REPORTING INFORMATION TSUNAMI
Information complexity grows tremendously. During time business demand for new information exploded exponentially. What was before enough like Balance Sheet or Profit and Loss Statement on level of company, now deep inside information are needed like PL’s per sales channels, partners, customers, customer’s segmentation, functional units, products or services and etc. Not to mention number of non financial KPIs listed together with financial statements.
What was before basic “energy source” for company like coal, oil, steel, electric power and etc., today is information. Information is becoming core energy for business. Nobody can work without it. That’s why it is understandable then how employees create information tsunami. Everybody create beneficial information from their respective point within company. That means, over time, there is overwhelming loads of information generated across the company.
With company size, complexity of information usually raises significantly. Data complexity underestimates correlation between data and their multidimensional structure. For example one specific sold item is not more only one sold item but should contain, in big company or saturated market, also additional information (sales channel, customer segmentation, type of customer segmentation, technology etc.). Picture presents growth of reporting systems during time.
|Data complexity; nr. of KPI’s; IT & human resources engaged|
First, every small company uses table calculators and as it grows or business grows company needs to implement IT systems like ERP and CRM. Then company uses combination of reports from production systems like ERP and CRM with table calculator. With further growth it is harder and harder for company to stay only on reporting from production systems because production systems are not designed for reporting but for transactions, data gathering from many “places”. Their reporting system is simplified for quick and plain reports, the aim of reports is to give information to core processes not to give information for analysis. Reports start to slow down core functionality of production systems and that are transactions. Production systems are not designed and structured to support demanding reporting queries. That’s point where solutions like Data warehouse and Business Intelligence are being introduced.
DWH and BI solutions will help to access data very fast. Accessing data will be tremendously better and much more intuitive. But… data from DWH and BI are not something what company usually reports in financial statements. That usually stays in production systems like ERP and is a part of monthly reporting cycle.
At this point can be stated that DWH and standard BI solutions significantly speed up business but for finance and therefore management it is not adequate type of reporting. Many detailed financial information are missing to support financial and management perspective.
Not to be misunderstood, standard BI can produce financial statements but in manner of complexity and integration between financial figures in different reports and support of financial deep field view chapter 3.2.1, standard BI cannot adequately support emerging requests. In this context standard BI solutions are inadequate and are not appropriate support for finance and management. Demands of finance and management grew tremendously and they became a kind of standard to request detailed, advanced (planning, reporting, workflow and similar), complex and integrated financial statements. Therefore in further text authors will use standard BI solutions for business related world – for non financial data.
Next step is when company realizes that only solution like DWH and BI is only introduction for FCBI solution, specialized Business Intelligence solution for Finance and Controlling. In this level of reporting evolution company uses mixture of table calculators, reports from production systems, reports from DWH, BI and finally from FCBI. Nothing is thrown away from reporting perspective. Everything is used together as common reporting solution.
But, not even DWH, Data mining, BI, FCBI can help only limited to handle quantity, versatility and data complexity. There will be still open issues like:
Reports are still static, with very limited simulation capabilities
There is no real time interaction between reports
Management will still not see clearly behind figures
Authors disagree with current situation and “maximum reporting level” since it does not provide solution for information multidimensional flood as already analyzed. Authors therefore suggest tips, tricks and concept for next phase of reporting evolution that will be for sure standard in future.
New approach/concept is needed to handle all issues together in reports. More in our FREE Business Intelligence Report.