best practice business reporting

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1 best practice business reporting This white paper outlines strategies and tactics for optimising your business reporting to assist you to increase your business performance. It covers the following areas: Four fundamentals of best practice business reporting; What is important to measure How to empower your people Catering for individual reporting needs Enabling technology to assist you Improving your business reporting a white paper paublication from enabling

2 welcome Best Practice Business Reporting 1 Common pains and issues experienced 1 Common gains and opportunity areas 1 Four fundamentals of Best Practice Business Reporting 2 1 Measure what s important 2 2 Empower the people 3 3 Cater for the needs of the individual 4 4 Enabling technologies 5 Steps to improve reporting in your business 7 Summary 8 Enabling is proud to sponsor this booklet and we hope readers gain key insights into our suggestions and views on improving your productivity. references Microsoft Corporation J.Carlton Collins; Bedrock of Business Success: Sound Financial Reporting, mbscommunity_financial_reporting.mspx Barents Group; Report Writing at Barents Group, (1997). PWC Insights into Corporate Reporting, Wikipedia: practice authors & contributors Enabling Team Members: Enabliser Ken Enabliser Gary Enabliser Andrew Enabliser Kim Associates: Sue Stubenvoll Creative Logic Ltd For additional copies of this booklet or for more information regarding Financial Management, Enterprise Resource planning (ERP), Customer Relationship Management (CRM) and Business Intelligence solutions, please contact your local Enabling office. Australia 1800 ENABLING ( ) New Zealand 0800 ENABLING ( ) or visit our website at and discover how we enable better business for you. PROPRIETARY INFORMATION AND CONFIDENTIALITY The information contained in this document represents the current view of Enabling on the topics discussed as of the date of publication. This document is for information purposes only. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form, by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Enabling Pty Ltd. Enabling may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Any product names herein are acknowledged as the copyright of their copyright owners. The example companies, organisations, products, people, and events depicted herein are fictitious. No association with any real company, organisation, product, person, or event is intended or should be inferred. Enabling Pty Ltd. All rights reserved. a white paper paublication from enabling

3 best practice business reporting If you can measure it, you can manage it. It s all very well measuring things in the business, but this data needs to get out into the light, which usually means reports, in whatever medium and format make most sense. Reports are an essential method of getting business information to the people who need to make decisions for the business. It s this business information that will indicate whether a decision and/or action is required or not, whether something is going wrong or not and the timing of the decision. This principle applies whether the information is financial, legal and operational, a workflow trigger to-do, or a text message alert. While many reports are historic, others, such as budgets, forecasts and activity plans are forward looking, and can enable proactive rather than reactive decision making. Each individual business is unique and its reporting requirements differ. The objective of this document is not to provide a silver bullet, but to be a catalyst to drive your thinking and introduce fresh ideas and practical implementation steps that will enable you to improve the reporting and information availability in your organisation. common pains and issues experienced: Overreliance on key personnel and a lack of succession plans within the business e.g. ask Bob, he will know Lack of accurate and timely key operational information available, resulting in guesswork and poor decision making e.g. I don t have accurate sales forecast volumes, so let s order this extra inventory just in case common gains and opportunity areas: Reduce costs and improve productivity across business units, operations, or product lines Key business information available, resulting in better decision making Information systems support enhanced delegation of tasks, accountability and performance monitoring Less reliance on key individuals and team members within the business Improved customer service and loyalty through better customer insight Gain visibility into risk positions and early warning indicators for risk exposures More robust, integrated and secure information and reporting systems supporting the business Leverage existing data investments to gain real-time visibility into business processes Better financial performance Key operational data not collected or available for reporting Disparate and non integrated systems Time consuming and inefficient report preparation processes Key and important business information not secured and controlled e.g. customer and price lists on mobile devices Overreliance on spreadsheets as reporting tools Businesses and productivity monitored using intuition, not operational metrics, and against targeted financial outcomes. BEST PRACTICE BUSINESS REPORTING PAGE 1

