How to unleash Finance’s strategic talent
One of the aspects that often prevents Finance from delivering such insights is the lack of necessary IT infrastructure. Having the data is one thing, but analyzing it – looking for new opportunities – and translating it into useful business insights is another. Finance often finds itself hampered by rigid IT systems. This complexity is exactly the opposite of what the business is asking for: convenience, i.e. easy access to data and insights.
One size does not fit allTraditional on-premise IT architectures are based on the duplication of data – coming from various systems – in a data warehouse for reporting purposes. In today’s complex and rapidly evolving business context, however, business users want to do their operational, financial and management reporting on the fly. Traditional business intelligence (BI) tools and data warehouse technology do not meet these real-time reporting requirements. In order to implement the right set of tools – ones that adequately fulfil all the business reporting needs – companies should start by making a clear distinction between operational reporting, financial reporting, management reporting and performance reporting.
Most companies have their operational and financial reporting pretty well covered. Reports about the number of outstanding orders and invoices or accounting reports are widespread, meeting the more basic reporting needs and supporting the everyday business activities. Management reporting and performance reporting, on the other hand, are often are less well developed. These reporting tools support strategic development and allow companies to perform business simulations so that they can explore their future.
It all starts with a vision
To be able to run relevant strategic scenarios for the business, performance management tools need to be fueled with insights that come from – amongst other sources – cost-to-serve data and profitability-related data, from both Sales and Operations. This is valuable data about customers, channels and products that should not be locked away in data warehouses but instead is worthy of real-time processing. I’m not saying that data warehouses are no longer of value, but companies need to develop a clear vision of how they should deliver insights to the business and which tools – whether data warehouses, financial systems or self-service BI tools – optimally support which reporting needs.
Author: Thierry Bruyneel. You can connect with Thierry on LinkedIn.