In today's competitive global economy, having the right information at the right time is crucial to an organization's ability to make the strategic, tactical and operational decisions that drive organizational goals forward. To better understand their business, organizations need intuitive query and reporting tools for advanced and consumer-level users to obtain access to critical business information that supports strategic and tactical decision making.

Business intelligence (BI) is fast becoming recognized as a strategic tool in business, especially in the legal, financial and government industries. According to an InformationWeek research BI survey of 300 business-technology professionals, the adoption of BI tools is fueled by compliance and regulatory requirements at two out of five of the businesses surveyed.1 Organizations that want to leverage reporting capabilities to help meet compliance measures and mitigate risk are learning that BI tools can help them achieve this faster and easier, but they are also learning that BI can help them gain a competitive advantage.

Government regulations such as the Sarbanes-Oxley Act, Basel II and the U.S.A. Patriot Act require publicly traded organizations to provide company information quickly and without error. The clearly outlined criminal and civil penalties for C-level executives and external auditors if financial information is not accurate and complete have made compliance a top issue for these companies.

Even without the threat of heavy fines and jail time, a number of private companies are becoming compliant because they recognize the value in unifying their data and presenting an accurate and consolidated view of their organization's financial situation.

In order to become compliant, organizations must be able to organize their data, store it, understand what they have and access it at any given time. An enterprise-wide BI system can help companies overcome hurdles related to gathering, analyzing, presenting and storing information.

BI is an enterprise-strength query and reporting application that helps users ask questions about corporate data and visualize the answers for more effective decision making. A strong BI tool utilizes data models (graphical representations of underlying database structures) and a powerful reporting environment to access and analyze enterprise data sources quickly and easily. With a BI tool, users can easily create ad hoc queries complete with qualifications and prompts for answers to individual business problems. The powerful reporting capabilities allow organizations to create meaningful and eye-catching reports containing data from multiple sources with great ease.

In a report from Gartner (formerly META Group) entitled "Sarbanes-Oxley: The Impact on Financial Reporting," it is recommended that organizations focus on the following financial-reporting criteria:

  • Collecting financial data,
  • Making financial details more accessible,
  • Drilling down on accounting reports,
  • Highlighting key analysis areas based on tolerance and financial metrics,
  • Segmenting reporting into significant elements,
  • Enabling workflow,
  • Offering frequent flash reporting, and
  • Instilling a financial management mindset within the organization.2

Although CFOs/auditors and IT administrators agree that the goal of compliance is to ensure the integrity of an organization's financial results, they look at compliance differently. The two groups have similar issues but very different perspectives when they begin to break down the aspects of compliance. CFOs and auditors see workflows and processes, and they focus on their side of the following compliance aspects:

  • Information: Financial information must be accurate, and fraud must be prevented.
  • Access: Only authorized personnel may have access to confidential information.
  • Procedures: Written procedures must be followed, and the correct authorizations must be obtained.
  • Change: Enterprise processes must change and grow with the market, process changes must have the necessary authorizations and these changes must be adopted by everyone throughout the company.
  • Auditing/Documentation: The correct set of reports must be generated to prove compliance, and the least amount of time must be spent to generate them.

Meanwhile, IT administrators focus on the following technological aspects of compliance:

  • System: There must be no internal or external tampering with corporate data sources or applications.
  • Access: Administrative control must be delivered to myriad administrators who need a particular software stack resident on a server.
  • Procedures: Compliance must be incorporated into everyday IT tasks, and best practices must be followed.
  • Change: Change requests must be matched with what actually happened in the infrastructure, ad hoc changes need to be accounted and controlled, and control must be secured while maintaining speed and flexibility.
  • Auditing/Documentation: Reports must be generated to prove compliance, and the least amount of time should be spent generating these reports.

BI offers solutions to both sides. Incorporating BI into an organization allows these two groups, who have spoken different languages for so long, to finally understand each other.
However, some organizations are still skeptical about compliance tools. A few businesses are even willing to continue with manual documentation and reporting in spite of the lost productivity, while others are waiting to see exactly what enforcement the federal government will deal out before implementing a serious solution. Process and workflow mapping and documentation as part of the road to compliance must be done eventually, and company processes and procedures will change. Documents that were so carefully prepared by hand last year will become obsolete. Avoiding compliance is impossible, and not taking advantage of automated compliance is foolhardy. Why not take this opportunity to implement ways to automate the entire system and improve the overall business environment at the same time?

