Reports are an essential method of getting business information to the people who need to make decisions for the business.

It’s this business information that will indicate whether a decision and/or action is required or not, whether something is going wrong or not and the timing of the decision. This principle applies whether the information is financial, legal and operational, a workflow trigger to-do, or a text message alert.

While many reports are historic, others, such as budgets, forecasts and activity plans are forward looking, and can enable proactive rather than reactive decision making.

Measure what’s important
Key Performance Indicators (KPIs) are financial and non-financial metrics used to help an organisation define and measure progress toward organisational goals.

KPIs are derived from the company’s strategy and may be broken down into many subsidiary KPIs according to the business or functional structure and the level of decision required. To be useful, reports need to clearly support one or more KPIs and if they don’t then either the KPIs or the reports’ relevance need to be questioned. Similarly, a KPI without any reports should raise suspicion.

A KPI will usually reveal conditions or performance that is outside the norm, signalling a need for managerial intervention. A KPI can be quantitative or qualitative, objective or subjective. Preferably KPIs should be quantitative, unambiguous, and reliable.

Astute businesses take a holistic approach to reporting. They consider reporting in its entirety and develop a reporting framework on a ‘basket’ of measures. They approach reporting proactively, for example: “We understand our business and what drives successful outcomes. We measure and manage these drivers”. Operational reports will inevitably have more detail, while remaining aligned with the main reporting strategy and KPIs.

Empower the people
Businesses often latch on to this concept under another guise e.g. delegated authorities, decentralised control, performance systems or goal setting, but often fail to implement adequate information systems that support the delegation, monitoring and control processes. Even in the most tightly controlled and centralised business model, information needs to be distributed and acted upon. At its base level, reports need to be delivered to the people that can act on the information that it conveys.

Management needs an overarching view to approve or monitor the impact of these decisions, with drill-down to detail where necessary. Consideration needs to be given to the ability of employees to absorb and interpret information and turn it into useful action. Are they suitably trained to make best use of the information presented? Are they accountable and do they have authority to make the necessary decisions?

Are all the people at each level of your business getting all the information they need to make the decisions they’re empowered to make? If not, what is the ongoing cost to your business?

The answers to these questions will determine whether reports need to be created, modified, culled, or redirected — and whether decision-making powers need to be shifted up, down or around. For example, a new report on goods-in-transit might not be useful until someone has responsibility for goods between stock locations.

Cater for individual needs
Reports aren’t necessarily words on paper, and the presentation format will depend on who they’re presented to, for example:

• a detailed maintenance schedule for an aircraft maintenance manager,
• a formatted report for a junior sales clerk that can be easily ticked and annotated,
• secure online account information for a bank customer to view in private,
• a warning light for a line worker.

Generally, the higher the managerial level, the more summarised the report. However, a good financial or operational system can present summary reports online with the ability for the user to drill down through the data to investigate particular areas of interest, thus a single report can be used by several users, who can each zero in on the information they want. This means the initial report can be very concise, but with the underlying data readily to hand.

Information requirements change over time and best practice requires a continuous cycle of review and improvement. Few reports are completely useful year after year, and so ease/cost of modification may also be a factor when creating reports. As your business changes and grows, your surrounding information needs will also change. Maybe a skeleton report would be more useful than many specific reports so people can adapt it to their own needs.

Enabling technologies
The quality and completeness of the underlying business systems and database will often dictate the quality and completeness of the reports that can be produced.

Building extensive reporting systems on shaky foundations can result in time consuming, inefficient and error prone administration and reporting processes. This is not good practice and in the medium to long term is unsustainable.

There is a plethora of reporting tools available, therefore we need to select the right tool for the job. In some respects and with a stretch of the imagination, reporting tools share a lot in common with a set of golf clubs. The tool you use could be equated with one of the many clubs you could choose out of the bag to play any given shot. Any golf player will tell you that having a whole set of mismatched clubs will regularly lead to a poor result; the same is true for reporting tools. Having tools that work from like technologies and platforms will facilitate the process tremendously. Nevertheless, many bags will have a club which is not from the same suite – to call on for specific tasks.

Some general considerations with designing or evaluating your information systems and reporting tools:

• Open and integrated information systems and database – Ideally all your business systems should be integrated in one application, platform or database. Data should be electronically captured at source and there should be no re-keying of information. This complete and accurate data store should be the base of all reporting, ensuring one version of the truth.
• Secure and scalable – The underlying technology needs to be flexible and have the ability to grow with your business. Security and control of data and information is of paramount concern.
• Cost effective data capture – Options can enable electronic capture of information at source rather than manually re-keying e.g. Bar code readers, electronic data interfaces etc. This creates efficiencies, reduces errors and widens the depth of detail available for reporting.
• Good reporting tools – Can make building reports much quicker and easier, or even give the report users the ability to create their own. It’s worth considering whether personalised reports give a better feel for information than standard offerings, or whether time spent creating individual reports might be better spent actually taking action in the business.
• Spreadsheets – Enable financial data to be manipulated in a number of ways to get new insights into the business. They should be dynamically linked to source data in the underlying information system and have the ability to summarise financial data as well as drill back into transactional detail. Spreadsheets are the preferred reporting environment by accountants and if effectively used can be a powerful tool. Often spreadsheets are misused due to the inadequacy of the underlying system or due to no better reporting options being available.
• End to end business process – Modern businesses have extended the boundary of the information and data they want captured eg. sales quotes and communication exchanged during sales process, customers processing orders and projected demand directly into your system. Your information systems should support your desired end to end business processes, which may demand additional functionality plus support for automated workflows and strong security. Modern information systems will automate business and business processing compared with older legacy systems which merely automate tasks.
• Soft measures – It’s becoming commonplace for businesses to measure non transactional data eg. sales hit rate, customer satisfaction and service level performance. This places pressure on inflexible or legacy systems to cater for this requirement, resulting in time consuming and error-ridden manual processes. A flexible and modern information system should be able to cater for the data collation and reporting of all required information.
• Forecasting and projections – Reporting tools and applications are available that assist the business to predict future events rather than merely report history. Examples include sales projections, cash flow forecasts, purchasing requirements, production planning.
• Business intelligence – B.I, tools make it possible to merge a lot more data and analyse it in more depth without overloading the user. Bl tools are good at identifying anomalies or trends that might otherwise have been missed.
• Report distribution – Such tools allow the efficient and timely distribution of reports. They can cater for both push reporting and refresher information from a self help online reporting environment.

The underlying technologies should always be subservient to the overriding strategy, desired business processes and information needs of your business and users.

Summary
To obtain the best value from your business reports and information systems, you need to:

• measure what’s important, question the assumptions,
• put information in the hands of the people who can make best use of it, and give them the authority to make decisions based on that information,
• cater for individual users’ requirements and provide them with information that is timely and presented appropriately build strong information systems to support your overriding strategy and business information requirements,
• train and empower your people,
• pick the right reporting tools for the job,
• keep questioning, optimise reports and processes as the business or environment changes; and
• follow a structured process in implementing change to ensure successful delivery of the outcomes sought.

Ultimately the decision to proceed with improved information and reporting systems will be based on the perceived benefits that will accrue versus cost of change. For the ‘status quo’ no-change option, evaluate the cost of not having the information; how the business will be affected and consider the cost of inefficiency or poor decision making due to key information not being available.

For more information
This feature was abridged from a white paper prepared by Enabling, a professional services organisation recognised as a leader in the provision and support of business management applications throughout New Zealand and Australia.

Enabling
www.enabling.net
Ph 0800 ENABLING

8/6/7_ex_nl_h