- A CFO receives his monthly corporate report package right on schedule. Unfortunately, “right on schedule” means the 18th business day of the month.
- A financial reporting manager prints out 10,000 pages of corporate reports for dissemination throughout the organization, only to have to collate them manually before sticking them into envelopes.
- After a substantial investment in a Web-enabled reporting application, a CEO is shown a screen filled with hundreds of data elements bound into grids. Not only does it lack formatting, the new reporting application cannot replicate the basic layout of his previous financial statements.
Horror stories from the 1980s? Hardly. Corporate reporting today not only faces the same challenges of years gone by, but the demands have grown and expectations are often not realized. There are fundamental requirements of a solid reporting system that must be included in any evaluation decision. The essential components of a reporting system include content, presentation, timeliness, analysis and access.
Content
The content of a corporate report enables the end user to digest data elements from disparate source systems that together should provide a clear picture of the company’s ability to execute its strategy. The quality of a corporate report is judged by its ability to convey meaningful information so that the end user can draw rational inferences. If the content is so limited that the end user is only able to view discrete data elements without seeing those data elements in context, then the value of the content is dubious. Likewise, if the content of the report fails to combine both financial and nonfinancial data it is quite likely that the end user may be misled by the corporate report.
While we often think of the content of a corporate report as simply being data elements that are retrieved from a specific data source, there are several issues that make generating the report content difficult if not impossible. Many report writers that are touted as corporate reporting solutions were originally created to produce simple sort and total reports that provide little more than a listing of items. While these are adequate for transaction systems and simple marketing queries, they fall far short of being able to produce complex corporate reports from multiple data sources. In a similar vein, many report writers were developed based on a specific data schema and subsequently ported to different databases. As a result, some report writers have inherent limitations that preclude specific report layouts that are critical to providing content that is easily digestible by the end users.
A key consideration in evaluating a corporate reporting solution should be the ability to replicate a wide variety of corporate reports with content from more than a single data source. If you cannot create reports that provide you the ability to see the data in context and in a layout that aids your understanding of the data, then the corporate reporting solution has failed.
Presentation
What is the basis for our obsession with making reports look attractive? Are we still hoping to get the gold star from the teacher? Perhaps, but there are rational and important reasons for providing reports that are correctly formatted. Our ability and the ability of our end users to digest the data presented in a corporate report can be heavily influenced by the presentation quality of the report.
Corporate reports that are nothing more than a grid of unformatted data are extremely difficult to read and interpret. Living in the age of sound bites and MTV, our attention span on any one report is fleeting at best. If through formatting we are able to help the end user focus their attention on relevant blocks of related data and call their attention to specific data elements, we have done our job well.
Corporate reporting solutions must provide the ability to insert rows and columns, format individual cells and data elements and follow specific formatting conventions for different types of reports. Conditional formatting that directs (alerts) the end-user’s attention to a data element if it meets a certain threshold can be extremely valuable as well. Corporate reports that combine graphical representations with tables of data also assist the end user in assimilating the data.
Timeliness
A corporate report that provides the correct content and is formatted perfectly but arrives late is worthless. Corporate reporting is not used just for performance measurement but for performance management. The purpose of producing corporate reports is not for doing a post mortem but for enabling the end user to make timely decisions based on relevant data.
Unfortunately some corporate reporting solutions require a tedious month-to- month maintenance process that can substantially delay the production of reports. Many corporate reports are time centric in that column headings are based on discrete periods of data. Unfortunately, some reporting solutions require that each field in a report column definition be manually updated each and every month.
In a similar vein, some reporting solutions are based solely on hard-coded row and column definitions. Should the relationship between certain elements and subtotals change, then these reports require that someone manually update the definitions in each and every report that contain the relationship. As an example, if a report displays the states that reside within a region and the company reorganizes the regions by reassigning states, does the corporate reporting solution require manual maintenance? Ongoing maintenance of reports is a huge hidden cost that many fail to recognize in the purchase of a reporting solution. Not only is their a human cost in maintaining the reports, but an even greater cost in not being able to provide timely reports.
Analysis
It is highly unlikely that anyone who spends the time to review a set of corporate reports will walk away with a full understanding of the data. Hopefully they will take the time to review the data and something will spark their curiosity. At that point, where do they turn to resolve their question? Do they call an assistant, call someone in finance, call someone in accounting or do they answer the question themselves by performing the research without the assistance of anyone else in the organization. If the corporate reporting solution is an effective one, then the end user will have the tools available to answer the majority of their own questions without assistance.