BI in the Legal Industry

In the legal world, being able to audit and better understand financial, billing and work product systems is a critical aspect of reporting. BI offers the legal industry the ability to easily and rapidly report on virtually any desired metric. Whether it is an unbillable hours report, a practice area or attorney performance report, a client or matter business analysis or a day's outstanding or receivables report, BI enables law firms to generate easy-to-understand reports in a variety of formats.

To increase their competitiveness, comply with regulatory measures, increase accountability and reduce costs, law firms must make more informed, strategic decisions based on complete and accurate information. This means that they need to leverage all content dispersed across the organization, including data and information stored in structured databases and applications or unstructured information stored in e-mail, enterprise content management and knowledge management systems.

Many law firms are implementing BI tools as an integral part of their business strategies. Employees are empowered with accurate and timely information to make informed decisions and drive organizational goals.

BI within the Financial Industry

Within the financial industry, a competent BI tool is vital to compliance because not only do both Basel II and Sarbanes-Oxley require banks to have financial information at their fingertips, but banks are required to have a greater understanding of their data. This helps protect an organization. For example, when making efforts to comply with Sarbanes-Oxley, BI prevents the use of any loopholes or the misrepresentation of data before a CEO can attest to the financial data and sign off on it as correct.

The Treasury Department's Office of Foreign Assets Control (OFAC) has updated the Bank Secrecy Act/Anti-Money Laundering Examination Manual to include examination procedures to determine compliance with the regulatory scheme enforced by OFAC. While its rules do not require financial institutions to adopt a compliance program, the manual suggests that such a program is part of sound banking practice. Developing internal procedures and controls, identifying high-risk areas and transactions, and creating employee training programs are among its suggested features.

Banks are faced with increasingly stiff compliance issues, and some have moved away from open platforms such as e-mail for communicating with customers in order to protect themselves during an audit. However, advanced BI tools and consolidated data sources allow the analysis and reporting processes to be conducted more efficiently and effectively with fewer flaws.

BI Tools in Government

Government, with all its different departments, locations and responsibilities, is possibly the most siloed of all organizations. Individual departments begin to work in their own areas with their own systems, and soon little fiefdoms are set up throughout the enterprise. BI brings all of the information together, interprets it according to set queries and offers a complete account of what is really happening throughout the entire enterprise. From this, accurate information can be pulled, reviewed and interpreted, and informed decisions can be made.

BI also reduces training time by providing a simplified graphical interpretation of the entire database. This is especially helpful in government as it enables users to ask for specific pieces of information without needing to understand the complexity of the underlying database and offers a single, all-in-one view of a query that simplifies the creation and editing of queries.

Achieving Compliance and More with BI

As government, legal and financial industries utilize BI to help ensure compliance measures and mitigate risk, they can also unleash the competitive edge they need to succeed in today's business climate. Used as a strategic tool, BI can achieve compliance as well as unlock vast amounts of business knowledge that is currently disconnected data sitting in various silos of an organization. Collected and interpreted, this information can be used to further an organization's growth.

Forward-thinking, strategic organizations look for the following items in a BI tool:

  • Access to all data throughout the entire enterprise;
  • An easy-to-use portal interface that allows managers and executives to track key performance indicators that measure the financial health of the organization at any given moment;
  • Powerful but easy data analysis;
  • Ad hoc reports that help managers discover and quickly communicate changes in the business;
  • The ability to save reports as Excel files, which is a familiar tool for financial professionals and will prevent data entry errors;
  • The capacity to view real-time posted transactions, enabling analysts to quickly and easily research problem areas in detail;
  • A built-in audit trail that gives an in-depth view of finances at any moment;
  • Role-based security to ensure the proper flow of information inside and outside the organization;
  • The ability to report and consolidate data within 48 hours of material events that could affect a company's financial performance;
  • A shared view of information to facilitate collaboration around analysts, financial professionals and high-level corporate executives;
  • The ability to deliver information to any party and in any electronic or print format; and
  • Auditable report management that enables financial professionals to prove compliance if questioned.

Because compliance regulations are government enforced, auditing and reporting must become part of enterprise culture eventually, but it is their saving grace that they require companies to do things that they should be doing anyway. The silver lining to this cloud is the fact that other significant bonuses can be reaped if BI is used strategically.

  1. Weiss, Peter. "Employee Ability Shapes Business Intelligence." InformationWeek. 8 August 2005.
  2. Van Decker, John. "Sarbanes-Oxley: The Impact on Financial Reporting." Gartner Research (formerly META Group). 13 March 2002.

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