“Get your house in order.” This expression is referenced everywhere. I hear politicians repeatedly using it: “Before we start talking new taxes or entitlement reforms we gotta get our house in order.” Sports figures too: “We had a great practice today but, before we think about competing for the division title, we gotta get our house in order.” Celebrities aren’t immune from invoking it either: “Like, I totally want to hit the party scene again but, since I like just got out of rehab, I like think I need to lay low and totally like get my house in order first. One more thing…do you know where I can get a drink around here?” Okay. Maybe that last one’s a stretch.
Relating this expression to the processes owned by the finance functions at corporations, the house that most often needs to get in order is the Close, Consolidate, Report & File process, or CCRF. The timeliness and accuracy in this process is pivotal for company survival. Still, many companies struggle with this process for many reasons. Some of these reasons are that businesses are still using multiple opaque and rigid systems lacking any integration capabilities to seamlessly align each of the activities like the required disclosures and governance of financial statement reporting. Also, and most frequently, there are poorly trackable and error-prone manual inputs or overrides to the data as spreadsheets and stand alone documents are often used in this process. A lot of companies are using out-of-date and misappropriated tools without any audit-able workflow management system. This time consuming, labor intensive approach leads to unnecessary delays completing the CCRF process in a timely and reliably accurate manner. As a result, there’s little trust from the business users that these performance results are indeed accurate. Therefore, the figures become largely ignored by the business users rendering them useless for business insight. This leaves the workforce normally relying on these results to help make their strategic decisions forced to act on their gut or intuition. Not good….and I haven’t even gotten into the ramifications of disclosing incorrect information to regulators or shareholders!
The Close, Consolidate, Report & File Process
FINANCE: LIKE THE MYTHOLOGICAL ATLAS THEY’VE GOT THE WEIGHT OF THE WORLD ON THEIR SHOULDERS BUT LACK THE MUSCLE TO HOLD IT UP
Finance departments are already overburdened with newfound regulatory, compliance, and financial reporting requirements not to mention new disclosure expectations and the forthcoming global XBRL initiative while being pushed to be more analytical and insightful about “what the data is telling them” in regards to critical business impacting activities like market analytics, customer profitability, predictive analytics, scena rio planning, etc. Yes, the rising water level of requirements falling under their purview shows no signs of abatement. Yet, empirical research backed up by the likes of The Hackett Group, APQC and the IBM Global CFO/CIO Studies, shows that these finance departments continue to shrink in size relative to revenue at a time when they should be growing. What’s wrong with this picture???
In summary, Finance is facingexternalpressures from the following:
Volatile and uncertain economy,
Compliance with new regulatory and financial reporting requirements means increased workloads,
New disclosure requirements and global XBRL mandates means more work within tight time frame,
while having to respond tointernalpressures from the following:
Evolving role of CFO and the Office of Finance
Need to liberate finance professionals from manual and complex processes
Executive management needs timely and accurate reports to respond to market opportunities in very short time
Changing Events & Regulations Since 1999
THE ANSWER: AUTOMATION THROUGH AN INTEGRATED SOLUTION
A controlled, automated, audit-able CCRF practice is required for finance to be doing the right things. Finance teams are re-engineering their financial close processes to individual close, consolidate, report & file activities. To manage and monitor these processes, they’re investing in integrated solutions that can automate these activities into a unified, secure solution. Implementing this integrated CCRF solution provides instant benefits by automating administrative tasks with embedded controls to allow finance to focus on analysis and other high-value activities. CCRF practices are no longer simply about closing the books, consolidating the data while running inter-company eliminations, minority interest calculations, and currency translations to come up with ‘the numbers’ before finally publishing them out on some financial reports. No, there’s additional disclosures and financial governance required. To get ahead of this one you’ve got to implement a CCRF system to manage it all else the levee will break and we know what happens then.
