The Role of Business Intelligence Dashboards in Financial Management Tony Bray

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1 Incorporating ASSET & RISK REVIEW The Role of Business Intelligence Dashboards in Financial Management Tony Bray Biography Tony Bray Managing Director Intuitive Business Intelligence Tony Bray is Intuitive Business Intelligence s Managing Director. Tony has held senior management positions in the software industry for over thirty years and was previously co-owner of Version One Ltd., one of the fastestgrowing technology companies in Europe. He co-founded Intuitive Business Intelligence with Roger Stocker and Edward Smith in Intuitive Business Intelligence is the authors of the advanced business intelligence software tool, Intuitive Dashboards. Keywords Business intelligence (BI), KPIs, Financial dashboards, financial management Paper type Research, Case study Abstract Finance Directors and managers need access to relevant, accurate management information in order to make confident decisions about business performance. In today s rapidly changing business environment, the need for a fast, efficient solution for accessing management and financial data has never been more critical. We explore the role of business intelligence dashboards in enhancing access to key management information and how they contribute to improved corporate decision-making.

2 Introduction Growing the value of a business takes time, effort, investment and a clear strategy for increasing revenues and profitability. Most organizations begin modestly and grow steadily over time, resulting from a sustained sales and marketing effort which enables them to increase their client base, refine their value proposition and grow market share. In a smaller business with simple systems and processes, it is quite easy for the Finance Director and managers to gain visibility of what is happening in the business. With a small management team working closely together, they can speak directly to colleagues to get an instant picture of sales opportunities, market trends and issues that may affect the financial status of the business. As a business grows organically or through acquisition, it must support more customers, new products and a larger workforce. Managing an expanded business brings two major headaches to the Finance team. First, scaling up a business demands that structured systems and processes are implemented to manage business operations effectively; secondly, if a business has grown through acquisition, the merged entity will also need to successfully integrate the legacy systems and processes utilized in the separate businesses. So, while the Finance Director remains intimately connected to the financial position of the business, he continues to face the challenge of finding ways to enhance overall performance across all operational areas of the organization. The simple truth is that key management information is frequently locked within departmental silos a huge range of disparate information systems within varied functions of the business. The ability to gain a fast and accurate snapshot of performance becomes a time-consuming, inefficient and costly exercise in generating reports, many of which are out of date by the time the report is received and do not contain the most critical and relevant data on which to base important business decisions. Connecting silos of information to achieve performance excellence Reviewing business performance is central to understanding which areas the business needs to improve and the specific actions you must take to remain competitive and profitable. But with each department running their own data systems, which work well and represent a significant investment in time, training and money to the business, is there a faster way to connect these silos of information and realize the value of the data they contain? Imagine that one of your clients calls your helpdesk team repeatedly during the course of week, with a range of different queries and issues about your product. The client has a support contract with you, but as your helpdesk system is not connected to your accounts software, help-desk staff are unaware that the client 2 Credit Control

3 has an unpaid invoice outstanding for six months and, therefore, has breached the terms of their support agreement. Business Intelligence (BI) dashboards enable senior managers to see what is going on in parts of the business they would not normally have sight of, by enabling disparate information within existing systems to be consolidated and presented in a single, graphical, easy-to-understand dashboard view. The inherent customisability of BI dashboads also enables different end-users to view the information most meaningful to them in a variety of graphical formats, even if the source data is not stored within their own department s systems. For example, a Finance Director can view key financial data such as cashflow, creditors and debtors, but also sales against target and sales by product, total hours billed and resource utilisation, and advertising expenditure. The ability to instantly gain access to a holistic snapshot of organizational performance provides a demonstrable advantage over the reams of lengthy, unintelligable and quick to outdate reports typically produced for financial reporting requirements. Key benefits of implementing a business intelligence dashboard The most intuitive dashboard solutions enable the Finance Director to quickly and easily respond to the three most critical questions he s likely to face: How are we doing against stated metrics? Why are we on- or off-track? and What actions do we need to take today? A business intelligence dashboard provides proactive alerts to potential shortfalls in performance, such as variances to cashflow projections, issues with debtors and creditors, or potential threats to projected turnover or profitability. By consolidating information from a range of existing data sources including accounting tools, ERP systems, spreadsheets, CRM, HR and other business software, business intelligence dashboards provide a more holistic, singular viewpoint of performance. This at-a-glance perspective not only enables corrective steps to be taken quickly when performance dips below stated metrics, but it also highlights opportunities and positive trends. Finally, business intelligence dashboards provide the ability to drill-down through the data to the root cause of potential issues with just a few quick and simple mouse-clicks. In real-terms, there are numerous immediate benefits for the Finance team from the use of a BI dashboard: Increase the speed of your budgeting process and the relevance of your budget. Prepare forecasts faster, with greater insight and accuracy. Credit Control 3

