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When Management Reporting is Your Navigation

Mitch Campbell

Everyone has a different definition of what "reporting" means to their organization.  What content matters is determined by the audience and their expectations.  Some want operational reporting, others financial, others "real time" reporting, and still others management reporting.  Well, it's all just reporting, right?  No, not at all. 

Management Reporting is all about bringing together multiple data sources and extending the analysis with richer detail to determine the best possible outcomes while navigating your business.  By navigation we mean that a company can change course and know what the most likely possible outcome will be because of Management Reporting. The best system for this type of reporting is multi-dimensional, like Oracle Essbase.  And knowing that... is what differentiates successful financial organizations from their peers.  So what do I mean?  Let me break it down a bit:

Management Reporting:

  • Is a process for analyzing performance measures and variances
  • Combines financial and operational data: multiple sources with different levels of detail
  • Combines budgeting systems and operational systems
  • Extends to additional levels of detail, and provides regular hierarchy dimensions and alternate hierarchies for different reporting needs
  • Allows users to run "what-if" scenarios modeling for forecasts and trend analysis

You can see that it is much more than canned or real-time reports from a single system.  Most analytic platforms fail to provide the ability to do true management reporting given all of these requirements.  Planning systems clearly do "what if" for iterations of budgeting versions, but are at a summarized level of detail, they aren't rich enough.  Operational analysis does a great detail for "what happened." By contrast, "what if" financial reporting is very static and formatted, without the ability to do ad-hoc analysis.  Real time reporting can be very detailed but can't take into account trends, projections, year over year comparisons.   Check out this diagram:

As I said earlier, each reporting style meets a different need, and each in and of themselves is not a complete solution.  Which brings us back to the value of Management Reporting.  Variance analysis comparisons are truly "how are we doing?" comparisons.  What do we need to change or improve?  They are essential to run the business. Navigating changes and understanding immediate effects of those changes can separate success from failure. 

A successful analytics platform is critical as we see the role of Finance changing.  People in Finance are doing more, and they are looking to work smarter, faster, and need to analyze richer data sets than ever before.  Management Reporting is one of the key processes that truly brings value to them and their organization as they strive to modernize and improve into the future, navigating and charting a course for success.

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