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Business Intelligence: Exploring and exploiting key financial data

Business Intelligence: Exploring and exploiting key financial data
DetailsPublished on Tuesday, 13 August 2013 10:41 Written by David Stokes, Head of Product, PrecisionPoint
business intelligence

The value of deploying an incremental approach to business intelligence (BI) deployment to unlock this invaluable corporate resource.

With the perceived escalating security threat, IT departments are becoming ever more rigorous about imposing control over data access.

Indeed, many Service Level Agreements are now based on restricting the way key financial information is made available to staff, from the Financial Director to operations.

Yet this approach, whilst understandable, is compromising business performance. Financial data is a corporate resource that should be explored and exploited to deliver commercial value. Rather than constraining access to the raw data, IT should be ascertaining how best to exploit business intelligence tools to turn that data into essential business insight.

David Stokes, Head of Product, PrecisionPoint, outlines the value of an incremental approach to business intelligence (BI) deployment to unlock this invaluable corporate resource.

Corporate Resource

Organisations are increasingly data sensitive. But just how valuable is one company’s financial data to the nearest competitor? In its raw form, it arguably has little value: in reality, it would take a competitor months to unravel the complexities of business specific financial reporting, even with full untrammelled access to the ERP, by which time the business has moved on. In contrast, access to the company’s email system, white papers and presentations, could easily provide immediate insight into both performance and strategic direction. So why the constraints?

Why is it so hard for even a company’s own staff to gain access to interpreted, analysed and insightful business information? Properly extracted and analysed to create a robust information resource, this data is far more valuable to the business – from FD to the Board and operations. Rather than operating as data gatekeepers, how can IT help to unlock the value of this essential source of business insight?

Protection versus Restriction

Typically a vast number of issues arise within the IT department when tasked with sponsoring the business intelligence installation – not least the fact that Service Level Agreements, especially within an outsourced environment, are based upon restricting access to ERP and Financials data. In many cases, the data is not allowed off site and users need special authorisation to gain access.

Furthermore, there is often a lack of focus on business requirements and the importance of providing quick and easy access to essential financial and performance information. As a result, the business continues to operate without the information and data that would provide the insight to drive revenue and control costs. Indeed, it is ironic that some of the financial compliance requirements, such as Sarbanes Oxley, actually constrain deep insight into an organisation’s accounts, hence preventing the company from spotting dodgy creative accounting or pure fraud.

Reporting Model

To truly realise the value of financial data it is important to reconsider both how that data is presented – typically in some form of prepared report – and how the reports are made available to the people that consume them. If reporting is considered as a pyramid, the traditional ERP or Financials type reports make up the base: they provide a mass of listed information, but no opportunity to attain any further detail or insight. With business intelligence (BI) reports, in contrast, users start at the top of the pyramid with a consolidated figure and then interactively drill down into more and more detail as required. Taking this approach, rather than only seeing basic sales figures, sales can be analysed by customer, region, category or product, for example.

However, this subtle change of approach means that defining business requirements can be difficult. Traditionally, the IT department thinks in terms of reporting needs rather than the essential business questions the reports need to answer. It sounds counter-intuitive not to define all the requirements up front but in the world of BI, this approach leads to many projects failing because the users don’t know what is possible or what they’re looking for and the IT team struggle to understand the key business questions.

Bite by Bite

Taking incremental steps and prioritising the key areas of business pain can transform the success of and attitudes to BI development. Whether it is a need to improve merchandising understanding or report sales across countries in one common currency, by focusing on the essential requirements up front, the business gains not only essential information but also confidence in the BI tool and process – and a growing willingness to commit to further development.

This approach also enables the reporting programme to reflect the needs of many different individuals across the business. From the Financial Controller or Financial Director operating almost wholly in Excel to the Board demanding an emailed dashboard and report pack and the operations function requiring rapid access to pre-built reports via the intranet. With a base system in place, it’s very easy to prototype a solution that reflects the needs and permission levels of each user group, enabling rapid expansion of business insight across the organisation.

The BI providers are arguably more responsible for the shelf-ware than any other IT vendors. They have over sold and over hyped; but continued sales are a clear indication of the huge demand for business insight. Organisations want to understand business trends and to identify opportunities for reducing costs or improving performance.

The problem is not solely one of technology oversell. It is one of perception. IT is tasked with protecting this essential corporate resource; while the success of traditional development projects depends upon a detailed and complete specification up front. Business Intelligence and reporting, however, requires a different approach and a different mind-set. IT needs to be able to open up access to the information without fear of missing an SLA; and it needs to understand the value of bite-size development that truly reflects the business priority. Critically, taking this approach, an organisation can truly unlock the value of its financial and ERP data without compromising integrity or competitive position.

As the saying goes, “how do you eat an elephant? One mouthful at a time.”