From Data to Insight how full-stack BI operations enable CFOs to thrive in today s rapidly evolving business environment

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1 BUSINESS INTELLIGENCE From Data to Insight how full-stack BI operations enable CFOs to thrive in today s rapidly evolving business environment Genpact Today s CFO faces myriad challenges, from ongoing monitoring of business performance, analysis and decision making, to quality of financial data, sharing of relevant information and accuracy in compliance. CFOs are starting to question the current paradigms of business intelligence (BI). They find them biased towards technology-only solutions, their implementation is lengthy and inflexible and most importantly, they often neglect a thorough analysis and prioritization of the measurement of key business performance metrics before closing on the BI design and implementation. This can prevent CFOs from truly embedding business intelligence into their company s operations. Many organizations, however, are finding answers in a new breed of full-stack BI solutions that embed analytics, IT, domain expertise and other capabilities into their business processes. Overview The CFO s role has historically been focused on preserving the integrity of the financial data. Today, the landscape is changing. Technology is allowing CFOs real-time access to strategic data. The insight such data provides has the potential to drive more timely market-driven decisions, allowing the CFO to take on greater responsibilities. In many cases, the traditional CFO role is transforming to include greater involvement in setting corporate direction, strategy and creating long-term shareholder value. CFOs are at pivotal intersection of cross-functional data highways, strategy and enterprise performance management. Reporting and guidance (financial, non-financial) Forecast, Report (financial, nonfinancial) Revenue, Working Capital (AR), sales projections Sales & marketing COGS for pricing (short and medium term), Projected service-levels, NPI pipeline and strategy External Stakeholders Budget, KPIs, allocation and monitoring of OP/CAPEX, Inventory CEO, Board Finance COGS (short and long term) and respective risk, EHS risks Performance expectations (financial, non-financial) Short- and long-term expectations of revenue and earnings growth; strategic initiatives Working Capital (AP) Procurement Operations (mfg, facilities) Demand and availability of production inputs (commodities, energy, components), respective short and medium term price Figure 1. CFOs are at pivotal intersection of cross-functional data highways, strategy and enterprise performance management

2 The business intelligence on a The evolution of CFO s desk is often the only place the CFO from where significant financial and scorekeeper to operational data come together business partner combining asset usage intensity comes at an and profitability and not just revenue. However, the visibility opportune time. of such data and the ability to The demands of analytically aggregate them and business, competitive process them at scale, is limited and regulatory by many constraints starting with pressure in today s (despite many years of investment economically in tools) technology itself. challenging environment are forcing organizations to become smarter and more efficient about the use of information. Yet statistics indicate most CFOs are struggling to balance new and old roles. According to a recent survey conducted by Genpact, 51% of the average CFO s time today is spent on transactional activities and only 21% on decision-making support. Today s CFOs sit at a crossroad of data that can be used not just for reporting and compliance, but also for prediction of future risks and trends. The business intelligence on a CFO s desk is often the only place where significant financial and operational Inaccurate forecasts due to limited visibility and, often, poor data quality; limited time spent on insights and decisions due to poor data-readiness Revenue, Working Capital (AR), sales projections Low confidence in revenue and margin forecast due to inaccurate data COGS for pricing (short and medium term), Projected servicelevels, NPI pipeline and strategy Sales & marketing CEO, Board, other stakeholders Forecast, Report (financial, nonfinancial) Lower budget/ planning confidence, Investment rate hurdle doesn t reflect all risk; ineffective strategy execution against KPIs Silo based data, limited crossfunctional visibility often leads to inaccurate COGS Budget, KPIs, allocation and monitoring of OP/CAPEX, Inventory Finance Operations COGS (short and long term) and respective risk, EHS risks Short- and longterm expectations of revenue and earnings growth; strategic initiatives Limited, static, and aggregate view of production level, risk, and cost visibility leads to approximate suboptimal budget allocations Procurement Complexity often clouds the impact on COGS and margins for tactical decision making and reporting Figure 2. Robust BI enables CFOs to anticipate, account for, and possibly mitigate the impact of adverse incidents and trends. data come together combining asset usage intensity and profitability and not just revenue. However, the visibility of such data and the ability to analytically aggregate them and process them at scale, is limited by many constraints starting with SIMPLIFIED Limited/silo visibility and poor dataquality can impair prioritization; induce errors in judgments Working Capital (AR) Demand and availability of production inputs (commodities, energy, components), respective short and medium term price (despite many years of investment in tools) technology itself. CFOs need to conquer the increasing complexity of their roles and enable a coordinated approach based on intelligent