Find out more about how to automate this process because it’s not going to shrink in requirements. So, get that house in order or I’ll invite that celebrity I referenced earlier over to your house for dinner. :)
It's a conversation that's long overdue and if you’re at all interested in getting in on it, I strongly suggest adding a few sessions from the Social Media & Customer Analytics track at Business Analytics Forum. It’s a new track this year, and – full disclosure here – the one I’m most interested in covering. Social media activity is driving explosive growth rates in unstructured data. And whether you’re working for a restaurant chain, a fashion brand or global technology vendor - you need to make sense of it all if you're going to stay in the game. These largely technical sessions will help IT professionals understand our current offerings (including IBM Cognos Consumer Insight, IBM SPSS Modeler and IBM Coremetrics) and how business professionals can use them to create more targeted marketing strategies, build predictive models that reduce churn and that ultimately transform all that unruly data into actionable insights.
Like business intelligence, all over again
Your reasons for pursuing a social analytics strategy should be a lot like the ones you used to pursue business intelligence in the first place: too much data in too many places that take too long to report on, for too little insight. The only difference is that now, all the data lies on the other side of the firewall. And much like your first business intelligence deployment revealed opportunities to cut costs, boost revenue and manage risk, your social analytics deployment will help you build a strategy to analyze sentiment, identify influencers and turn customers' frowns upside down.
Predictive Social Media Analytics (Session BSC-1539): Graham Mackintosh and Olivier Jouve of IBM will show you how to proactively monitor and manage consumer-generated content about your brands, categories and products. You’ll see how to combine this information with customer data to inform marketing strategies and predictive models and to optimize campaigns.
Using IBM Cognos Business Intelligence and IBM Cognos Consumer Insight (Session BSC-2761): Christopher Wright will illustrate how to address all aspects of your social media investment, view historical, real-time and predictive information, perform scenario modeling and planning to investigate issues, and use real-time alerts, workflow and mobile applications to monitor the pulse of the business.
Watson Update: After Victory on TV’s Jeopardy! What Comes Next? (Session BSC-3556): Bernard Spang will provide an overview of Watson technology and show you how it relates to exciting initiatives in natural language analytics now and in the future.
While we're on the topic of social networks, don't forget to expand your own network in person while you're there:
if you can’t wait until October and would like a head start, why not sign up for our August 25 Webcast? It’s called “Making Chatter Matter: Monetizing Social Media Through Analytics.” It features Don Pepper and Graham Mackintosh and it will show you how to move from seeing social media as a “shiny object” toward an integrated element of your customer interaction strategy.
We’re less than two weeks away from the IOD Early Bird deadline of Aug. 31. Ready to register? Click here.
Remember the Tom Cruise and Colin Farrell movie, The Minority Report??? For those who don’t recall this movie it’s a science fiction thriller based in the year 2054 where Tom Cruise plays Captain John Anderton, the chief of the Washington, D.C. PreCrime police force. The movie’s other star, Colin Farrell, plays the Justice Department’s auditor in charge of evaluating the PreCrime unit’s strategy and tactics before the program goes nationwide. The PreCrime unit has been very successful having prevented any crime from being committed for over 6 years since its implementation apprehending criminals before they’ve committed their future crime based on what they call foreknowledge. In other words, this department has predictive insights into these future crimes allowing all in the community to sleep safe and sound knowing they’re being protected from the bad guys. (Look, I know there are multiple holes in this story (Think of the legality of a pre-crime arrest) but, it’s a movie, so you gotta seriously suspend your disbelief like in most movies.) Yes, I’m sure you’re thinking this is an extreme and unrealistic example of how predictive analytics can revolutionize the way things are done. Or, maybe this movie’s storyline isn’t that unrealistic???
