atari 2600. Because this is 2011, the IOD SMA looks a little better:
Smarter Software means smarter aggregators
What's more, the SMA scans all that content to build real-time tag clouds of trending topics and highlights the conversation leaders who are tweeting and blogging up a storm. Last year, that honor went to raving IBM Cognos 10 fan Cedric deVroey. The last time I checked this year, there was quite the duel shaping up between Christoph Papenfuss and Fraser Anderson. Now that the SMA is out there for the world to enjoy, no doubt we'll see perspectives from outside the firewall in there as well.
The SMA pulls in Tweets automatically, but if you plan on blogging you'll need to create an IBM profile or use the one you already have. From there it's simply a matter of copying and pasting a few feeds. Add any of the tags above in the body of your blog post and it will be picked up automatically to be shared with an audience of thousands. The added bonus of registering is that once you've created your profile you can contribute to any aggregator in the IBM universe.
IOD is is the biggest conference in the IBM software galaxy. Last year more than 10,000 said 'Viva Las Vegas' (a new record) and this year we're expecting even more. With that many people and that much technology coming into contact with each other I foresee no shortage of opinions, insights and - because this is Vegas - maybe the odd joke or two. So, I'll be keeping a close eye on the aggregator throughout the conference to highlight the trending topics, congratulate the conversation leaders and maybe - just maybe - throw in a poll or two.
The buzz is brewing for IOD11 and the SMA is your best place to participate and take it all in. Why not get started now?
The end-of-day update
I couldn't find the Frantics clip in question, so instead I can offer this cool animation. It was also made by Norman McLaren, who could make numbers dance as well as people. Enjoy!
If asked to describe their financial consolidation process most corporate finance teams might spit out a few unprintable adjectives as they attempt to explain their effectiveness in harnessing all of the moving parts in this bear of a process. The primary issue they have is managing all of the inputs and one-offs throughout each step, making it difficult to track or audit it because of their lack of transparency, visibility and ultimate control over it. Riddled with disconnected systems that have major control risks requiring manual intervention and maintenance (Think spreadsheet-based systems) and other standalone technologies lacking any audit control make it an administrative nightmare. Financial consolidation isn’t a stationary target either given the ever-growing mountain of new regulations, report filings, and financial governance procedures required to which they need to adapt. (Think Dodd-Frank, IFRS, and XBRL to name a few.)As I mentioned in another blog post, “Close, Consolidate, Report & File: Automation & Embedded Controls Else It’s A House of Cards“, there’s so much to manage throughout the FInancial Consolidation process including manual inputs, offline adjustments, in-process reports, and stakeholders to keep a handle on it all. We’re not talking about nice-to-have reports here. We’re talking about reported Balance Sheets, Cash Flow Statements, 10Ks and 10Qs and other monthly, quarterly, and annual reports that go to shareholders, The Street — and, oh, by the way, these results are the primary drivers of business decisions being made across the organization to run the business. Hard to believe more organizations haven’t adopted an end-to-end solution to produce credible, timely, and reliable results while allowing finance teams to really focus on the important stuff like analyzing the results, not compiling them.
To set a little context I’ll briefly walk through a sample consolidation and reporting process. See if any of this sounds familiar.
Simplified Global Consolidation Process
Imagine we’re dealing with a North American-based organization in Milwaukee, Wisconsin that has subsidiaries and international operations throughout the world. The consolidation process starts with this corporation’s subsidiaries and country-specific operations consolidating their data and producing financials for their own legal entity relationships for their local reporting and local ownership and tax purposes. These same entities capture their ‘local’ data in their ‘home’ currency through their own general ledger systems and/or receive data from manual inputs and manual processes via tools like spreadsheets. At this point the subsidiaries and countries will prepare trial data submissions in local currency which will then be fed to the corporate finance department in Milwaukee. Typically, files are securely sent to corporate as uploaded to a common repository for corporate handling. Usually, there’s a lot of back-and-forth communications with these entities and corporate while they’re preparing their data.
