From raw data to insightful information– A road not so well travelled
Business leaders want access to facts and figures at a moment’s notice and the onus often falls on Finance to deliver much of this information. However, good financial executives know that transational data is simply not enough to satisfy the appetite for information from their bosses, peers and trading partners.
There are two distinct steps in developing a sound reporting strategy
- The process of accessing relevant data in a timely and efficient manner
- The development and dissemination of accurate, useful and timely information
This article discusses how cloud integration can help achieve point # 1, data access. It will be followed in the near future by a second article to address point #2, developing a fully functioning reporting and analytic environment.
So why is it so difficult to access data?
One of the major challenges in any kind of organization is that data can be disparate and is often scattered in different places. Data can reside in an ERP, a legacy system, emails, Excel, Word, etc. It can also be in the form of text, numbers, images, etc. In fact, up to 80% of data used in management reporting is ultimately being assembled through a combination of manual keying and a series of intricate data extractions and downloads which end up in a jungle of spread-sheets. Adding to this complexity, relevant and important data does not always come from financial or operational records. They may in fact come from third parties or may be generated by some orphan and/or obscure “organism” incongruent with all other company systems.
An effective Data Access strategy can help enterprises:
- Reduce costs in data entry and therefore FTEs
- Achieve report visibility – faster
- Avoid the undue risk of relying on very few super-users to extract data and convert it into meaningful information.
Cloud data integration is a simple, fast and affordable way to capture and store data that is tucked away in different places and systems. Once accessed, data is retrieved, stored safely and made readily available anytime, anywhere – usually through an online portal. Records are continuously updated through the on-going flow of information from the various internal and external data sources. Such records become authoritative in that it represents unique data updated at a point in time thus avoiding timing differences and different versions of the truth.
The benefits of capturing data and storing it in the cloud include:
- Users can access data on-line from anywhere, anytime and through any device (subject to strong security authentications)
- Everyone uses the same data – no confusion – tight version control
- Available data can be analysed by users and super-users using whatever tools they are comfortable with, from Excel and Power Pivot to self-service analytics and visualization tools such as Tableau and Qlikview
- Only specific and relevant data is retrieved, avoiding redundancies
- Data can be cleansed and prepped to remove inherent inaccuracies
- Significantly reduces manual work and improves response time
- Little involvement from IT resources, which are always in short supply
- An affordable pay as you go model that democratizes access to data and permits small to midsize companies to operate on an even footing with the capabilities of larger firms
A simple example
Company XYZ is a mid-market retailer with $100m in sales. It does not currently have reliable vendor profitability metrics. Various areas in Finance, Merchandise and Supply Chain produce their own reports with disjointed, inconsistent and irregular information.
The business has asked the Finance Department to produce a report showing vendor margins and key service levels. They want to be able to compare vendors to each other and to company and industry benchmarks. They want an all-encompassing report in order to rationalize procurement and achieve better volumes and better margins.
In order to produce such report, the Financial Reporting group determined that vendor data will be needed and that this data is residing in different areas as per the chart below.
|Gross Margin||General Ledger|
|Returns||Warehouse Management System|
|Freight Costs||Transportation System or Excel|
|Fill rates||Warehouse Management System|
|On time delivery||Warehouse Management System|
|Compliance charges||Warehouse Management System|
|Industry Benchmarks||Excel or external data sources|
A Cloud data integration strategy has been identified as a way to access this data, extract it and hosted in the cloud where it will be available to authorized personnel for reporting purposes. To do so, data sources have been identified and a space has been carved in the cloud to store this data into a data mart or, if necessary, a data warehouse. Ultimately, the goal with any integrated information system, whether it be a data mart or a data warehouse–is to provide consistent, accurate data about the organization to the users.
And so, data extracted from the GL, WMS, Excel, and other external sources is transformed and loaded into common formats that integrate, match and index the information for the use in the report that management is asking for. Such use of data marts or data warehouses with a standard infrastructure can offer unsurpassed business analysis and management capabilities.
The end objective:
Put the data into the hands of the people who are responsible for the achievement of business objectives and strategies