4 four fundamentals of best practice business reporting measure what s important kpi s Key Performance Indicators (KPI s) are financial and non-financial metrics used to help an organisation define and measure progress toward organisational goals. A business needs to be very clear about its goals, what factors or influences are important and how they affect the business. The business needs to decide what indicators (key performance indicators, or KPI s) to monitor. This allows the business to gauge whether it is achieving its goals and how well it is performing, both internally and externally. Asking hard questions about why things are done and whether they support business goals will help. Key Performance Indicators (KPI s) are financial and nonfinancial metrics used to help an organisation define and measure progress toward organisational goals. KPI s are derived from the company s strategy and may be broken down into many subsidiary KPI s according to the business or functional structure and the level of decision required. To be useful, reports need to clearly support one or more KPI and if they don t then either the KPI s or the reports relevance need to be questioned. Similarly, a KPI without any reports should raise suspicion. A KPI will usually reveal conditions or performance that is outside the norm, signalling a need for managerial intervention. A KPI can be quantitative or qualitative, objective or subjective. Preferably KPI s should be quantitative, unambiguous, and reliable. Astute businesses take a holistic approach to reporting. They consider reporting in its entirety and develop a reporting framework on a basket of measures. They approach reporting proactively i.e. We understand our business and what drives successful outcomes. We measure and manage these drivers. Operational reports will inevitably have more detail, while remaining aligned with the main reporting strategy and KPIs. n BEST PRACTICE BUSINESS REPORTING PAGE 2

5 empower the people Even in the most tightly controlled and centralised business model, information needs to be distributed and acted upon. Employing and retaining good people is a common and accelerating business problem. It therefore makes good sense to implement information systems that empower and fully use the skills of these individuals. Businesses often latch on to this concept under another guise e.g. delegated authorities, decentralised control, performance systems, goal setting, but often fail to implement adequate information systems that support the delegation, monitoring and control processes. Even in the most tightly controlled and centralised business model, information needs to be distributed and acted upon. At its base level, reports need to be delivered to the people that can act on the information that it conveys. Management need an overarching view to approve or monitor the impact of these decisions, with drill down to detail where necessary. Consideration needs to be given to the ability of employees to absorb and interpret information and turn it into useful action. Are they suitably trained to make best use of the information presented? Are they accountable and have authority to make the necessary decisions? Are all the people at each level of your business getting all the information they need to make the decisions they re empowered to make? If not, what is the ongoing cost to your business? The answers to these questions will determine whether reports need to be created, modified, culled, or redirected and whether decision-making powers need to be shifted up, down or around. For example, a new report on goods-intransit might not be useful until someone has responsibility for goods between stock locations. BEST PRACTICE BUSINESS REPORTING PAGE 3

6 cater for the needs of the individual Information requirements change over time and best practice requires a continuous cycle of review and improvement. The overriding principal is getting the right information, to the right people, at the right time, in a format that can be readily understood. Reports aren t necessarily words on paper, and the presentation format will depend on who they re presented to, for example: a detailed maintenance schedule for an aircraft maintenance manager a formatted report for a junior sales clerk that can be easily ticked and annotated secure online account information for a bank customer to view in private a warning light for a line worker Generally, the higher the managerial level, the more summarised the report. However, a good financial or operational system can present summary reports online with the ability for the user to drill down through the data to investigate particular areas of interest, thus a single report can be used by several users, who can each zero in on the information they want. This means the initial report can be very concise, but with the underlying data readily to hand. Some general considerations with designing or evaluating reports: Timeliness, completeness and accuracy of information need to be considered Clearly the more the better, but that needs to be offset against the value of the decisions that will be made, based on the cost of the report. Sometimes close enough really is good enough, and precision is unnecessarily costly Event-triggered reports These are good for identifying when something goes wrong or something exceptional occurs e.g. low stock levels or purchase value over a direct report s delegated authority level. Effective event-triggered reports and workflows allow managers to sit above the business, managing exceptions, rather than be trawling through and getting buried in the detail. Instead of being printed, they may be better stored electronically with an or alert notification or to-do of the critical event Information requirements change over time and best practice requires a continuous cycle of review and improvement. Few reports are completely useful year after year, and so ease/cost of modification may also be a factor when creating reports. As your business changes and grows, your surrounding information needs will also change. Maybe a skeleton report would be more useful than many specific reports so people can adapt it to their own needs. Information overload Depth of information needs to be appropriate to the audience. Conciseness is good, although too little information increases the risk as the user may waste time filling in the gaps or make a decision based on guesswork. Layout Can the pertinent information be found quickly? A mass of detail may be necessary in the report, but a well designed report should clearly show the essential information with relevant, supporting detail also easy to find and work through Spotlight anomalies People who use the same report format regularly can often see key differences quickly because of experience and they have trained their eye to note exceptions, such as unusually large or small numbers. Does the report design help spot these anomalies? Comparatives Reports often need to be comparative to be most useful, e.g. this year versus last year, year or month to date versus budget or forecast. BEST PRACTICE BUSINESS REPORTING PAGE 4