Enter the Santa Cruz, California Police Department. Just like most police departments (and businesses for that matter) the Santa Cruz police department spends a majority of their time allocating their existing resources most effectively to produce the best bottom line results. These bottom lime results being fighting or preventing crime while protecting the safety of its community. Apart from identifying who the specific individuals are that will be committing these future crimes like was the case in the PreCrime unit in the movie, The Minority Report, the Santa Cruz Police Department is able to identify specific times and actual locations where crimes are most likely to be committed using their own set of predictive analytic capabilities. This allows them to proactively be there and wait for these crimes to unfold and swoop in before anyone or anything is put in harm’s way. They call it predictive policing which utilizes ‘Predictive Analytics’ to make better decisions about the future. Predictive analytics encompasses a variety of techniques from statistics, data mining and game theory that analyze current and historical facts to make predictions about future events – to identify patterns or likelihoods of afuture outcome – in this case, crime. Erica Goode of the New York Times says that, “Santa Cruz’s method (of predictive policing) is more sophisticated than most. Based on models for predicting aftershocks from earthquakes, it generates projections about which areas and windows of time are at highest risk for future crimes by analyzing and detecting patterns in years of past crime data. The projections are recalibrated daily, as new crimes occur and updated data is fed into the program.” Amazing.
Predictive policing is working so well that it’s being employed by other police departments around the nation. Besides it being an effective way to fight and prevent crime it’s a cost-effective and efficient way to leverage resources, especially in light of shrinking police departments trimmed by the global slowdown. Erica Goode goes on to say in her excellent article that, “efforts to systematically anticipate when and where crimes will occur are being tried out in several cities. The Chicago Police Department, for example, created a predictive analytics unit last year.”
Besides wanting to share this incredibly interesting story with you showing how far we’ve come as a society in leveraging data to make better decisions, I also wanted to use it as a way to illustrate how using predictive analytics to manage your organization’s resources (read make better decisions) based on knowing what the future will most likely look like applies to business and government just as well as in policing. Think about it. Why shouldn’t corporations employ a similar approach in how they run their businesses? And, Police departments aren’t stopping there. They’re now thinking about “Crime Forecasting” to understand future events to ensure they’re prepared for what this future will most likely require of them. The question is, where is your business on this predictive analytic path? Better, where is your competition?
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.
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.
Books. There’s all genres. Business. Nonfiction, Fiction, History, Current Events, Biographies, Mysteries and on and on. Whatever the genre there’s nothing like a great book. They can entertain you, inform you of information you’d otherwise never know, challenge your thinking, and even change your life. Many people like to read so much that they’ll take on multiple books at a time each serving a different purpose: one, current events; another, fiction; a third, history; a fourth, humor, etc. I suppose the thinking is that depending on their mood they’ve got a book to satisfy that moment’s interest. If you’re in this camp then you know you can easily end up bouncing from book to book, day to day slowly chipping away at each one.
Sound familiar to anyone?
The only problem is that over time you end up adding more and more new books to the already ‘in progress’ collection. As more and more books are added to your bedside collection eventually as Robert Plant from Led Zeppelin sings, “when the levee breaks” you sheepishly put one unfinished book after the other back on the bookshelf because you can’t possibly ready all 20 or 30 books at once!!! At this point you’ve safely returned to your 3-books-at-a-time maximum only to repeat the overload cycle again in no time.
A funny and clearly harmless situation that happens to a lot of us. This is what can happen when someone is left to their own devices unchecked without any accountability. What if there were larger consequences for not completing these books? Maybe there were some higher priority books that needed finishing over others? Maybe one of the books was a library book or a borrowed book with a timeline associated with it? Maybe some books were started because they were more fun to read than the less interesting ones with a time sensitivity attached to them? Maybe one was for a book club where there was a shared interest in its completion so they reader could add value to the reading group? If any of these situations applied we are probably more likely to become extremely serious about one book over the other so we’re essentially prioritizing our reading. Again, a harmless example but I think it’s illustrative of the competing priorities we might have in our jobs too.