Corporate finance receives these data submissions from all of the subsidiaries, country operations, and/or legal entities and consolidates this information into a common reporting currency; in this case, US Dollars. From there, corporate finance will perform additional consolidation activities including inter-company eliminations, group adjustments, such as investment eliminations between subsidiaries, and, ultimately, they will perform the final financial consolidation. Once these activities are completed they will then go through the process of analyzing the financial results and circle back with different participants in the consolidation, i.e. subsidiaries, legal entities, regions, etc. and relevant stakeholders in the process where variances are to be explained. Comparative reporting is then done across periods (last year vs. this year) or against plans (budget vs. actual) or even against budget foreign exchange rates to take out any f/x anomalies which might skew the data. These results are then fed into the management reporting and corporate planning process where the real analytics and decision making ultimately takes place. Then, for financial governance, statutory financial results need to be prepared and signed off for external reporting for investors, analysts, and regulatory agencies.
Phew…and that was a VERY simplified version of this process. Believe me, there’s a lot more to this process.
AUTOMATE WITH EMBEDDED CONTROLS THROUGHOUT: ENTER IBM COGNOS CONTROLLER!
Cognos Controller is a comprehensive, Web-based solution that offers power and flexibility for streamlined, best-practice financial consolidation and reporting – all in one solution. Its full suite of capabilities delivers a complete portfolio of financial results and provides an integrated platform for financial and management reporting. Cognos Controller makes it easy to deliver financial statements and reports to finance stakeholders, as well as managers, line-of-business executives and regulatory bodies. It also provides the de facto starting point for planning, budgeting and other performance management processes.
Just a few reasons why IBM Cognos Controller 10.1:
Accelerates the close process;
Automates financial consolidation processes and accounting
Prepares and seamlessly delivers financial statements, financial reporting and analysis
Consolidates financial information in a centralized, controlled and compliant environment
Delivers a complete range of local and global consolidation and reporting requirements “out of the box” – integrated into an application framework
Provides capabilities include data collection, validation, currency conversion, minority interest calculations, inter-company eliminations, group closing adjustments, management adjustments, allocations, advanced formula calculations and compliance testing.
Provides support for consolidated financial reporting for all local jurisdictions and multilingual reporting;
Flexible processing of modifications to corporate and account structures and group histories
Integrated scenario manager for simulation and modeling
Prepares all financial statements and in-process closing reports for either validation or reconciliation;
Includes ability to configure, track and audit data flow within the consolidation process
Supports IFRS, FASB, Basel II and Sarbanes-Oxley requirements and can handle any GAAP or regulatory environment;
Low total cost of ownership
Real-time analysis, modeling, forecasting with drill-thru to transactional detail
200+ standard out-of-the-box reports built into the solution
Both quantitative and qualitative data can be entered automatically or manually
Easy to create and manage individual data entry forms and templates
Flexible to adapt and extend to custom requirements and multiple structures/dimensions/business rules
Enables attaching documents to reported figures with text notes and reporting manuals
Scalable to meet large user and data volumes
Global list of empowered customer champions
Built in integration with IBM’s performance management solutions, including IBM Cognos TM1 for extended analytical reporting and business planning for further viewing of financial and operational results, comparative plans, and extended Financial/Management reporting;
Real-time link to your consolidation with IBM Cognos Business Intelligence dashboards and other production reporting tools you might use in our overall product suite;
Offers a choice of interfaces. The familiar Web browser or Microsoft® Excel® both give users secure, ready access to data. Full Microsoft Excel functionality streamlines financial data input and formatting.
Compatible with MS SQL Server, DB2 or Oracle databases;
Up to date with latest MS Windows and Office releases;
Supports global deployments through support of most popular languages in Europe, Asia, North America and Latin America;
…and these are just some of the features of IBM Cognos Controller 10.1!!!!
Value Thru Cross-Enterprise Adoption
For external financial statement production & XBRL, IBM Cognos Controller data and reports are directly available within external financial documents developed in our IBM Cognos Clarity Financial Statement Reporting (FSR) solution.
