8 Report Types for Better Information Delivery

An important distinction to keep in mind while designing and building your management operating system is the classification of information and reports in the Gather process.

Classifying helps you assign the right process, tools, data, and resources to information, reports, and the Gather process. Without an overt classification, you can end up delivering information inefficiently, or worse, incorrectly.

Here are some common classifications:

  • Financial. Usually relates to items found on the Profit and Loss statement, balance sheet, or cash flow. Content can be at a detailed or summary level.

    Enterprise Performance Management, A Management Operating System, EPM, Ron Dimon

    A Management Operating System

  • Operational. Usually contains information about volumes, units, headcount, inventory levels, and so on. Can also be at a detailed or summary level.
  • Executive. Typically cross-functional information at a summary level.
  • Sustainability. Information relating to environmental, health and safety, and community and social issues.
  • Management or Internal. Includes flash reports. Typically contains information managers need to make business decisions before being transformed for external consumption.
  • Statutory or External. Information that has been transformed according to GAAP or other regulatory standards.
  • Canned. Standard reports that are used over and over again.
  • Ad Hoc. Usually one-time information that’s situational and does not need to be retrieved later— although if found useful across different audiences and at different times can quickly find its way into a canned report.

You can learn more about EPM and how it can help your organization build a common business process to execute its strategy in my book Enterprise Performance Management Done Right: An Operating System for Your Organization (Wiley CIO)

8 Ingredients to Turn Data into Useful Information

9-3-2014 blog image

Data Consumption Is Undergoing a Major Shift

The most common process in the management cycle is Gather. Organizations spend an incredible amount of time gathering data and trying to turn it into meaningful reports, dashboards, scorecards, and spreadsheets. In other words, turning numbers into knowledge.

The purpose of all this activity is to find out where you are performing well and where you need to make some changes. However, with the plethora of data we’re getting, and with the speed at which change happens and transactions occur, it’s getting harder to find out exactly where you stand. How, when, where, and why we consume data is undergoing a major shift.

To turn raw data into useful information that you interact with, you need at least the following ingredients:

  • A purpose or business question to answer (e.g., “What are our sales by region?” or “Who are our top customers?”)
  • A point of view for the consumer of the information (board, corporate, strategic business unit, line of business, division, team, territory, external)
  • Built-in relationships— hierarchies, dimensions including time periods, apples-to-apples like currency translations, and context— year-to-date, actual vs. plan, etc.
  • The right level of detail (according to business questions and consumer)
  • The right metrics— whether it’s a financial account like revenue, or an operational driver like headcount or a key performance indicator (KPI) or a ratio like productivity, it has to fit the business question
  • Timelines— the information has to be delivered be delivered and consumed in time to do something about it
  • Some comparative information— a variance to the plan or to a prior period or a benchmark
  • The right way to deliver the information to the consumer (the right tool and platform)

You can learn more about EPM and how it can help your organization build a common business process to execute its strategy in my book Enterprise Performance Management Done Right: An Operating System for Your Organization (Wiley CIO)

A Management Operating System

I would like to introduce a framework for thinking about Enterprise Performance Management and Business Intelligence. The genesis of this framework came from my days working at Hyperion Solutions (later acquired by Oracle Corp.). It’s been called a management “operating system” for your company because, like the operating system of your computer, it helps govern input and output and manage what applications (or decisions) are being run and helps make the most effective use of resources (memory, disk space, CPU cycles). You can start anywhere on this closed-loop process to tell the management operating system story, and today I’ll share Gather – the most common part of the cycle, with you.

Enterprise Performance Management, A Management Operating System, EPM, Ron Dimon

A Management Operating System

Gather – While you are busy running your business (Execution, which means service customers, making products, selling in markets), you are generating lots of data. You gather that data and transform it into useful information (according to its context) and deliver it to the right people (according to impact and areas of responsibility).

This is the place where managers consume reports about the results of the business. It’s where they answer the question “where are we, right now?” Depending on your industry and your business, there are generally two kinds of reports: mostly financial and mostly operational. The trend has been to combine financial and operational information on one report, which is a good idea since the two are interrelated: financial investments help drive operational results, and effective operations help contribute to financial performance.

