A great deal of information created and used in finance departments is inaccessible to the rest of the organization because a lot of the enterprise data resides in multidimensional databases (“cubes”) or on individuals’ desktop spreadsheets. Cubes are an integral part of analysis and reporting done by finance departments in a majority of mid-size and larger corporations. They are a real improvement over desktop spreadsheets as data repositories for collaborative and repetitive tasks. Yet few outside the finance department use them because of the difficulty in extracting data into warehouses where the rest of the company can access them. Addressing this issue has become increasingly important since, to perform the advanced analysis and reporting that generate deep insights and effective business models, it is necessary to be able bring this information together with operational data. The operational data comes from ERP and CRM applications, supply chain and logistics systems, and other software. Even within the finance department accessibility can be an issue because often there are multiple cubes and extracting and synthesizing data it into a report or analysis can be quite time consuming. The situation is worse with spreadsheets. It’s not just accessibility but also data quality (spreadsheets are notoriously error prone) and data synchronization (the number is correct but out of date).

There are three important consequences of poor information management in finance departments. One is that people don’t have the information they need to correctly assess their performance, trends, etc. Another is that it takes too long for them to get that information (slowing the monthly or quarterly close or preventing people from having up-to-date intelligence). A third is that finance organizations waste a lot of time retrieving, massaging and correcting data – time better spent on more useful activities. This focus is a key priority for the business technology priority for driving more effective financial performance management. 

This is not just an IT problem. Finance organizations must have someone (probably in the controller’s organization) whose job it is to ensure that financial data is accessible and accurate, and that the company is not wasting time and other resources getting information where it needs to go.

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Regards,

Robert D. Kugel CFA - SVP Research