Well, why should it be any different when we’re talking about our job-related actions? We are constantly having to prioritize our most important tasks or objectives, both long and short term. If the organization places critical importance on certain goals and objectives whereas everything else is considered less critical wouldn’t the organization want to ensure the workers and the entire workforce is being measured against those goals and objectives on an ongoing basis so ‘every chapter is read’?
A common way to measure and monitor this performance is through the use of key performance indicators, or KPIs. A Key Performance Indicator is an industry word for a set of financial and non-financial measurements used by an organization to assess its success or the success of a specific activity in which it is engaged. A KPI is a business metric used to evaluate crucial factors to the achievements of a business objective for an individual employee of the company, a group of employees, or the entire organization. KPIs aren’t a one size fits all thing. They differ for every organization. For example, KPIs may be something like net revenue or some customer loyalty metric. In the case of the government, a KPI might be the unemployment rate.
A KPI allows an organization to monitor whether it is on track or not. KPIs serve to decrease the intricate nature of organizational performance to a small number of key indicators so as to make it more digestible for us. KPIs are used in our personal lives too. Think of a doctor measuring things like blood pressure, cholesterol levels, heart rate and our body mass index as important indicators of our overall health. KPIs we are trying to accomplish the same in the organizations.
Assigning the right KPI’s is less art and more science. A little tip for you…Be careful because what you’re measuring yourself and other individuals in the organization by is ultimately going to reflect how you all behave. For example, if a purchasing manager is being measured only by cost, they’re likely to start ordering in bulk and paying suppliers late. Good for the purchasing manager, bad for business. This is because the purchasing manager may have been ordering a lesser quality material, the inventory resulting from bulk ordering may outstrip any benefits from ordering in bulk, while the supplier relationships may suffer. Bad for business all the way around. The metrics by which people are measured drive their behavior so be careful what KPIs you select.
Selecting the Right KPIs
First, define the success criteria and then choose the best 5 KPIs which the employee will be measured. Involve the employee in question in the process of determining their KPIs. This is critical and will ensure there’s a feedback loop in place which is important as you might have missed a nuance that the employee can shed light on and, besides, you want the buy-in from the employee as the eventual KPI owner and a good way to get it is by collaborating with them about what the KPIs should be. From there the employee will look at ways they can influence those KPIs. If you do this correctly, KPIs can drive the behavior. As Peter Drucker said, “you can’t manage, what you can’t measure.” That said, establishing KPIs will provide that accountability necessary to empower your employees to do the right things and take ownership of them.
First, define your success measures. These might be, how well are we satisfying our customers? How well are we managing risk? …or innovating? …or managing our costs? Then, you will want to define the KPIs that make up that success measure. The KPI might be willingness to recommend, customer retention or loyalty. Those measures can be converted into metrics which can have goals attached and history for comparisons. Once assigned through a collaborative exercise between the individual, their management team, and perhaps an outside consultant they can drive behaviors that foster the team effort companies relish. The employee is most likely going look at the drivers that can effect their measurements and see where the other influencers are in these measurements. It can force greater collaboration among these groups with a sense of “team” that never existed before. Suddenly, programs will spring up to ensure those measures go in the right direction. This is what accountability and ongoing measurement of what’s important will ensure these individuals will focus on the right things and evaluate their priorities as they go about their jobs.
Take a deeper look at the impact of measuring and monitoring performance through KPIs. It can make a difference in getting everyone acting with purpose-driven intent not roving around rudderless.
Organizational discipline around doing the right things (read purposeful action) is critical to outperforming the competition. As Van Morrison sang on his excellent album The Philosopher’s Stone, it’s “not supposed to break down” but a lot of times achieving your goals, personal or professional, do break down because people inevitably get distracted by other non-essential projects because a lot of times they get distracted by doing the things they ‘like’ doing over others just to keep busy. Then, before you know it they’re putting that ‘must be completed book’ back on the shelf with still unread chapters.
Get started with this in your enterprise through small successes. Promote those successes and expand from there. Slow and methodical. If possible, address the most needy area of the business first.
