Say goodbye to BI and hello to proper financial reporting
Richard Sampson, SVP EMEA, insightsoftware discusses the huge disruption that BI implementations can often cause a finance team.
Richard Sampson, SVP EMEA, insightsoftware discusses the huge disruption that BI implementations can often cause a finance team.
Business Intelligence (BI) implementations are ubiquitous in today’s modern organisations. They help many departments tell the right story clearly through visualisation, making it easily understandable.
Despite their merits in other areas of business, this is not the case for the finance department. Financial reporting is much more specialised.
Frustratingly, finance teams learn the hard way if a BI implementation is thrust upon them. CFOs and their teams realise they are on a path of no return, which has them scurrying to find workarounds that ultimately, make things worse.
Financial reporting needs cannot be solved by a BI implementation, mainly because transactional drill-down and real-time data demands are not supported in any reports produced by BI tools.
Here’s why:
Often IT will invest in an expensive data warehouse to structure an organisation’s data in a way that is designed to get the most out of their BI tool.
Sounds good? Not for finance. It won’t solve the problem.
A data warehouse captures summarised data, breaking the link to the ERP’s underlying transactions. It means a finance team cannot drill down into the data to investigate, reconcile and solve integrity issues. Since the warehouse is only uploaded periodically, this creates a time lag. Without a real-time view of data, a finance team cannot operate properly at period-end. And this is simply unacceptable.
This challenge pushes finance down a more manual route to get the information they need. Often this involve dumping data from the ERP into a spreadsheet – a (ridiculously) time-intensive task, which is extremely error-prone. If we consider the large investment made in the BI tool, it makes this entire process more frustrating. What’s worse is that finance is having to work with static data that is no longer connected to the ERP. As soon as any minor amendments are made to journals, everything becomes out of date in the spreadsheet. The only thing you can do at this point is re-dump more data from the ERP into the spreadsheet, which starts the whole protracted cycle again.
Don’t fall foul of these mistakes. To close the financial reporting gap that the BI tools create, consider the following:
Finance teams need to understand these BI pitfalls early on to avoid them. It’s critical they don’t accept a generic BI implementation from their wider organisation. Recognising their very specialised reporting needs—and developing a reporting plan that meets these needs—will ensure the right business decisions are made based on the right data.
Richard Sampson is SVP of EMEA at financial reporting specialist, insightsoftware.