7 enabling technologies The underlying technology needs to be flexible and have the ability to grow with your business. For data to be used and useful, it needs supporting business systems readily accessible for collation of data and production of reports. The quality and completeness of the underlying business systems and database will often dictate the quality and completeness of the reports that can be produced. Building extensive reporting systems on shaky foundations can result in time consuming, inefficient and error prone administration and reporting processes. This is not good practice and in the medium to long term is unsustainable. There is a plethora of reporting tools available, therefore we need to select the right tool for the job. In some respects and with a stretch of the imagination, reporting tools share a lot in common with a set of golf clubs. The tool you use could be equated with one of the many clubs you could choose out of the bag to play any given shot. Any golf player will tell you that having a whole set of mismatched clubs will regularly lead to a poor result; the same is true for reporting tools. Having tools that work from like technologies and platforms will facilitate the process tremendously. Nevertheless, many bags will have a club which is not from the same suite to call on for specific tasks. Some general considerations with designing or evaluating your information systems and reporting tools: Open and integrated information systems and database Ideally all your business systems should be integrated in one application, platform or database. Data should be electronically captured at source and there should be no rekeying of information. This complete and accurate data store should be the base of all reporting, ensuring one version of the truth. Secure and scalable The underlying technology needs to be flexible and have the ability to grow with your business. Security and control of data and information is of paramount concern. Cost effective data capture Options can enable electronic capture of information at source rather than manually rekeying e.g. Bar code readers, electronic data interfaces etc. This creates efficiencies, reduces errors and widens the depth of detail available for reporting. Good reporting tools Can make building reports much quicker and easier, or even give the report users the ability to create their own. It s worth considering whether personalised reports give a better feel for information than standard offerings, or whether time spent creating individual reports might be better spent actually taking action in the business. Spreadsheets Enable financial data to be manipulated in a number of ways to get new insights into the business. They should be dynamically linked to source data in the underlying information system and have the ability to summarise financial data as well as drill back into transactional detail. Spreadsheets are the preferred reporting environment by accountants and if effectively used can be a powerful tool. Often spreadsheets are misused due to the inadequacy of the underlying system or due to no better reporting options being available. End to end business process Modern businesses have extended the boundary of the information and data they want captured e.g. sales quotes and communication exchanged during sales process, customers processing orders and projected demand directly into your system. Your information systems should support your desired end to end business processes, which may demand additional functionality plus support for automated workflows and strong security. Modern information systems will automate business and business processing compared with older legacy systems which merely automate tasks. Soft measures It s becoming commonplace for businesses to measure non transactional data e.g. sales hit rate, customer satisfaction and service level performance. This places pressure on inflexible or legacy systems to cater for this requirement, resulting in time consuming and error ridden manual processes. A flexible and modern information system should be able to cater for the data collation and reporting of all required information. Forecasting and projections Reporting tools and applications are available that assist the business to predict future events rather than merely report history. Examples include sales projections, cash flow forecasts, purchasing requirements, production planning. Business intelligence B.I. tools make it possible to merge a lot more data and analyse it in more depth without overloading the user. BI tools are good at identifying anomalies or trends that might otherwise have been missed. Report distribution Such tools allow the efficient and timely distribution of reports. They can cater for both push reporting and refresher information from a self help online reporting environment. The underlying technologies should always be subservient to the overriding strategy, desired business processes and information needs of your business and users. BEST PRACTICE BUSINESS REPORTING PAGE 5