Reports are delivered in a variety of formats with a variety of tools and can be categorized as:

  • Canned (static) reports
  • Ad hoc or interactive reports
  • Dashboards and scorecards
  • Spreadsheets

Reports give their readers a snapshot of what results have been produced to date to help them gauge how close to their goals and targets they are.

You can learn more about EPM and how it can help your organization build a common business process to execute its strategy in my book Enterprise Performance Management Done Right: An Operating System for Your Organization (Wiley CIO)

3 Benefits of Using EPM in Your Organization

EPM was designed to fill the strategy to execution gap. It’s the new approach to management that makes strategy everyone’s job, that gives them the tools and processes to execute based on focus, alignment, and accountability. Let’s discuss three of the five benefits of EPM that I share in my book Enterprise Performance Management Done Right: An Operating System for Your Organization (Wiley CIO):

  1. Management Efficiency

    Enterprise Performance Management. Difference between "Run the Business" and "Manage the Businesss"

    Differences between “Run the Business” and “Manage the Business”

EPM enables standard management processes that every company must do well: Budgeting, planning and forecasting Financial consolidation and statutory reporting Management reporting and business intelligence Profitability analysis, and Other financial and operational modeling, planning, analysis, and reporting EPM leverages the investment you have already made in Enterprise Resource Management, Customer Relationship Management, Supply Chain Management, Sales Force Automation, and other transactional systems.

  1. Executing Strategy

EPM can help close the loop between what you want to happen in the business (and how), and what actually happened (and why): Records and documents business model assumptions, constraints, and drivers Connects those models into your annual operating plans, budgets, and forecasts Monitors and alerts exceptional variances from actual to plan Helps you understand the root causes of variance and plug that corporate knowledge Ties it all together with a common business language and common master data to improve visibility, focus, and alignment Giving more stakeholder alignment .

  1. Improving Performance

EPM can have a material impact on the top and bottom line, on the balance sheet, and on overall return on capital: It can improve visibility into the key drivers of value in the business. It can show the cause and effect relationship of operational metrics on financial performance. It helps you focus on the right things in the business. It can bring agility to business models and organizational structures. Giving better business decisions that are based on more timely information

You can learn more about EPM and how it can help your organization build a common business process to execute it’s strategy in my book Enterprise Performance Management Done Right: An Operating System for Your Organization (Wiley CIO)

Top 7 Signs Your Organization Needs Enterprise Performance Management

In working with my clients across a wide spectrum of business sizes, industries, and geographies, when it comes to EPM, there are some “buckets” of pain I have found common to them all. Here Enterprise Performance Managementare 7 reasons your organization needs EPM:

  1. More time is spent on assembling the numbers than on analyzing them— all this manual effort makes us inefficient and not very scalable.
  2. People show up to meetings with “their” numbers, and we don’t know how they got those numbers—there is not a lot of confidence.
  3. Some people aren’t getting the reports or analyses we’re sending out— it either gets lost in their email or the right people aren’t on the distribution list (or they’re ignoring it).
  4. There is little alignment across functions (Sales, Marketing, Development, HR).
  5. People aren’t following the prescribed processes, especially for submitting their plans and forecasts—they make different assumptions and interpret what we want differently.
  6. The right people don’t have access
  7. Sometimes the data is just plain wrong— it doesn’t include the latest numbers or it’s an old version, or it’s missing parts.

You can learn more about EPM and how it can help your organization build a common business process to execute its strategy in my book Enterprise Performance Management Done Right: An Operating System for Your Organization (Wiley CIO)

Modern Management System

A modern management system that promotes fact-based decision making, accountability, transparency, and turns your data into a competitive advantage is supported by the four cornerstones of Enterprise Performance Management – brought together by a robust governance framework, process and set of tools.  This is EPM:

epm

Why are my numbers different than yours?

I had a great chat with @toby_hatch of Oracle on why organizations spend more time arguing about where they got their numbers than what actions to take based on their results.

Here’s Toby’s blog entry.And here’s the interview.

 

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