Whether it’s using the wrong tools or “solutions” that solve nothing, we’ve heard some horror stories of financial reporting systems getting out of control. Some themes crop up repeatedly. If the following four common mistakes sound familiar, it might be time to re-assess your company’s business intelligence (BI).
1. Relying on Excel… For everything
We have written before on the perils of Excel, because the dangers of relying on the popular spreadsheet program for financial reporting warrant their own post. While brilliant for some tasks, Excel is a poor alternative for financial reporting. Read our previous post here.
2. Locking in to a rigid solution
Many organisations find their financial reporting systems simply aren’t capable of expanding with them. In some ways, these companies are at a similar disadvantage to those still fumbling along with Excel, because they’re now tied to a much more expensive, yet completely inflexible system.
Often this happens when a company builds ad hoc processes as new divisions are created (or businesses are acquired). This quickly becomes a complex web of systems that is unsustainable in the long run. Understanding and untangling the myriad of systems becomes an expensive, time-consuming exercise.
Alternatively, we’ve also seen companies tie themselves to one solution they think will grow with them, but it doesn’t. Most often this happens when they invest in a rules-based reporting system. Inevitably, the rules change as the business grows, and the system isn’t flexible enough to adapt to an expanding organisational structure.
If you run a highly structured business that never changes, perhaps using rules based BI can be excused. But most businesses today do change. The business environment is fast moving and businesses must change to survive. Allowing for this change is is why master data management and data driven BI is so important.
3. Jumping in without analysing all parts of the business
On a related note is the organisation that fails to analyse the reporting requirements of all parts of their business. A committee might make a decision in isolation, based solely on the areas of the business they are familiar with. A myopic approach to solving a single problem fails to cater for the needs of the business as a whole.
Sometimes it takes an independent third party to examine the whole organisation with fresh eyes to create a holistic approach to the solution. Creating a single version of the truth – a central data warehouse – is essential for getting the best long-term returns from BI.
4. Too many tools
Another common pitfall for large organisations is multiple non-compatible BI tools. The procurement or sales areas favour one tool, whereas the finance departments prefer another. The end result is that divisional managers receive their data from different sources at different times in different formats.
This may happen when one part of the business is ready to implement a BI tool, but other areas are not. They forge ahead – doing their own thing until eventually the organisation is left with silos of information that don’t connect or reconcile.
While this might work in some cases, most organisations require a holistic approach, with a single data source and a single data-driven BI system.
Avoiding your own horror story
ITeM Group was able to help all these businesses by providing a holistic approach to financial reporting and BI that was tailored to the business and had the capability to grow and adapt with the company.
But not all clients come to us with horror stories. Some come to us well before their reporting systems become too complex. That way, we can set them up with a data-driven approach to their business intelligence systems, designed for their business, their data, their needs. (For more information see our free e-book: The nine key considerations when selecting a business intelligence solution for financial reporting (PDF).
It’s the CFOs of those businesses who enjoy seeing a high ROI quickly and clearly thanks to comprehensive, end-user-focused solutions for complex businesses.