Guest post from Pat Calitri, Business Unit Executive, Financial Close Management, IBM Business Analytics
Part 2 – Today’s Reporting Landscape & What Makes a Top Performer
Disclosure Management is now firmly established as an essential step in the financial close process but few organizations have learned to tap into its true potential on an enterprise scale. In this blog series, we interviewed Sherri Liao who leads The Hackett Group’s Enterprise Performance Management Advisory program.
We discuss the internal and external reporting challenges faced by finance organizations and the types of technologies and solutions organizations can employ to overcome these hurdles. We also explore what “top performers” are doing differently to leverage their information assets to drive better decision making.
To read part 1 of this series, click here.
Pat Calitri: How are the majority of reporting and analysis presentations executed in a typical organization? What types of controls are typically put in place to address user security and information integrity during the reporting preparation process?
Sherri Liao: Reporting and analysis in today’s environment largely revolves around three key things: timeliness, integrity and agility. Typical management “asks” in this area include: How soon can you get me this ad hoc report? Were you able to tie back to the ‘right’ numbers across source systems? Can I see this report cut by a different attribute – across customers rather than channel?
As a result of this balancing act, combined with supporting reporting systems that have often not been updated to reflect current organization changes within their data structures, manual processes invariably grow to cover-off on exceptions and translate into desired custom reporting formats (e.g., Excel, Powerpoint, Word, PDF, etc.). Reporting tool add-ons for various performance management systems have been adopted by leading organizations to drive and manage standard report generation. However, ad hoc reporting needs often override these tools and create webs of manual processes to manage.
To address process controls and security to support “one source of truth,” organizations often end up limiting standard and ad hoc report generation to dedicated subject matter experts that have sole access to secured data sets. The trade-off here is often one on timeliness and agility due to limitations in resources and manual data gathering efforts.
Pat Calitri: Given the daily challenges Finance faces to balance data gathering workloads with required reporting and analysis, what products or tools are available today to address these issues?
Sherri Liao: Available reporting tools up until recently relied heavily on drawing from central data repositories that had been blessed as the “one source of truth.” Design and implementation for these supporting structures and tools have often been costly to take on for organizations that rely heavily on real-time data or leverage large volumes of data at different levels of detail to make critical business decisions. XBRL tagging tools that are used to deliver financial reporting have enhanced the tagging and external reporting / filing process, but have only had limited impacts for internal management reporting. These tools have most often been viewed as compliance based reporting tools that offer little value to the broader organization.
However, recent second generation disclosure management products have been redesigned with the intention to have benefits for the broader organization in mind. These tool sets have been purpose built to scale and support management reporting through secure tagging of information assets across multiple data sets – enabling an organization to create a single, secure platform to integrate management reporting with various dimensions of business intelligence data. This tagging concept, taken to the next level, has the ability to facilitate collaboration across multiple parties and data sources, as well as arm reporting users with access to near real-time data when needed.
Pat Calitri: How does driving at “one source of truth” and improved performance management capabilities influence the bottom line in organizations?
Sherri Liao: Hackett’s recent performance study on EPM Top Performance was conducted to better understand how better enterprise performance management (EPM) and decision support translates to financial outperformance. Financial outperformance was defined in the study as at least 25 percent better EBITDA margin than industry average, and underperformance as at least 25 percent worse.
64 percent of EPM Top Performers outperformed their industry average EBITDA. Optimizing decision support processes by leveraging proven best practices continues to be the key to building a strong EPM competency. This includes superior process capabilities due to standardization and integration across planning and reporting; better leverage of technology through automation and electronic delivery of information; and, improved quality and management of information.
Pat Calitri: What are the differences between laggards and leaders when it comes to finance transformation (integration, automation, process optimization) initiatives?
Sherri Liao: According to Hackett’s recent performance study on EPM Top Performance, Top Performers have notably undertaken substantially more EPM transformation over the two years when compared to their peers, in particular in the area of aligning KPIs and EPM process integration.
For more information:
**Learn about IBM’s newest version of Cognos Disclosure Management at IBM’s upcoming Business Analytics Virtual Launch (Tuesday, June 11)
**Read the whitepaper, “The Time is Ripe for Enterprise Disclosure Management” and learn how to support disclosure management for departments and functions well beyond finance.
**Register to receive IBM’s newsletter: “Finance and Beyond”