Every decent sized organization deals with management reporting as CXOs and the board expect to receive regular updates on the organization’s performance. Depending on the size of the organization, you could have one or more financial analysts toiling away in putting together the required corporate reports. In most cases this is a time-consuming exercise, leaving little time for analysing the data and taking prompt action. This doesn’t have to be the case though.
Here are 3 ways for you to energize your corporate reporting process:
1.Efficient information architecture design
There is sometimes a less than optimum understanding of what constitutes good information architecture for an organization. Most organizations feel that a good ERP will take care of managing operations as well as reporting. This is obviously untrue. Most CFOs think this due to the fact that they are not able to derive the most from the power of their ERP. An ERP, in itself, is only a piece of the system architecture jigsaw. An organization’s suite of software solutions should include CRM, ERP, BI & EPM (Enterprise Performance Management). Even amongst those organizations that have adopted the right suite, there is often misalignment or sub-optimum implementation and thereby a poor realization of its benefits. Over dependence on Excel for corporate reporting is a typical sign of a poor implementation of the EPM solution, if at all. Using a BI solution for financial consolidation is another example of a poor information architecture design.
2.Decentralize the responsibilities
It has been often observed that the central management office also assumes the centralized role of reporting, and thereby runs the risk of building a version of truth that may be different than how the individual operating entities see it. If you observe frequent debates on what the ‘real numbers’ are, it may be quite likely that you are suffering from the same fate. You may want to bring in a healthy & efficient mix of de-centralization and centralization of responsibilities
3.Strong knowledge management architecture
Good corporate reporting requires competence. The nuances of financial numbers and the insights they deliver need a good understanding of the subject matter. Operational entities may often not deliver high quality data due to their lack of understanding of the expectations from the management office and their own lack of subject matter expertise. To fix this, the organization has to build a high quality knowledge management architecture where there is constant dissemination of information & training and thereby bringing everyone on the same page in terms of skill-set and quality expectations.
Evaluate your corporate reporting process along these 3 aspects and energize your corporate reporting process.