Tim O’Bryan/IBMEmail: email@example.com://provenpractices.wordpress.com
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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It is recommended to test the content of the site in the lab, before making use in the production environment & use it completely on your risk.
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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+.
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.
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.
Leveraging IBM OpenPages & Cognos Clarity for Risk Management, Disclosure Management and XBRL
In yesterday’s Financial Performance Insider Webcast, a monthly webcast series brought to you by Business Analytics software at IBM, we delivered business content to our global customer community highlighting important business practice updates about today’s ever-evolving regulatory, compliance, financial reporting and risk management landscape and how finance, IT and risk management teams can better prepare and arm themselves for effective stewardship of these market realities. In addition, we touched on how enterprises can leverage IBM solutions, in this case, IBM OpenPages and IBM Cognos Clarity FSR, as part of the Business Analytics software solution suite to enable these practices most effectively. As mentioned, these IBM solutions can help automate and manage these related processes driving value through improved efficiencies and greater transparency to ensure proper regulatory compliance is in tact and enterprise risk is effectively managed and monitored. This ability to deliver integrated solutions across these critical practice areas all in the face of changing business strategies and the evolving external demands on the enterprise is critical to IBM delivering business value in its solutions for its customer community. Peppered throughout the webcast customer success stories were discussed proving the real-world value these solutions deliver for organizations worldwide. In addition, empirical research about the state of enterprise risk management, disclosure management and XBRL were discussed to provide greater context for how critical these processes are and are only going to get more and more complex over time thereby reinforcing the urgency to start building a more robust infrastructure around these vital business processes.
In the webcast, we featured the 3 IBM Product Marketing leaders including IBM’s Doug Barton, WW Product Marketing Lead for Financial & Risk Analytics, Dan O’Brien, Product Marketing Director for IBM Clarity Systems, and John Kelly, Product Marketing Director for IBM OpenPages.
There were many valuable nuggets of information to extract from each of their presentations too numerous to mention but to summarize their presentations down to a few topic areas would be that they each highlights that there are certainly traditional challenges facing finance and risk departments in today’s business environment only now with emerging complexities becoming more and more demanding on these departments as we look down the road at what’s coming. These summarized areas discussed were:
Transparency, rating agency and regulatory demands for risk and compliance information;
Electronic filing requirements (Think XBRL); yet
No relief on what Doug called, “the “performance imperative”.
Many of those present on the webcast work in publicly traded organizations and have seen shorten filing deadlines and an ever expanding workload…and yet the “last mile of financial reporting” has largely lacked true, analytic and collaborative technology support.
That was clear. Yet there is hope. Doug mentioned the results from the CFO Executive Board survey at the end of 2010, discussing the changes in finance budgets to reflect these new concerns for finance and risk management teams.
There are certainly many challenges facing finance, IT, and risk management professionals today to address myriad practices on their agendas today. As Doug, Dan and John reinforced throughout the webinar, Business Analytics software at IBM has a solution portfolio through solutions like IBM Clarity FSR and IBM Openpages that can harness, automate and enable effective management of these practices.
Click the image to find out more about IBM Cognos Clarity
What ROI have other IBM Cognos customers gained from using our solutions?
There are many, many IBM customers leveraging IBM OpenPages and IBM Clarity FSR solutions to enable their disclosure management, XBRL and risk management practices, some of which are discussed during this webcast.
A few customer success stories discussed were:
Omnicom Group - In first two years Omnicom was able to increase cash flow by $200M by lowering accounts receivable balances greater than 60 days by 3.5%.
United Technologies - 20% savings efficiently addressing new XBRL and “last mile” demands putting into practice IBM Clarity FSR. They use IBM Clarity FSR to deliver all of their required regulatory filings 10 Qs and 10 Ks – pulling information from dozens of G/Ls and supplemental data sources. Automating this process to supported both core external reporting process and integrated XBRL tagging in a single solution without errors
Barclays - Reduced cost, improved efficiency and effectiveness, a better overall view of risk and compliance posture and the dependencies between them, and implemented a IBM Business Analytics platform used extensively by the business, particularly when completing risk and control assessments.
