Transcript PowerPoint Template

Bolstering the Finance Foundations for BPM –
It’s About Data Integration
Theresa Clark – VP, Finance Transformation
April 2005
Overview
• Defining BPM
• Starting with Finance
– Why Finance?
– Finance Data Integration Issues
– The Current Architecture
– The History of Finance Data
• How to Proceed
– Moving Ahead
– Suggested Architecture
– The Effort Required
– Compliance is Next
– The Data Test
• Making BPM a Reality
The Definition of BPM –
Starting on the Same Page
The goal of business performance management is to
optimize a company’s ability to execute against its
strategies and measure the business.
• BPM is a methodology not a technology
• Includes all processes, methods and supporting
technologies
• The analytics are inclusive of all critical business
information — operational and financial
• The processes are integrated and closed loop from
planning through monitoring
Stating the Obvious — Data Integrity Is
Key to Performance Measurement
Obviously, having the correct data for BPM is paramount
“As with any style of business intelligence, poor data
quality can lead to misguided decision making.
CPM, with its critical role in compliance and support
of strategic business processes, demands a strong
focus on data quality.”
– Gartner,
T. Friedman 2004
Unfortunately, this is much harder than it should be
A Starting Point —
BPM Starting with Finance Data
• There is a talk of ‘finance-centric’ focus of BPM. The need to
ensure that there is a closed loop from the operational
metrics to planning.
“To have a BPM suite, the solution should include financial BPM
(e.g. financial reporting, consolidations, business planning) as its
central application, with the ability to build out BPM components
for CRM, SRM and other applications.”
– META Group,
January 2005
Why Finance?
Finance should be at the core of BPM on all fronts
•
•
•
•
Finance data constantly undergoes audit scrutiny
Finance data is pervasive in key metrics
Finance personnel have the analytical skill sets and
Finance understands the business processes
BUT…
There are Integration Issues in the Finance Data
With a 1% of revenue budget and constantly increasing
demands, the finance architecture has become somewhat
of a morass:
• Legacy data too delicate and time consuming to integrate
• ERP systems put in piece parts or “vanilla”
• Data marts and special apps provided to solve individual
needs
• Warehouses built and modeled over long periods of time and
difficult to maintain
• Excel® is a central BI tool
• BI of every flavor to suit multiple end user needs
• IT departments requiring specialists to maintain each layer
The Resulting Current State Architecture
Multiple
Source
Systems
Multiple/
Custom
ETL
Multiple
Custom
Data Marts
Multiple
Intelligence
Large
Tools
Analyst Staff
Disparate
Reports
Dependent
End-users and
Decision Makers
ERP
!?!
ERP
Reporting
Operational
Other
BI
Tools
Legacy
Third
Party
Legacy
Tools
Flat
Files
OLTP Systems
Data
Management
Enterprise Analytics
Looking Back Before Forging Ahead —
20 Years of Finance Data in Short
1985
The Environment
Quick
1995
2005
Fast
Turbo
The Request
Data and facts –
Yes please.
May I have some?
Ugh. Data overload.
Can you boil this down
please?
Nice report. Where is it
from? Is it correct?
Prove it, please.
The Activity
• Reports: Massive
volumes of pieces of data
• Effort: Compiled by lots
of people around the
globe
• Systems: Legacy,
Lotus®, flat file databases
• Reports: Data dumps from
ERP and systems – ugly
• Effort: Lots of data in,
Pivot table lives, Excel®
Lots of tired people.
• Systems: ERPs going in,
budgeting, consolidation
• Reports: Looking good
• Effort: BI gurus producing
information and plenty of
Excel® jockeys, Fewer
people but tired ones
• Systems: ERPs in place ,
BI tools galore, data marts
The Result
• Siloed reports on specific
information
• Costly information
• Highly subject to errors
• Speedier data
• Disappointment with
information
• Seeking common terms
• Handsome reports
• Data integration and
accuracy issues revealed
• Planning is paramount
How Do We Move Ahead?
• We learn from our history and experience
– ERPs don’t have all the data and are a bit stubborn about
sharing their data
– A warehouse is the way to make diverse data sources come
together
– Less is more with tools
®
– Excel may actually get a Nobel Prize, but it does not solve all
analytics issues
– Data integration matters
• We take this moment of opportunity where Finance is a
focus and BPM is a must to shore up the underlying
technology layers
Make Certain to Revisit the Data Foundations
Clarity
Taxonomy
Well
Defined
CoA
Defined
Hierarchies
ERP
Operational
Clear
Securities
Allocations
Other
Level of
Granularity
Legacy
Flat
Files
The Better Place to Be
Multiple
Source
Systems
Standard
Sourcing
Company-wide
Data Warehouse
Dashboards,
Metrics,
and Alerts
Independent
End-users and
Decision Makers
ERP
Operational
Other
Legacy
Unified
Finance-centric
Data
BI
Third
Party
Flat
Files
OLTP Systems
Data Management
Enterprise Analytics
It May “Pinch A Bit”
• What needs to be adjusted will vary by enterprise
– The age of the technologies, the timing of implementations, the
pace of acquisitions…
The Level of Effort Will Vary By Enterprise
Tune
Review ERP capabilities
Turn on functions
Reset parameters
Low
Implement workflow
Automate excel
Tune the warehouse
Restructure the CofA
Implement a warehouse
Reimplement securities
Effort Requirement
These are only some examples of possible changes
Overhaul
Implement/Change ERP
Convert legacy to new
Replace built with new
High
And Next Comes Compliance
• The focus on controls, data integrity and corporate
governance is a matter of evolution not just a harsh
government reaction in the US
• In a global economy, a set of rules of play at the internal
controls level has always made sense. Shades of IFRS
• Attempted avoidance of an internal controls scrubbing
appears a bit weak
• Many countries and industries have begun to require a focus
on governance and controls as a matter of sound corporate
citizenship – UK’s Combined Code, Basel II, Germany’s
Cromme Code etc.
The Test of the Finance Data Looks Like This
• Accounting is
appropriately applied
• Accounting is correct
• Calculations are correct
• Transaction was
approved
• Transaction is legitimate
• Transactions are secure
• Access is appropriate
• Details tie to totals
• Data is secure
• Data access is restricted and
segregated
• Calculations are accurate
and auditable
• Data ties to source
• Consolidation/compilation
accurate
ERP
A
ERP
B
Legacy
Systems
Flat
Files
• Reported according to
GAAP requirements
• Reported in correct
category
• Reported in correct
period
• Auditable
Reported
Financials
Data
BI
Financial
Analytics
Making BPM A Reality – It’s in the Data
Enterprise Wide BPM is Now Attainable
• Start Your BPM Initiative with Finance
• Find the Means to Integrate Your Data
Now
– Look at tools that can enable
analytics while you are transitioning
data to the goal state
• Look at your Architecture in Light of
BPM
– You need a warehouse that can do
cross-functional analytics
– You need ready access to your most
current data
– You need to your data to be
auditable to the source
Measure
Adjust
Monitor
Learn
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