Top 5 Reporting Problems Faced by a CEO and Their Technology Solutions, Part 1

    This article discusses the top five problems facing CEOs today in regard to corporate performance management, zooming in on reporting. In interviewing a very successful CEO and founder of a large company, it was revealed that he had tried many market-leading dashboard and reporting tools in his career, and none of them had given him the complete decision-making platform he was looking for. He first expressed the corporate performance management (CPM) issues he faced, and all of them are echoed by hundreds of other executives I have spoken with in recent years. He then explained his vision of the ideal solution to his issues. In summary, these were the problems he faced:
    • Lacking one version of the truth when discussing performance.
    • Lack of accountability because management commentary was not tracked along with their reports.
    • “Analysis paralysis” – too many reports, too many versions, and too many reporting tools.
    • Lack of core exception reports that immediately are sent to managers when there is an issue.
    • Lack of agile, strategically focused, centrally controlled, top-down, bottom-up budget process.
    Let’s look at these issues one at a time and then discuss the ideal solution that the CEO was looking for to solve these problems: Issue 1: Information is spread across multiple transaction systems, and different reporting tools provide different answers. Locally designed reports don’t match numbers from the reports that the executives at corporate HQ are looking at. This leads to a lot of wasted time discussing which numbers are correct and how they are derived. When making decisions, managers need access to both financial and operational data, and they need it in one place with the same definition of key performance indicators (KPIs) and metrics so they have one version of the truth. Solution: Implement a central data warehouse that can house all key data required for reporting, analysis, and budgeting. This data warehouse should be able to combine data from the ERP system(s) as well as data from the organization’s other data sources, such as the customer relationship management (CRM) system, payroll system, etc.  One of the reasons that Microsoft Excel is still the world’s most popular report writer is that almost every transaction-based business software a company owns comes with one or more reporting technologies, many of them rather sub-par, as CPM – and business intelligence (BI) for that matter – is not the core business of most software vendors, making it almost impossible for a company to deliver a single, automated decision-support platform to its users. So, just like no house builder would build the different rooms (a.k.a. different reporting, budgeting and dashboard options) of a house first, and then later attempt to build the house foundation (a.k.a. the data warehouse), a company should plan for a data warehouse to contain all important data for the CPM or BI solution that will be implemented on top of it later. With the strong emergence of the cloud for various software-as-a-service offerings, an increasing number of organizations actually find it harder than before to provide a single CPM solution to their users because now their data is spread across databases located in-house as well as in the cloud, or databases are located in different clouds such as private clouds, Microsoft Azure and Amazon Web Services. Many such systems have their own application programming interfaces (APIs) for pulling out data to collect it in your data warehouse. So, now more than ever, the integration tool (ETL) itself becomes a critical part of any successful data warehouse. Of course, a well-built, easy-to-maintain data warehouse is just a means to an end. What should come next is to enable world-class decision-making for employees via a single, user-friendly BI web-portal where all key reports, dashboards and planning input forms are stored and easily accessed from anywhere at any time. This also helps ensure “one version of the truth” and vastly improves the quality of time spent analyzing and collaborating, and it speeds up decision-making while reducing confusion and potential conflicts. Issue 2: Managers’ explanations of the same budget variances and exceptions keep changing over time. This is hard to track due to the lack of a central “commentary repository” and linkage back to line items in reports. As a matter of fact, in most organizations, the managers’ comments on variances and exceptions are not recorded in the BI system at all, usually because many BI systems do not offer such capability, or the company does not have a formal process to do so. The result is a lack of accountability and lack of insight into managers’ history of comments related to such key data points. The problem gets even worse when a manager leaves the organization and the new person in the same position almost completely lacks reliable insight into explanations from the predecessor, often resulting in a period during which the new person does not take ownership of results or makes sub-par decisions due to lack of knowledge of past actions and events. Solution: Design an interactive reporting solution that encourages and enables accountability by allowing managers to enter comments by KPI or line item and that allows for reporting and analysis of these comments over time. The company should create a rule that, for example, all actual to budget variances of more than +/- 10% must be explained. Comments should be entered for all significant exceptions prior to scheduled meetings with corporate executives so that these can be studied in advance and the meeting can be focused on problem solving versus looking for information. Even better, the manager that writes the comment should also include his proposed action or solution as part of his explanation. The CPM platform should both allow for in-line comments directly on, for example, exception/KPI reports, and it should also allow for the attachment or linking to full documents, like a Word document or a PowerPoint presentation. This functionality allows more significant issues or opportunities to be discussed in much more detail than shorter, in-line comments entered into a database through a report. By integrating such documents into the BI platform, managers can easily and quickly access them when and where it is important as part of the analysis process, thus enabling faster, higher-quality decision-making. To be continued: next week, this blog will cover the remaining three common problems faced in reporting and analysis from an executive’s perspective. Solver enables world-class decisions with  BI360,  leading web-based CPM suite   made up of budgeting, reporting, dashboards, and data warehousing, delivered through a web portal. Solver offers BI360 through cloud and on-premise deployment and is reinventing CPM with its next generation solution. BI360 empowers business users with modern features including innovative use of Excel in the model design process. If you’re interested in learning more,  our team is excited to hear about your organizational needs and goals .