Webinar: Chart of Accounts Alignment through Information Governance Huron Presenters: Todd Weinstein Alex Vlaisavljevic August 28, 2014
Objectives & Agenda Webinar Objectives: Agenda Discuss the importance and value of Information Governance Provide examples of information governance in action Deliver recommendations to aid your Information Governance Journey Introductions Information Governance & COA Alignment Business Case Considerations Case Studies Recommendations 2
About Huron Analytics Huron Performance Management & Analytics 3
Information Governance Considerations Manage Complexity Information users need: Trusted and timely data Information management challenges: Data meaning Data ownership Data policies Data growth Data change Data quality Data sharing Data lineage Data access rights Data integration 4
Why is Information Governance Important? It is too costly not to have it! Costs Delayed and Poor Decisions -Result of inaccurate, incomplete and untimely data Redundant and Siloed Efforts - Decentralize data maintenance, duplicate efforts, disparate processes - Limiting data usage and lack of data sharing Lost Productivity - Investigating data issues, data reconciliations - Lack of data management accountability leads to repeatable issues Value Faster and Better Business Decisions - Made using consistent, reliable and timely information Maximized Utilization of Data Assets across the Enterprise - Common language of understanding of shared business data - Extended cross-functional data usage (e.g. cross-selling, additional analysis ) Increased Operational Excellence -Connects people, process and technology -Establishes data management accountability and aligns data management efforts 5
Information Governance Value Information Governance is a Program, not a Project Sustained data quality and extended usability over time. Governed Data Quality Peak w/o Information Governance Ungoverned Data 6
Common Information Governance Business Cases 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Departments in Rollup Reporting out of Sync Example 1a: Issues with Common Definitions across the Enterprise Data Source: Financial System HR System Board of Trustee Report Budget Model Org Chart Org Chart Organization Rollup: Student Services Student Services Student Support Student Support Admissions, Records, Registrar, and Fin. Aid Student Affairs Library Dean of Students Student Housing Athletics Center for Career Development Summer Housing Programs Student Medical Golf Tournament Annual Fund Athletics Admissions and Registrar Student Newspaper Financial Aid 8
Reporting out of Sync Example 1b: Issues with Disparate Data Sources, Timing of Data Updates Vehicle Center Accounting Report Vehicle Chargeouts 287 Central Sales Admin. Report Vehicle Chargeouts 282 Vehicle Operations Report Vehicle Chargeouts 285 Who has the right number? Challenges: Unclear data ownership Definitions not shared among end users Incomplete data used for analysis and business decisions Data management poorly coordinated or monitored Recommendations: Formalize data ownership and responsibilities Authorize and publish definitions (multiple definitions may be needed) Synchronize data distribution to enterprise systems 9
Inefficiency and Redundancy Example 2: Issues with Synchronizing COA Master Data across Enterprise Systems Challenges: Chart of Accounts are referenced in nearly all enterprise systems 50%+ of systems are synchronized manually Organization segment is most commonly referenced in enterprise systems *Oracle Data Relationship Management (DRM) Recommendations: Assign responsibility of master data maintenance for each enterprise system Implement technology solution such as DRM* to reduce maintenance effort Establish information governance process to manage changes 10
Underutilized Data Assets Example 3: Issues with Data Sharing Challenges: Although meaningful amount of data is collected in all parts of the organization/institution, it is not typically used to support decision-making Data may not be collected in a usable manner Recommendations: Identify key business processes and decisions that can be enhanced with additional data analytics Leverage data as strategic asset to differentiate operations from competition 11
Mini-Case Study COA Information Governance in Action at Fortune 500 Manufacturing Company 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Business Case Managing Complexity & Avoiding Risk 20 instances of multiple ERPs Oracle EPM Suite and Business Intelligence purchased Went through financial restatement Reduced complexity of managing integration of legacy and new systems Increased appetite for risk avoidance 13 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Implementation Timing Key integration component of a corporate-wide initiative. Finance Transformation Goals: : Create a New, Simplified Corporate CoA Establish Global Standard and uniformly record transactions Redefine and rationalize enterprise accounting dimensions Replace Aged Tools Hyperion Enterprise with new Hyperion HFM and FDM for corporate consolidations M&D corporate ledger with PeopleSoft G/L Provide Robust Financial Analytics Multidimensional analysis via Essbase Create Finance Warehouse containing G/L data from 20 systems OBI EE to leverage dynamic CoA mappings - data view in Local and Global CoA 14 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Initial Scope of DRM solution Foundations of Financial Master Data Governance 10 governed dimensions e.g. Account, Department, Entity 20 supporting hierarchies e.g. Ledger Sources, Entity Profiles ~ 55 local CoAs from more than 20 source systems ~ 50,000 account mappings varying levels of mapping granularity Finance Hierarchies CoA Mappings Request Workflow Master Data Integration ~ 150 users Up to 5 approval levels varying paths for each request type EPM FDM, HFM, Essbase Data Warehouse OBIEE 15 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Finance Information Governance Structures Finance Information Management Council Members Finance Segment Directors Accounting Directors