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Bolstering the Finance Foundations for BPM – It’s About Data Integration Theresa Clark – VP, Finance Transformation April 2005.

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Presentation on theme: "Bolstering the Finance Foundations for BPM – It’s About Data Integration Theresa Clark – VP, Finance Transformation April 2005."— Presentation transcript:

1 Bolstering the Finance Foundations for BPM – It’s About Data Integration Theresa Clark – VP, Finance Transformation April 2005

2 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

3 The Definition of BPM – Starting on the Same Page 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 The goal of business performance management is to optimize a company’s ability to execute against its strategies and measure the business.

4 Stating the Obvious — Data Integrity Is Key to Performance Measurement Obviously, having the correct data for BPM is paramount Unfortunately, this is much harder than it should be “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

5 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

6 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…

7 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

8 BI Tools ERP Reporting Legacy Tools Multiple Intelligence Tools Large Analyst Staff !?!!?! The Resulting Current State Architecture Multiple/ Custom ETL Disparate Reports Dependent End-users and Decision Makers OLTP Systems Data Management Enterprise Analytics Multiple Custom Data Marts Multiple Source Systems ERP Operational Other Legacy Third Party Flat Files

9 Handsome reports Data integration and accuracy issues revealed Planning is paramount Looking Back Before Forging Ahead — 20 Years of Finance Data in Short 198519952005 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 Siloed reports on specific information Costly information Highly subject to errors Speedier data Disappointment with information Seeking common terms 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 Request The Activity The Result The Environment QuickFastTurbo

10 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

11 Make Certain to Revisit the Data Foundations Defined Hierarchies Allocations Level of Granularity Clear Securities Well Defined CoA ERP Operational Other Legacy Flat Files Taxonomy Clarity

12 The Better Place to Be Standard Sourcing Independent End-users and Decision Makers OLTP SystemsEnterprise Analytics Multiple Source Systems ERP Operational Other Legacy Third Party Flat Files Company-wide Data Warehouse Unified Finance-centric Data Dashboards, Metrics, and Alerts BI Data Management

13 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… Tune Overhaul Review ERP capabilities Turn on functions Reset parameters Implement workflow Automate excel Tune the warehouse Restructure the CofA Implement a warehouse Reimplement securities Implement/Change ERP Convert legacy to new Replace built with new LowHigh The Level of Effort Will Vary By Enterprise Effort Requirement These are only some examples of possible changes

14 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.

15 Reported according to GAAP requirements Reported in correct category Reported in correct period Auditable 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 Accounting is appropriately applied Accounting is correct Calculations are correct Transaction was approved Transaction is legitimate Transactions are secure Access is appropriate The Test of the Finance Data Looks Like This Reported Financials Financial Analytics ERP B Legacy Systems Flat Files ERP A BI Data

16 Making BPM A Reality – It’s in the Data 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 Learn AdjustMonitor Enterprise Wide BPM is Now Attainable

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