8 steps to improve reporting in your business To progress and improve your current situation, here are some straightforward steps: Needs analysis Establish a team or engage a business analyst to gather the key information needs of the business and users, and assess the alignment to overriding strategy and business objectives. Once the needs are established, a preliminary assessment should be made of the existing information systems to see if they meet the identified requirements. The key output from this stage should be documentation on key pains and issues being experienced, opportunities identified for improvement and documentation on core business processes. A suggestion should be made if a business case exists to justify further evaluation work. Establish reporting framework Company operations, assets, strategy, structure and industry outlook all need to be considered to provide insight into the drivers affecting outcomes in your organisation. Establishing a holistic reporting framework and correctly identifying the components and their drivers is an essential part of successful reporting. Design solution The output from the preceding stages should be provided to your internal IT team and external technology solution partners with a request for them to propose solutions that will solve the business issues and capitalise on the opportunities that have been identified. The solution design documentation should have sufficient detail that will allow project investment to be quantified. If competing solutions exist, an evaluation process will need to be established to determine the best option. For large and/or expensive projects a business case should be prepared and, if the case stands, a decision made to proceed. Build and implement Further detail design analysis, project planning, build and rollout. The implementation needs to ensure that people are adequately trained and change issues managed. Support and optimise Evaluate that the outcomes sought have been achieved. Ensure support processes are in place and that periodic or adhoc processes are in place, to assess the opportunity to optimise or upgrade the systems or reports implemented. The steps shown here are valid for small to very large assignments the depth of detail and rigour applied will vary significantly based on the size of the issues, opportunity and/ or costs involved. summary The steps provided here are valid for small to very large assignments the depth of detail and rigour applied will vary significantly, based on the size of the issues, opportunity and/ or costs involved. To obtain the best value from your business reports and information systems, you need to: measure what s important, question the assumptions put information in the hands of the people who can make best use of it, and give them the authority to make decisions based on that information cater for individual users requirements and provide them with information that is timely and presented appropriately build strong information systems to support your overriding strategy and business information requirements train and empower your people pick the right reporting tools for the job keep questioning, optimise reports and processes as the business or environment changes follow a structured process in implementing change to ensure successful delivery of the outcomes sought Ultimately the decision to proceed with improved information and reporting systems will be based on the perceived benefits that will accrue versus cost of change. For the status quo no-change option, evaluate the cost of not having the information; how will the business be affected and consider the cost of inefficiency or poor decision making due to key information not being available. If you can measure it, you can manage it. Information is the lifeblood of any business and we encourage you to ensure that your team has the right information that enables them to make sound decisions that advances and ensures the success of your business. BEST PRACTICE BUSINESS REPORTING PAGE 6

9 enabling better business Enabling a better business solution can often mean a desire to achieve higher sales performance, make better decisions with accurate data, streamline or automate financial and business processes in a way that creates business success. To achieve this you need the right business software and a partner who will support you for the long term. With a team of over 100 experienced professionals throughout Australia and New Zealand, Enabling can review your business requirements, and help you to select the right solution from the very best software vendors in the market. We enable better business through our following Business / Industry solutions: Enterprise Resource Planning (ERP) Financial Management Information Solutions (FMIS) Customer Relationship Management (CRM) Supply Chain Management (SCM) Construction, Property Management and Engineering Solutions (CPE) Professional Services Automation (PSA) Business Intelligence (BI) Software Development and Integration (SDI) five key reasons to choose enabling These form part of our corporate vision and are the benchmarks from which we are able to determine the success and quality of the services we offer. Passion Is a key part of our culture. We care about your business and we want you to succeed. To this end we ensure that absolute value is what we deliver to your project, and we make sure our attitude and behaviors support this goal. Choice Having more than one offering allows us to focus on matching the right business solution to your distinctive business requirements. Enabling is unique in that we have partnered with several leading software vendors within our industry. Experience We understand business and technology; and with more than 100 team members, have the skills and resources to deliver results consistently. Methodologies With our best practice methodologies we are able to help lead your team from solution selection, through to delivery and long term support taking the guess work out of technology. Raving Fans A Raving Fan is when you would, without hesitation recommend Enabling to a friend or colleague. For Enabling the true measure of our success is a Raving Fan. the enabling experience The Enabling Experience focuses on delivering a superior level of service that creates happy customers (Raving Fans). This experience provides a complete methodology including project management discipline and tested best practices. The Enabling Experience is designed to help drive productivity through a consistent approach. Utilising standard tools and templates in this way we are able to achieve successful project execution driving business value from the outset, whilst always aiming to gain a Raving Fan as a result. a white paper publication from enabling PAGE 7