In addition, the presenters drilled deeper into our solutions that address these key processes:
Click the image to find out more about IBM OpenPages
How much of a learning curve is there with FSR? Very little – since you will be using the familiar tools of excel and word with added functionality
Does IBM Cognos Clarity FSR have SEC EDGAR HTML as an output option? Yes, our latest release of FSR supports EDGAR conversion – giving our SEC reporting customers a single integrated solution for report building, XBRL tagging, and EDGAR conversion
(XBRL) Do I have to tag every Q and K that I produce in FSR? You will do most of the heavy lifting during the mapping and tagging of your first XBRL filing – after that you can re-use the tags when you roll forward the report to jump start the next period’s report
IBM Cognos Clarity FSR: Does FSR only automate consolidated external reports? Do you have any customers that use FSR for automating internal reporting? FSR can be used to automate and enhance controls over any multi-author process driven reporting. We have many customers that use FSR for external reporting, as well as internal reporting.
Hope you enjoyed. Please let me know if there's additional information you need or questions.
Ever been the San Francisco? Great place, huh. Well, even if you haven't I'm sure you'd recognize an image of the Golden Gate Bridge without fail. Among many other unique characteristics it's got that unmistakeable burnt orange exterior and seems to perfectly blend in with the environment around which it stands. Stunning. Built AND assembled in America soup-to-nuts. A feat of engineering representing man's force of will in de facto equilibrium with nature. The same can be said about the Golden Gate Bridge's lesser known sister bridge, the Bay Bridge. But, the Made In America stamp on the Bay Bridge is soon going to change. As reported by David Barboza in yesterday's New York Times, the massive outsourcing project that's in place today to build the "eastern span" of the San Francisco Bay Bridge - Yuerba Buena Island to Oakland - is being done not in America or Canada or close by Mexico (Hello NAFTA!) but in...(wait for it)...China. Shocked? Doubtful.
This 21st century go-to-production model is certainly not a new wave in business strategy but it's certainly a trend emerging more and more as the rule more than the exception. Think Apple and its product development and manufacturing strategy for starters. Many others are right there too but this is the first multi-billion dollar municipal project farmed out to a foreign country thousands of miles away in Shanghai, China. As Bob Dylan said, "The Times They Are A Changin" ...and are gonna keep on...
I am not looking to discuss the virtues of outsourcing nor am I wanting to discuss the potential risks resulting from a heavily-weighted strategy leveraging a long line of supply chain partners in a corporate build strategy. What I'm more interested in is that there are changes in the way we run our businesses to adapt to this new outsourcing, global supply chain-dependent strategy that we need to consider. The changes are that the United States and many, many other countries around the globe are becoming more and more knowledge-based in their corporate philosophy and less and less manufacturing-based. We certainly can't stop this tide as there are serious downstream consumer benefits that exist that must be appreciated as the big box retailers take over the world and deciding on the cheapest yet best quality alternative. There is a sheep mentality out there where companies better find a way to produce high quality products at a low price or they'll be extinct before you can say Edsel.
Given these shifting sands, what we can do is think about whether or not we now have the proper instruments in place to measure and monitor how these businesses are operating and performing. Currently, our external reporting requirements here in America are based upon early-twentieth century created Generally Accepted Accounting Principles, or GAAP, which are designed to reveal important information about companies (think railroads, automobile makers, and manufacturing enterprises of all kinds) that then dominated the U.S. economy. These companies were from the old school industrialized economy model where their value was inherently based upon the assets on their balance sheet. (Think purchasing plant, machinery, equipment, rolling stock, and other units of production from suppliers.) WYSIWYG. 'What you see is what you get' transparency where the costs of these assets were recorded on balance sheets and depreciated over time as they were used to generate revenues. Balance sheet values thus roughly reflected the cost of replacing the company as a whole, and the company’s earnings reflected the costs of producing the goods and services that were responsible for its revenues. Pretty simple, huh? Nice. Well, that reporting model works nicely when you're in a simple manufacturing-based economy but what about now when we've changed the game and added complexities like outsourcing, deeply entrenched supply chains, and global operations all doing mostly knowledge-based work where the real building is done in far flung locations by 3rd parties?
