Financial Consolidation: A pre-requisite for BI Tools Deployment

Today's enterprises do not have a simple structure with multiple business entities at multiple geographies, large number of joint vetures, subsidiaries, acquisitions, de mergers etc. and all this is adding to complexities of financial reporting. Add to this, different currencies, legal requirements, ever changing leadership formats of reporting and you have a substantial challenge in front of you. 

A typical structure of a large transnational organization will have parent organization with multiple subsidiaries and some of these subsidiaries would have acquired few other companies which might have their own subsidiaries in few countries. Then there will be different business lines or verticals which operate independently or have joint ventures. Now, consolidating the financial data from all these entities is a challange and most of the time your transactional system or ERP will not be able to help in this specially if more than one system is being used in these entities. Another important point is that the business intelligence tools will also not be able to help in giving the correct information as data is available in piece meal and the real picture is not captured.

While deploying a business intelligence solution, it is imperative that our data is first consolidated with the help of either a financial consolidation tool or the module of the Enterprise Performance Management tool you have deployed. The major benefits of data consolidation will be:

• Get a single source of truth: These Provide a single version of the truth to support financial management and statutory reporting
• Accelerate reporting cycles: Substantially reduce the period closing cycles and deliver more timely results to internal and external stakeholders across the globe
• Improve transparency and compliance: Helps reduce the cost of compliance (as stipulated by the Sarbanes-Oxley Act, IFRS, electronic filing, and other regulatory requirements) and support disclosure requirements, such as sustainability reporting
• Perform strategic analysis: You will spend less time on processing and more time on value-added analysis

Deployment of Business Intelligence tool will be much easier and highly useful if it is done after financial consolidation exercise and will help you in getting expected results. (Yes, the scope of this article is only financial business intelligence and not includes supply chain intelligence etc.). The benefits that you can reap after deploying your BI tool can be:

• Aigning the enterprise with its KPIs
• Assist leadership take faster and fact based decisions
• Simulation of scenarios and doing what if analysis
• Allocation and re-allocation of costs and overheads across entities without distrubing the transactional system entries
• No need to look at multiple sources of data

All above can be reaped in a much better way of we consoildate the financial data first and then utilize the BI tool to provide the required dashboards and reports.

Tip: Use ERP and Business Intelligence to retain your customers

Running a business without consistently adding new customers is like a non performing employee who does not get further increments every year and is satisfied with the current level of salary. Sooner or later, that employee will get fired and the current salary will also become history. Similar fate will happen with the organization which is not focused on adding new customers as it directly implies that all is not well and slowly the existing customer base will also start eroding by moving towards competition. Even the vice versa is true, which means that if you are not able to retain your existing customers by a good margin (I know “good” has different meaning in different industries, but let us not go there) then getting new customers will also become a challenge especially in those industries where references play a major role.

I will focus on usage of ERP and Business Intelligence in retaining your customers instead of ways to get new customers and I am driven by the fact that every organization will do its best to increase the satisfaction level of their customers if they know that customers have this issue and as long as it is not hard hitting their balance-sheet. If, as a customer strategy leader I want to know that what is my on-time delivery rates for customers in Alaska or how much time did my organization took to resolve customer complaints for a digital device product, and my staff is taking its own time to dig this information, then it is high time that I start looking at this aspect now. It is ripe time now (rather you are late) to implement a 360 degrees view of your customers and start not only measuring but also have those measurements available real-time so that quick decisions can be made. Also, this will save the staff time in regularly digging information about customers and utilize that time in some other more value added work. This all can be achieved with the help of you existing ERP and BI system and a dashboard can be designed to show critical metrics for our organization. Most BI systems are very strong to deliver required data at our screens and the need to be configured to maximize the value of all data sources and achieve a better flexibility and customer responsiveness. We must combine strategic actions and new technology to:

• Integrate all your data source systems and bring them into a single dashboard
• Identify the customers that are “at risk” and put a process in place to do this regularly
• Enable customer support infrastructure to drill down to lowest transactional level details
• Proactively inform sales and service managers about potential issues in delivering a product or service
• Provide customer history on regular basis

In addition of helping us in maintaining customer satisfaction, lot of awkward situations can also be avoided by taking above actions. For example, take a case when a sales representative called an existing customer for renewing a soon to be expiring contract and as soon the formalities of renewing the contract were finalized, it was communicated from the credit department that the customer’s account has been sent to an external agency to collect payments due to long delinquency. If a 360 degrees view is available to staff, these mistakes can be avaoided.

Follow a simple rule that if we spend less time in digging information and spend more time in actually resolving the customer issues and even potential issues in near future, we will be more likely to retain/grow our existing customers, bring new customers and finally grow/expand our business.

SCM Strategy: Use Supply Chain Intelligence to improve operations

With global supply chains involving more suppliers, customers and intermediaries today than ever before, managing supply chain-wide information and knowledge effectively is becoming critical to business success.

If we need to improve the performance of supply chain, then first of all, we need to know where exactly we lack. World over, customers are getting more and more demanding and they now need faster and accurate fulfillment. To add to this, the demand is changing fast and organizations need to add capability to become flexible in responding to demand changes. On top of this, supply chain is increasingly becoming more and more complex due to globalization and there are much more KPIs coming into picture, to be controlled and improved so that the overall supply chain performance is improved.

Supply Chain Intelligence or Business Intelligence  for Supply Chain operations takes different forms and can be either operations focused (tactical)...