IBM Cognos FSR is the market leading solution to control, automate and audit the “last mile” of finance, the challenging collaborative collection and assessment of data from multiple sources that must be brought together into important external documents such as 10Q, 10K or annual reports, or highly confidential documents such as board books. IBM Cognos FSR documents can access IBM Cognos Controller data and text directly, enable collaborative approval, and embed the financial information into any report. The connection is permanent, providing for automatic updates as required, including new versions of the document in future years.
Financial Consolidation and Reporting is part of a larger end-to-end process fully-enabled by our IBM Financial Performance Management solutions. In the illustration below you can see how our solutions work together to solve this larger process we call, “Close, Consolidate, Report & File”.
IBM solutions seamlessly integrated can automate all of these critical Close, Consolidate, Report & File Activities
For more information on this or other Business Analytics topics, feel free to contact me at your convenience.
When I think about the capabilities of our IBM Cognos FSR solution it
reminds me a lot of Aesop’s fable about the Ant and the Grasshopper.
It’s about preparing today for more challenging times. If you don’t know
this fable I’ve included it below as it’s so short it’s not worth
paraphrasing. The story goes like this:
I think about the capabilities of our IBM Cognos FSR solution it
reminds me a lot of Aesop’s fable about the Ant and the Grasshopper.
It’s about preparing today for more challenging times. If you don’t know
this fable I’ve included it below as it’s so short it’s not worth
paraphrasing. The story goes like this:
One summer’s day, a merry Grasshopper was dancing, singing and
playing his violin with all his heart. He saw an Ant passing by, bearing
along with great toil a wheatear to store for the winter.
“Come and sing with me instead of working so hard”, said the Grasshopper “Let’s have fun together.”
“I must store food for the winter”, said the Ant, “and I advise you to
do the same.”“Don’t worry about winter, it’s still very far away”, said
Grasshopper, laughing at him. But the Ant wouldn’t listen and continued
When the winter came, the starving Grasshopper went to the Ant’s house and humbly begged for something to eat. If you had listened to my advice in the summer you would not now be in
need,” said the Ant. “I’m afraid you will have to go supperless to bed,”
and he closed the door.
Get your house in order so that when the onslaught of work comes you
can focus on the right things. IBM Cognos FSR is one of those solutions
that helps with that “preparation” and the FSR solution can grow with
those changing regulatory, compliance, and performance reporting
requirements. I spoke with our Product
Marketing Director, Dan O’Brien, about IBM Cognos FSR and how he
explains the capabilities to our customer base. He said the hardest part
is explaining how transformational this software is for finance
departments. It’s almost like “selling cars to people still
using a horse-and-carriage. This solution is so far advanced that a lot
of customers find it hard to believe that it can really work that
seamlessly.” No buggy whips required. I’ve seen the technology in action
and its pretty incredible.
Look, we all know that today’s hyper kinetic, ingloriously
competitive business climate is calling for organizations to react and
respond more ably than ever before while at the same time these
organizations are being asked to comply with increased regulatory,
compliance, and external reporting requirements showing no signs of
Analytically-driven organizations are not wasting time while these
ever-changing, always demanding disclosure management-related processes
spiral out of control. At risk is more time robbed by these lower value
activities from the real analytical and predictive research finance
needs to be doing that’s the most value added. Also, we know the
outcome of reporting late or reporting the wrong numbers. Why not take a
look at IBM Cognos FSR???
Top performing companies have found a way to manage these additional
regulatory and external reporting requirements through the use of IBM
Cognos FSR. This solution has raised the bar in not only managing the
disclosure process, including XBRL capabilities, but this solution also
has assisted organizations with their performance reporting needs too.
This solution can automate and manage the complex tasks of collecting,
editing and reporting various performance and financial data for
finance, treasury, reconciliations, portfolio and asset management,
audit, and risk management, etc.
Reporting now requires structured and unstructured information which
is highly susceptible to errors, especially when handled manually to
edit, review, and publish that data into narrative management reports.
So get out ahead of these manual intensive, error-prone processes and
leveraging an integrated solution that can automate and effectively
manage these tasks because the pace of change for what’s being expect of
the office of finance and it isn’t slowing.
I encourage you to take a look at IBM Cognos FSR and see what it can
do for your organization because there’s only more changes coming. Be
prepared for it with IBM Cognos FSR.