This is the Knowledge Economy. A change as profound as the Industrial Revolution in eighteenth-century Britain. We're at a new juncture and yet we don't have the right instruments in place to manage, report, and analyze our businesses differently given this monumental change in global business strategy? Do we really look at the business with an up to date view or are we just doing what we're told. Frankly, I think the entire finance department should rethink the reports they're generating in partnership with their IT counterparts and ask what the viability of these reports really is. Love this one, "We do things this way because it's what we've always done." Imagine if that's how the Beatles or Elvis or even the Rolling Stones thought. Heck, forget them. Imagine if that's how David Bowie thought. He's masterminded the art of adaptation over the years. Cha-cha-cha-changes...In rock 'n roll or business survival tactic #1 is adapting quickly to the changing landscape. As conditions change, update your strategy and rethink the way you're running your business.
As Winston Churchill said, "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." This is your strategy. This strategy is never unbending or unwavering. A good strategy is adaptable with risk assessments forall sorts of business impacting events. As a result, the workforce needs to be setup to adapt as the strategy changes. This Strategy Execution Framework can help get people doing the right things as quickly and purposefully.
For more information on strategy execution frameworks, please visit this URL with some superior resources for you to access.
Exercise daily. Star in your own sitcom. Visit the Great Pyramids. Run a marathon. Go hand-gliding. Drive the Pacific Coast Highway. Climb K2. Attend the Winter Olympics...Shoot...Compete in the Winter Olympics!
Goals. They can be our rudder out in the high seas of life that give us purpose and direction.
For the ones that don’t ever get accomplished the reasons vary but for a lot of us the reason for the missed goal is as simple as, “life just gets in the way”. We get distracted with other tasks that seemed more pressing - and even more interesting.
One of the perennial goal making exercises we all go through is the New Year’s resolution...Do you even recall what your New Year’s resolution was this year??? Notice I said was and not is. That was intentional. :) So many things come up over time that these things just get buried until we finally forget them completely. Harmless usually. They're usually fun things we'd like to start or stop doing.
All well and good if these are personal goals but what about your work-related goals? Suddenly, it is much more important that they get accomplished. That’s for certain. Even more importantly, how are these work-related goals measured so you and others can track your progress? (Are they even measured?) Well, I’m sure they’re being measured and monitored in some capacity which may be fine for you as the individual employee but how good is that for the organization if the company has little or no visibility into what your measurements are and how these measurements role up to support achieving the top-line corporate goals?
In a time where companies and ‘the Street’ are so margin conscious in expecting more to be accomplished with less resources, purposeful action by the workforce has never been more important. Ensuring a productive workforce operating efficiently is critical to survive and succeed in today’s marketplace.
I've seen many organizations successfully and unsuccessfully deploy this Strategy Execution business practice. When done right, a Strategy Execution Framework can do many performance enhancing things to improve a company's bottom line. This Framework has a foundation built around using a collaboratively defined set of KPIs for each individual employee. In this framework, these KPIs as displayed in a scorecard tool are collectively 'networked' and aligned to the rest of the workforce’s scorecards which can all be aggregated together showing a direct causal tie to the company’s top-line goals.
