Curious Case of Financial Consolidation ... A Reader Reacts

I recently wrote about data warehouse architecture and financial consolidation in a blog called "The Curious Case of Financial Consolidation"

A reader reacted:

What are pros and cons of sending both financial and non-financial information from the operational systems to the data warehouse and from there feed the general ledger?
The alternative now is feeding the general ledger directly from the operational systems, and feeding the warehouse with the same information but in more detail at the same time. "Same information at the same time" sounds as bad architectural practice.
What is your opinion?

I don't think there is an architectural issue. In fact, in many respects financial consolidation is a transactional process, and not a management process. In many respects, financial consolidation is not about management information, but about transactional information. A financial consolidation process could/should be managed as unattended and automatic as possible. If you look at it from this point of view, there is no architectural issue. Transactional systems feed each other all the time. The financial consolidation system feeds the data warehouse with consolidated data, and then it becomes management information.

In many cases, things are a bit more complicated. Financial consolidation systems increasingly process non-financial information as well. Sometimes for financial purposes (like some operational/financial performance indicators), sometimes for non-financial purposes (such as other types of external reporting such as sustainability reporting. In those cases the financial consolidation system needs to be fed by the data warehouse.

Also here there are no architectural concerns. It is pretty normal for data warehouse architectures to be closed loop, where the DW feeds the operational systems with integrated information.

Makes sense?

frank

Comments:

Hi Frank, In the readers reaction, the real problem seems to be the understanding of the reader that: 'Same information at the same time" sounds as bad architectural practice'. You don't seem to address that (mis) understanding in your post. From my point of few, this is not a bad architectural practice at all, as long as the interfaces between systems are well-defined, and ideally in a service-oriented way. Happy holiday season! Freddy

Posted by Freddy Holwerda on December 22, 2009 at 06:06 PM PST #

Sure, but common operational errors could be duplicated, so, fixed in both plattaforms. Time/resources expensive..with that architecture >> Frank's response: "Actually, that is the beauty of the architecture as I describe it: if you see it not as duplicate data streams, but as versions (and the consolidated version succeeds the first operational version), the problem you describe actually isn't a problem for this architecture, this architecture is the solution for the problem you describe..."

Posted by Daniel Juvinao on January 19, 2010 at 01:10 AM PST #

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