4 Ensure realistic results and improved performance when plans, budgets, and forecasts all work seamlessly with each other. Account for one-time or unusual events that can skew results and plans. Generate effective plans without statistical expertise. Reduce reliance on one-off spreadsheets for budgets, plans, and reports. Decrease the time spent on planning, budgeting, and forecasting cycles. Gain better insight into company performance and the factors that drive the business. Be more efficient at analysis. Improve decision-making. Produce more reliable information to help drive better results. Case study: Concorde IT Group Concorde IT Group provides award-winning managed IT and IT infrastructure services designed to cover the entire lifecycle of an organization s IT systems from consultancy, design and implementation, to ongoing support and management. The company quickly acquired a business shortly after formation in 1985, and has acquired a further three companies since Continuing to focus on growth through acquisition, Concorde IT Group s senior management team is actively researching complimentary businesses to acquire and has an aggressive growth target to double in size by As a result of their growth strategy, the management team faced a number of significant obstacles to improving their overall business performance. With a defined objective of realising better financial insight from the existing systems, the senior management team, led by Chief Executive Officer Colin Meakin, decided to implement a corporate-wide business intelligence (BI) solution, based on Intuitive Dashboards from Intuitive Business Intelligence. The company s recent acquisitions meant that they had three entirely different accounting and sales order processing (SOP) systems in place, which they wanted to consolidate as a single, accurate viewpoint of the company s financial position at any given time. In addition, they operated a range of Customer Relationship Management (CRM) and helpdesk systems, which they also intended to connect together. By implementing Intuitive Dashboards across their accounting and SOP systems, the senior management team have been able to resolve the issue of not knowing how the acquired companies are performing. According to Colin Meakin, We experienced the pain of not knowing how well our acquired companies were doing; unless we were prepared to train on the acquired, often legacy, systems, which isn t practical or costefficient, we needed a fast solution. Intuitive Dashboards fixed this pain in an instant with no training required. 4 Credit Control

5 Meakin continues, If you know how much you re selling, how much profit you re making or conversely, how much you re not selling or how much profit you re not making, you can take the steps you need cut costs, boost sales to achieve the profitability you ve set as your target. And the profitability provides the means for us to invest more heavily in enhancing our brand and maintain exceptional client satisfaction. With Intuitive Dashboards, we have our finger on the pulse of our business and it s a dynamic reading; we don t have to wait for management accounts to be published to tell us how well we re performing. Concorde IT Group s implementation of Intuitive Dashboards links seamlessly to their existing data systems, MS Dynamics, Sage, CRM, help-desk systems and numerous spreadsheets, presenting a consolidate view of the most important business data in the right amount of detail and in an easy-to-use graphical format. Meakin concludes, We ve realised fast ROI from our implementation. Now, we re no longer driving the business whilst looking in the rear view mirror, as Intuitive Dashboards allows us to see over the horizon and take fast, corrective action. BI: a must for financial management success An effective BI dashboard solution is a must have in today s financial environment. Companies in all industries are using BI dashboards to enhance their decision-making processes across all functions. With the extended responsibilities placed on the FD, dashboards represent a cost-effective, fast to implement solution that can deliver quick wins by leveraging existing investments in varied data systems across all operational teams to provide realtime insight into an organization s business and financial position. This article first appeared in CREDIT CONTROL JOURNAL (incorporating Asset & Risk Review), Volume 32 Number 5 & Published by: House of Words Limited 7 Greding Walk, Hutton, Brentwood, Essex, CM13 2UF UK Website: House of Words Ltd Credit Control 5