“The art of war teaches us to rely not on the likelihood of the
enemy’s not coming, but on our own readiness to receive him; not on the
chance of his not attacking, but rather on the fact that we have made
our position unassailable.” – Sun Tzu
For more information on IBM Cognos FSR, click here.
Hope you enjoyed.
Tim O'Bryan/IBM Business Analytics Software IBM More of my blogs @ http://ibm-business-analytics.com
IBM Cognos TM1 is like a Swiss Army knife – it has capabilities to do a
lot of different things extremely well. One of the practices it’s
being utilized for with incredible results is an emerging, but no so
well understood, practice entitled profitability modeling and
optimization. The power of IBM Cognos TM1 is the primary reason this
practice has emerged. Companies adopting IBM Cognos TM1 as the
technology of choice for this practice is the primary reason they’re
thriving moving from ‘also rans’ to industry leaders. Still, this post
is less about IBM Cognos TM1 and more about the process, Profitability
Modeling & Optimization.
When talking about profitability modeling & optimization it’s
more illustrative to start with the ever-important strategic element of
price. It’s that set amount that can make or break a product or service
or even the company’s acceptance by the marketplace. Price, of course,
is most often set by what the market is willing to pay for this product
or service. A lot of factors can go into your pricing strategy
including things like the brand equity and image of the product or
service (Think Tiffany’s), expected sales volumes (Think economies of
scale), competitive factors (Only game in town?), or if it’s a new
category being created. Of course, we know that companies profit by
selling this product or service at a margin greater than its cost.
Then, a profit is turned.
Now, what you do with those profits is then up to the company to
decide. Do you reinvest those profits? Most do. If so, how do you
allocate them across the business for the most profitable return?
Maybe you even want to release some of them to shareholders via
dividends? What about making acquisitions? These are important
decisions to make based on what the future needs of the business are.
This is a good problem to have.
Enter Profitability & Optimization.
To sustain competitiveness in the marketplace organizations must be able to model their profitability to maximize profits and optimize the components to profitability that incur costs.
Most companies are performing some form of profitability and
optimization activities everyday. The BIG difference is that some are
much better at it than others. Why is this? What separates them from
the others? It comes down to the best-in-class organizations investing
in their people, the related processes, and a capable technology.
Ask yourself the following questions:
What degree of insight do you have into product, customer, and market profitability?
How timely and reliable is this information?
Is the information in one system or do you have to make phone calls,
send emails, query multiple databases and compile it together into a
spreadsheet to make sense of it and even then it’s incomplete?
Can you perform ad hoc analysis on that information to answer
questions about the data to complete a thought process or run a
Are you able to quickly understand anomalies/outliers in historic data?
Are you able to quickly explore cause and effect?
Do you understand the drivers that both impact and are impacted by price & cost?
Now, how would your colleagues in Sales, HR, Marketing, IT, Operations, etc. answer these questions?
It’s critical to know that every area of the business is looking at
some element of profitability. Running scenarios, what if, and
profitability analysis with a 360-degree viewpoint of the data is the
lifeblood of value-added analysis for making smarter decisions which, if
done effectively, translates into better corporate performance.
Without better insight and understanding of the information derived from
profitability modeling and optimization, business users are forced to
go on their gut and/or out of date information — or, worse, they’re
waiting until they do get the information they need before they can
act…tick, tick, tick. Time is money.
If you and the rest of the workforce don’t have this information at
your fingertips don’t fret because you’re not alone. However, things are
changing. Companies today are investing more and more into this
practice area as technology has caught up in a way that’s allowing for
massive data volumes to be sliced-and-diced in seconds for this very
Now is the time to act. The technology is there so I’d ask why isn’t
your organization there too. Hustle up. I know a lot of companies
that are doing this practice very well – and some that aren’t
unfortunately. They’re the ones looking to leverage IBM Cognos TM1 to
put them on the path to better PM&O.
If you want to know more about this subject feel free to email me to discuss further.
Click here to see more resources on IBM Cognos TM1.
More Blog entries @ http://ibm-business-analytics.com
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