business information that enables them to anticipate, account for, and possibly mitigate the impact of adverse incidents and trends. Static visibility and high-level allocations lead to sub-optimal working capital Today, the ability to extract, integrate, analyze and interpret business information in a timely, proactive way is an increasingly important factor for organizations. Advanced business intelligence solutions can help CFOs make better use of both time and data. The most successful businesses are going beyond traditional BI tools to full-stack BI operations that encompass analytics, IT, domain expertise and process delivery. Such tools are seeing rapid growth in today s tight economy, driven by intense competitive pressures. This white paper examines how CFOs are using advanced BI tools to improve decision-making, identify new business opportunities, maximize cost savings and detect inefficient business processes. Typical BI challenges Traditional BI approaches are typically technology driven. As a result, they often are not prioritized or designed based on performance-critical metrics and related business processes. This in turn limits their ability to embed intelligence into the enterprise s operations. The typical BI architecture within a finance organization is complex. As a consequence, there is often a significant gap between what is important for the finance function and how well it is executed. For instance, while the ability to deliver consistent data reporting is high on important (64%) for most organizations, their ability to successfully execute if dramatically low (16%). Similar scenarios exist for other important areas such as budgeting and planning, financial and statutory reporting, and compliance and controls, where the ability to execute is significantly low as opposed to the strategic importance to the function. Which is why, the CFO s imperatives around business insight, compliance and efficiency require a robust BI solution. For example: Business insight: Approximately 57% of finance executives feel that the lack of timeliness and accuracy of non-financial data is a concern. The inability to correlate different data sets coming from different parts of the organization, such as divisional sales with product and client profitability data, inhibits the ability to maximize profits. Compliance: Today s CFO is typically responsible for a large number of stringent regulatory reports each with a unique format and reporting standard. Many of these reports require high quality data accuracy and alignment is crucial. A robust BI solution enables automated exception management for simple cases and facilitates informed collaboration on complex cases.

3 Efficiency: The enterprise data infrastructure is increasingly complex, and diversity of management information is increasingly being required by decision makers. There is also rising demand for efficiency and flexibility of the finance function, along with continued pressure to curb costs. Process-driven BI puts an emphasis on embedding analytics into the enterprise operations as well as a unified approach to enterprise data management. Using end-to-end business processes, their outcome-relevant metrics and related factors as a lens to plan for business intelligence needs can be a powerful departure from the usual requirement-to-configuration approach to BI. It enables the selective investment into what really matters a subset of metrics, processes and people. Data consolidation and reconciliation Report Dashboards for key stakeholders Gather Feedback Internal and external ecosystem refines questions, hypotheses (recommended starting point) Implement enterprise data and BI enablers, program rules (typical starting point) Benefits of a full-stack approach To be most effective, the solution should encompass a fullstack of analytics, technology, data management, domain expertise, process management and delivery. A full-stack BI solution enables actionable business intelligence. Such solutions are driven not by the feature of the BI tool, but by performance drivers and related business intelligence generation enabling analytics embedded into business processes. This can allow a company to enhance a number of procedures. For example, regulatory compliance levels can be improved along with reduced compliance costs. As Account and Compute Implement Initiatives mentioned previously, the BI, ERP, UC&C EXECUTE PROCESSES Operate New Processes Set Targets Cascade KPIs, identify thresholds and key if-then Measure Performance Analyze and Predict Correct Strategy Advanced statistical modeling Data extract, cleanse, standardize, enhance Enable decision making at the moment of truth e.g. CRM rules Figure 4. Closed-loop BI is a business process, not an IT or statistical discipline, and requires robust operations in the background. A full-stack BI solution enables actionable business intelligence. Such solutions are driven not by the feature of the BI tool, but by performance drivers and related business intelligence generation enabling analytics embedded into business processes. large number of stringent regulatory reports that are required today, for example in financial services or health care, each with a unique format and reporting standard makes this increasingly important. Advanced BI solutions can also improve the management of enterprise performance, thanks to enhanced decision and Business Intelligence Strategy (re)design and Build Impact Insight Factory Analytical Capabilities Predictive Models Statistical and Social Media Analysis Non-Automated Reports (standard, ad-hoc, user driven) *BI Automation/Platform (data model and automated reporting layer) Enterprise Data Management and Warehouse (Infrastructure layer) PREDICTIVE, DESCRIPTIVE, AND SOCIAL MEDIA ANALYSIS PROCESS -DRIVEN