Assistant Corporate Controller Finance IT Director Management Team Members Enterprise Architect Data Governance Manager Corporate Fin. Sys. Manager Responsibilities Makes Decisions Sets Priorities Approve Policies Manages Escalations Responsibilities Facilitates Coordinates Defines Set Standards Recommends Executive Sponsor - CFO Fin. Council Management Team Working Group People Working Group Members DRM Architect Data Governance Analyst Finance Analysts Business Data Stewards Business Application SMEs IT Application SMEs Responsibilities Executes Monitors Measures Enforces Communicates Recommends Coming together is the beginning. Keeping together is progress. Working together is success. Henry Ford 16 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Key Challenge Change Management Loosely structured manual spreadsheet based process. Well defined automated & integrated process. Before Implementation Commitment to Timelines Not Strictly Enforced - difficult to tell who dropped the ball or where is the ball - lack of tools and manual process Master Data Non-integrated and Manually Managed - tool specific deadlines resulted in suboptimal coordination - out of sync conditions across financial tool set Manual Process Lacked Controls and Auditability - errors and omissions considered to be a part of the process - limited and unreliable request history After Implementation Timely and Transparent CoA Requests Management - well aligned process with right tools - easy to use web-based interface to the master data repository Integrated and Centralized Master Data Management - highlighted importance of commitment to deadlines - timely synchronization across financial tool set Embedded Systems Controls and Audit Trail - enforced greater data quality - transparent and complete request history Organizational commitment to timely processing complete and accurate and master data requests. Low From To High 17 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Business Benefits Realized Month-End Effort is No Longer Focused on Managing CoA Values and Mappings. Our Analysts Focus is on Analyzing the Business Results and Closing our Books. Assistant Controller Integrity, Consistency & Quality Do it right the first time and every time Enforcement through system controls Efficient processing Orderly Change Tribal knowledge vs. Transparency Streamlined Process Synchronized Master Data Distribution EPM, B.I. tools, ERP(s*) What tool is right question addressed Respond to changing business environment Acquisitions, Divestitures, Re-orgs, Regulatory Requirements Flexibility & Agility 18 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Mini-Case Study COA Information Governance in Action at Higher Education 2014 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential.
Chart of Accounts Redesign or Rationalize? UNIVERSITY OF CALIFORNIA, BERKELEY COA Redesign Case Study Chart of Accounts Redesign Project # Characteristic Redesign Rationalize A Segment Definitions B C Right Data Available for Reports COA Values Added/ Changed/Inactivated D # of Business Units and ERPs E General Ledger is Complemented by Sub-Ledgers Challenge An organization with 15 business units and 6 ERP systems struggled for years to produce consolidate financial statements. Further, the information provided at the corporate level did not although for meaningful analysis due to significant number of data mappings. Results A technology-agnostic chart of account design that met needs of all 15 business units Multi-segment design with an individual definition for each segment Roadmap to implement COA design to alleviate reporting challenges Lessons Learned All Business Units must agree to participate (and compromise) for successful design Redesigns take significantly more investment of senior leaders than a rationalization 20
Chart of Accounts Redesign or Rationalize? UNIVERSITY OF CALIFORNIA, BERKELEY COA Rationalization Case Study Chart of Accounts Rationalization Project # Characteristic Redesign Rationalize A Segment Definitions B C Right Data Available for Reports COA Values Added/ Changed/Inactivated D # of Business Units and ERPs E General Ledger is Complemented by Sub-Ledgers Challenge The organization was implementing an EPM solution and a revised set of management reports. The chart of accounts was identified as a limitation to completing the design of some reports. Results Clarified definition of each segment during stakeholder engagement exercises Inactivated duplicate values Inactivated unused/rarely used values Reorganized departmental hierarchy to align with changing business needs Added additional segment to meet new reporting needs Lessons Learned Stakeholder engagement is crucial to a successful implementation Providing tangible samples to stakeholders makes the content real Majority of work can be completed by staff 21
Summary Recommendations A primary lesson of history is that periodically, and often at the most inconvenient times, society needs to make a sharp break with old habits and deliberately learn new of ways of behaving. from Jumping the Curve, by Nicholas Imparato and Oren Harari Information Governance is important as it will help you deal with today s challenges: More information generated than any time in the past More data sources and data integration requirements More demand for sharing information across the enterprise Business customers expectation that information is timely and accurate (despite all of the above) Information Governance implementation is a multi-year journey Every journey starts with the first step. Initial steps to follow: 1. Assess organizational readiness for Information Governance 2. Start with the business case (consider COA as one of less controversial Master Data domains) 3. Get support of senior leadership 4. Identify decision making organizational structures 5. Leverage Change Management to socialize change 6. Enact and Oversee 22
Questions? Todd Weinstein (312) 880.0433 tweinstein@huronconsultinggroup.com Alex Vlaisavljevic (312) 880-3790 avlaisavljevic@huronconsultinggroup.com 23