Said differently, whatever the top-line strategy is, the contributing components, i.e. sales, marketing, services, finance, product development, etc. including the individuals within those contributing components, have a common framework in place to ensure the organization is marching along to the beat of the same drummer and not playing their own songs as they see fit. Without this framework the company loses valuable horsepower through reduced productivity because the workforce isn't aligned and fully accountable for meeting enterprise strategy-supporting targets. As a result, you’ll have employees doing what they think are the right things without any accountability and inherent strategy alignment. Worse, what happens as the enterprise strategy changes? How quickly is your organization able to realign itself to course-correct the direction of the ship so it’s headed towards the new target??? What are the consequences if your competitors are adjusting more quickly to these changes?
Well, hopefully the reasons for getting started on this initiative are clear. Still, it's surprising that there are not many companies responding to the need for greater accountability, sharper alignment, and more nimble adaptability of its most important resource, its workforce.
So, what are some tips for getting started with this initiative? Well, there are some clear must-haves when starting a project like this including getting C-level executive sponsorship. Without it, you'll fail. This initiative spans the entire enterprise and you'll need someone sponsoring it that has that kind of gravitas to make it happen when others don't want it to happen. Another critical gotta-have-it-in-place is that there needs to be an owner of the overall “Strategy Execution Framework” initiative. This individual needs to not only be a project leader but also needs the intellect to be able to translate what these KPIs are going to be as derived from the top-level strategy. This translation will be required rom the enterprise- to the individual contributor-level across all functions and roles and outline where the cross-functional alignment is for those 'shared' metrics where multiple functions and/or individuals are necessary to achieving the result. Please know that this is no small chore and, as a result, without this leadership in place companies will continue to struggle deploying an enterprise-wide Strategy Execution Framework. In my opinion, until companies start adopting this type of "management" and "measurement" methodology they will have workforce productivity struggles whereby their workforce will be end up loosely focused on the "right" things and, worse, as the enterprise strategy changes, they'll be slow to adjust...even more worse will be if it's slower than their competition. This Framework through the use of integrated scorecards provides executives, functional leaders, and managers visibility into the actual versus the targets to assess how the individual, the function, and the company is performing to better anticipate potential shortfalls while allowing for greater adaptability as these early warning signs appear.
Perhaps if we all implemented more personal scorecards for accomplishing our New Year’s resolutions we might have a higher success rate at that too but that's for another time.
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.
I often get asked about the importance of having your data in excellent shape - accurate, complete, relevant, etc - before you start using BI. The conventional wisdom, usually in IT, is that the data has to be right or the users will not trust it. Of course, that's true - to a point. The success of any reports, dashboards, scorecards or analytics often rests on the quality and trust people have in the data they see through that BI content. But the reality is that the data is never perfect. The "single version of the truth" (something I question as a goal but that's another day) is a journey that will never be reached 100%. So waiting until the data is completely trustworthy before rolling out BI is a folly that, in fact, will slow down the realization and need for data quality to be addressed where it needs to be addressed - in the business.
The truth is that data quality is often improved because of BI. While the first reaction might be to "blame the messenger" - the reports or tools that were used - the reality is that exposing data quality issues and discussing how to address them is essential to establishing the sense of ownership in the business and the subsequent need for governance programs that will continually improve the quality over time.
To be clear, we cannot build BI on top of truly bad data and expect that to be acceptable. Our data warehouses and data marts must meet a sufficient level of quality to make the use of that data valuable and meaningful. But don't let the quest for "the best" prevent us from starting our journey towards "the better".
Which means we need to move to both a information governance mandate and a BI governance (e.g. BICC) mandate that work in concert and alignment with each other. And that means that our information management strategy and our BI strategy have to be viewed together. Each depends on the other.
And yet too often companies are more focused on one or the other. Some companies start headlong into a BI strategy without any real consideration of the information management strategy that goes with it. The result is a truly failed BI initiative that will struggle to regain credibility. And there are probably just as many companies who invest a tremendous effort on data warehouse design and development, MDM, and data governance with little attention to how the business can effectively use all that data with BI.
So which comes first - the need for information governance and information strategy or the need for BI governance and BI strategy? Chicken or egg?
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