BI AND ANALYTICS ADVISORY Enterprise information and data-management strategy Big Data strategy DECISION PROCESS REENGINEERING Redesign of process related to data sourcing, maintenance, processing, and use y Decision Process Reengineering BI and Analytics Advisory BI REPORTING Operational/production reporting, BPM scorecards Data visualization and dashboards In-memory OLAP, mobile BI, self-service BI Data dissemination (downstream flows) Specialized functional solutions ENTERPRISE DATA MANAGEMENT AND WAREHOUSE Master data management Data governance and quality ETL and BPM integration Data warehouse appliances and federation Big Data integration *Includes Self Service BI, OLAP online analytical processing, BPM business process management, ETL extract, transform and load Figure 5. Full-stack Business Intelligence solutions throughout the BI lifecycle. reporting processes (e.g. days to close, access to right reports by right decision makers) and improve efficiency by reducing manual reporting efforts. A selective approach to business intelligence reporting, as well as reengineering of faulty processes and the establishment of appropriate delivery models to cleanse data, enables the reduction of data management costs. Advanced BI operations in practice The following examples demonstrate how a number of businesses have recently put robust BI solutions in place to help them address a variety of business challenges. CFO Challenge: A global financial services company had a tedious reporting process that was not suited to accommodate the growth of the company. Solution: A new, robust BI solution now allows the CFO insight into the entire business. Enterprise-wide closing and consolidation The Asia-Pacific geographic division of a global financial services company depended heavily on its parent business for reporting. The division had a tedious and repetitive reporting process that was not scalable to support growth. In addition, the division had multiple general ledgers (GLs) and wanted to move to a phased, singleinstance GL. Given the parent company s complexity ($24 billion in assets, a presence in over 10 countries and 100,000 customers), the transition was challenging. To address these challenges, the division adopted a robust BI solution that included a reporting system with three Hyperion cubes closing and consolidation models and a data entry cube. Doing so allowed the division to replicate the corporate reporting model. It also enabled it to make a smooth transition to a new GL at no extra cost.

4 The division now conducts data sourcing from multiple GLs with trigger files to determine source data refresh. The solution allows for: Hierarchy maintenance through a master data management tool Multiple currency reporting/analysis; automated solution using AppWorx (a tool for process-dependent scheduling) Month-end, quarter-end, year-end reporting and analysis While the division CFO could previously access only summary level data, the BI solution now allows him or her insight into the entire business. In addition, it has reduced analyst time previously required due to time zone issues. CFO Challenge: A global oil and gas OEM used a limited Excel-based financial planning process that was inappropriate for the needs of its users. Solution: Use of a common, user-friendly planning and reporting tool has improved productivity. over the counter theoretical prices. Sophis was the central hub that processed trade data and static data and returned the risk calculation and P&L data to various downstream systems for reporting and reconciliation. The firm wanted to decommission Sophis and replace it with a strategic in-house architecture that would replicate Sophis functionality to ensure business continuity. The company collaborated with an industry expert to develop a BI implementation that would allow it to achieve its goals. The two companies then worked together to develop a proof of concept for the new system and establish a decommissioning roadmap for the Sophis Risque application. The company s new, BI-based solution is completely metadata driven and features end-of-day feed analysis along with strategic system mapping, creation and implementation of feeds and feed elicitation with downstream systems. Enterprise planning and budgeting implementation A large, U.S.-based global oil and gas OEM engaged in the manufacturing and servicing of heavy industry products was challenged by a manual and error-prone Excel-based financial planning process. The company also lacked a repository of historic data for analysis and reference. Data maintenance was an arduous task and variance reporting a significant challenge. To address these challenges, the company adopted a Hyperion planning system comprising three user streams and defined workflow processes to allow for approval mechanisms. The system defines the automated actual data load process for baseline plan data. Users now input functional currency which is then converted to reporting currency based on exchange rates. The application allows users to adjust the plan input data with stretch to arrive at final plan data. It also includes a robust security design to accommodate platform users, regional users and headquarter-based users, allowing them selective access to data without losing workflow process functionality. As a result, the company has experienced improvements in productivity and simplicity and now has a common, userfriendly planning and reporting tool. CFO Challenge: A global financial firm wanted to create an organizational risk-reporting platform. Solution: A new BI-based solution is completely meta-data driven and is allowing the company to achieve its goals. Risk reporting platform development A U.S.