Business
Ten essentials in corporate reporting
expert's view No reporting process is an island, says platform expert Daniel Ingitaraj. So be prepared to integrate your report system with others in the supply chain. His ten tips inside.
Editor's note: This is the first in a series of three features on corporate reporting. Next week's instalment will profile a detailed corporate reporting scenario.
Corporate Reporting will become increasingly important. A respected book, Building Public Trust: The Future of Corporate Reporting, staunchly advocates that companies should provide investors and other stakeholders a much broader range of information than current financial reporting regulations require.
It also says that these groups will benefit only if companies communicate the information in an integrated fashion that provides a holistic view of the enterprise. This can include marketplace opportunities, strategies, value drivers, and financial outcomes.
Corporate reporting can be as complex or simple as an organization desires. But regardless of how one structures the reporting process, it must be always relevant to an existing environment. Which means it must be rooted in existing technologies and processes, with room to grow.
Easier said than done? That may be so, but these ten tips, by Daniel Ingitaraj, director, developer and platform evangelism of Microsoft Singapore, should help IT managers start on their right foot.
1. Appreciate the importance of reporting
Sounds obvious? But worth repeating nonetheless. And know that corporate reporting will only become more important in future.
2. It's the whole supply chain that counts
The corporate reporting supply chain includes all the groups that participate in the production and consumption of the information and analysis upon which the capital markets rely. Like all supply chains, its effectiveness depends on how well all of the elements work together. Make sure you understand who is part of the supply chain and how information flows through it.
3. Use standards
Look for industry standards as technology enablers for your organization, like the Extensible Business Reporting Language (XBRL) for instance, a promising Internet-based technology for reporting.
One of the great things about XBRL is that it can improve corporate transparency with its ability to tag individual pieces of information with a precise contextual description. XBRL will also improve investor access and dramatically increase the speed at which users can obtain information.
Another benefit of XBRL is quality in depth. Regardless of where one is at in the corporate reporting supply chain, benefits are similar. They include a) higher quality reporting, b) more currency and frequency in information flow and c) more completeness in the data.
4. Corporate reporting is not MIS or LOB reporting
It is more than both (MIS and LOB means management information systems and line-of-business respectively). To define and design their reports systems, developers should ask themselves these five questions:
- How will the information systems help individual managers make better decisions when the problems are non-routine and constantly changing?
- How will the information systems help people working in a group make decisions more efficiently?
- Are there any special systems that can facilitate decision-making among senior managers? Exactly what can these systems do to help high-level management?
- What benefits can systems that support management decision-making provide for the organization as a whole?
- How do I create meaningful reporting and management decision-making processes?
5. Drill down
Good reporting requires sound internal management, clear articulation of a value proposition and reporting on the measures that are most relevant to value creation. It is focused on organization-wide performance. As far as possible, use balance scorecards and key performance indicators (KPIs).
Get to the bottomline of the measures that your reports are supposed to use (and create). Not only must they be relvant, they must be the most relevant measures. If you are unconvinced, cycle back till you are. 6. Make sure you can change and scale
Make your reports flexible and loosely coupled. Over the years it has been discovered that a high percentage of requests for changes are related to printed reports. If we keep the report outside the application, we don't have to recompile anything when you receive a request like ‘move this title to the left’.
Business will grow and new dynamics will come in. Keeping reporting as a separate module outside of your application will allow you scalability and flexibility. Beware: this will introduce deployment challenges. The report runtime environment will have to exist in every user’s desktop and the additional files besides the main executable will have to ship to every user. You will need to strike a balance based on your organizational systems.
7. Centralize management and maintenance
If reporting requirements are centralized with user’s having the flexibility to manipulate the information, manageability becomes easier. If your organization’s requirements are dynamic and flexibility is in great demand, consider a dedicated reporting server. MIS, DSS, ESS can utilize this reporting server for all reporting needs. This will make management and maintenance considerably easier.
8. Different strokes for different folks
Corporate reporting needs to have a scorecard, visualization tools, reporting and analytical tools for different types of users.
Remember the Golden Rule – ’the end user is king’. Many information systems have been failures due to the end user’s needs being ignored. Unfortunately, there is no standard user. Each one is unique in their needs. If you want to have successful implementation of your reports – remember to take the user feedback and provide flexibility and choice of tools. Usability is the key to a reporting system’s success.
9. Work with everybody
The technologies used to build corporate reporting systems must integrate and collaborate with other leading tools for Business Intelligence and Reporting
With changes in US Federal regulations, today’s managers need near real-time reports about their business. Solutions are needed that enable users to access and analyze mission-critical information on demand. Users need to be able to analyze relationships with customers, partners and employees to gain a better understanding of their business.
It is critical to choose experienced partners who understand your business objectives and can access the technology available to realize those objectives.
Do not get locked out and do not get locked in. XML is in, XBRL is promising, and there will be more Internet based technologies that will help integration. Make sure you are on the leading edge.
10. Finally, start small.
If you are only getting started, do not try to implement enterprise wide reporting. Start with a key project that will make users sit and take notice of the power of reporting. Give them a taste.
Some companies running SAP systems have so much data that users have never bothered turning it into useful information. They do not know where to start. Turning data into information can produce a goldmine of valuable insights.
Users will quickly want more information because of the power it gives them in decision making.
K. With more than 12 years' experience in application development, K. Daniel Ingitaraj is the director, developer and platform evangelism at Microsoft Singapore. His most recent undertaking is in the service oriented architecture space.