-based global financial firm was looking to create an organizational risk-reporting platform. The client used the Sophis Risque application to book trade, calculate P&L, risks and CFO Challenge: A large investment bank wanted to create a tool for their Value at Risk (VaR) Reporting Basel II implementation. Solution: A new BI-based solution easily analyzes risk characteristics and enables numerous additional benefits. Value at Risk Reporting for Basel II A large investment bank wanted to create a tool for their Value at Risk (VaR) Reporting Basel II implementation. The bank was challenged in monitoring trading VaR limits for its businesses and had inadequate visibility into potential losses at different portfolio and sub-portfolio levels. The bank faced additional challenges around data sourcing, integrity, data quality and changing regulations. To address these challenges, the bank implemented a scenario analysis tool to analyze risk characteristics (i.e. fund sensitivity analysis based on change in both markets scenarios - LIBOR, credit spreads, ratings and holdings scenarios). The tool includes VaR computations, historical simulations and scenario generation in support of current needs. The tool also evaluates risk metrics for money market funds based on credit quality, quantity of securities in the fund and number of shares outstanding. Finally, the analysis tool includes QA and production support for regulatory change implementations. Conclusion In addition to maintaining financial integrity, today s enterprising CFOs have the opportunity to empower companies. As their role expands and the CFO plays a larger part in a company s success or failure, it is more important than ever to ensure they have the tools needed to formulate real-time decisions that advance the business.

5 Full-stack BI solutions cover the entire BI, thanks to the combination of process analysis, organizational/operating delivery model related to data processing and technology. It provides actionable insight driven not by the individual features of BI tools, but by the performance drivers and related processes of analytics embedded into business processes. They cover the full-stack of BI from enterprise data management and warehousing to BI automation and platforms (data modeling and automated reporting) and non-automated reports (including ad-hoc analysis and user-driven reports). Why Genpact Genpact s Integrated Business Intelligence Solutions is a unique approach to industrializing BI operations driven by its thorough understanding of performance drivers and related process of business intelligence generation and use. The solutions encompasses analytics, technology, data management, domain expertise and process management, covering the full-stack of enterprise performance management, risk and compliance, IT infrastructure, automated platforms, custom reporting and analytics and related advisory and reengineering. Integrated BI Solutions also includes technology and peoplebased support that results in superior scalability and costeffectiveness. Benefits of the solution include improved regulatory compliance levels along with reduced compliance costs and effective management of enterprise performance due to enhanced decision and reporting processes. Genpact brings a thorough understanding of the performance drivers and the related process of business intelligence generation and usage (closed loop) to each assignment. This includes the full-stack of data and analytics, with technology and people-based support, creating solutions that are costeffective and offer superior scalability. In addition, Genpact offers industrialized operations that are robust and complement each client s own capabilities. We have adopted a scientific approach to business processes that enable our analytics and embed them into your own processes. Genpact employs one of the largest BI and analytics talent pools, with more than 60,000 global associates in 18 countries who are active in industrialized processes operations. Our team brings to each assignment the experiences gained from managing more than 4,700 processes for more than 700 clients across more than 40 industries. We have one of the highest satisfaction scores in the industry and have a large pool of referenceable clients. Business Intelligence Portfolio of Solutions for CFO Enterprise Performance Management Risk and Compliance Non- Automated Reports (standard, ad-hoc, user driven) BI Automation / Platform* (data model, automated reporting) Enterprise Data Mgmt. and Warehouse Planning Consolidation Management reporting Strategic and Ext. Reporting Financial consolidation and reporting Planning Data Management Data Sources Integration Reporting Profitability and risk analysis Regulatory reporting Operational reports leveraging ODS*/ Data Warehouse Data governance and quality Data models Master data management Data extraction, transformations, and loading BI Strategy, Advisory, and Process Re-engineering Infrastructure Slice and dice, interactive analysis, root cause, cubes, what-if Business insights and impact opportunity * Includes Self Service BI, ODS operational data store

6 About Genpact Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients. Genpact stands for Generating Impact visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEP SM ) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability. We have global critical mass 60,000+ employees in 24 countries with key management and corporate offices in New York City while remaining flexible and collaborative, and a management team that drives client partnerships personally. Our history is unique behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years. For more information, visit Follow Genpact on Twitter, Facebook and LinkedIn Copyright Genpact. All Rights Reserved. For more information, contact: business.intelligence@genpact.com Visit our website at: