In today’s environment, decision-making has become more challenging than ever, and the ability to adapt is vital. The availability of real-time digital reports allows management to form strategies and adjust them to meet changing conditions. The foundation of such decisions, however, is the quality of the information produced and published in such reports. It is imperative that reports convey information that can drive the enterprise’s objectives and actions in the right direction.
Compiling a report can be a daunting task, requiring the consideration of many factors before a final report is designed, developed and published. Compared with conventional manual reports, which are generally tied to a specific purpose such as the reporting of inventory, sales or fixed assets for a certain period, digital reporting allows the integration of multiple variables into a kind of digital dashboard, providing stakeholders with a comprehensive view of what is going on in the enterprise (figure 1).
The obvious benefit of this type of digital dashboard is flexibility. In this example, it provides the overall number of incidents in each domain and divides them into critical-, high-, medium- and low-priority categories. This enables stakeholders to understand the magnitude of the problems identified and to allocate appropriate resources to address them. Similar dashboards can be conceived to track division profitability and inventory levels of aging fixed assets, which can address liquidity status.
One of the biggest advantages over manual reports is that digital reports can be linked to an auto-refresh function (figure 2). Such auto-refreshes can be performed in real time, for example, every hour or every day, depending on needs.
There are various factors that go into the development of a digital dashboard. These factors require the involvement and expertise of key personnel across the enterprise, in addition to the development team, which is typical of any management project. This complex development process can best be addressed by a robust governance process to ensure consistency and clarity for everyone involved.
Broadly, governance refers to the initiative to create and enforce a set of rules and policies related to a particular aspect of the enterprise. In an environment where reporting is manual, additional controls are required, primarily to limit access to data, manage how data are maintained and ensure that any changes to existing reports are approved by the appropriate authorities. In a digital reporting framework, these controls are built in, based on preapproved rules, and they can be monitored through a review of logs at predetermined intervals.
Governance clarifies each of the factors involved in developing a digital report (figure 3) and it ensures that all the vital steps are followed. It is also helpful to provide timelines for each step as part of project management.
In addition to governance, stakeholders play an important role in reporting. Stakeholders are groups of individuals representing different functions in an enterprise; they can include people consuming the report to make informed decisions; people affected by the decisions made; and people involved in the process of development, design, training and change management. Relevant stakeholders depend on the nature of the report being developed. For example, a report on vendor statistics would be relevant to stakeholders in the supply chain, procurement and finance.
Data
Data are any raw, unorganized facts that need to be processed. Data are the basis of any report, whether digital or nondigital. However, one of the biggest challenges is determining which data are necessary.
Data Variables
Data availability is not necessarily a challenge, but
collecting the right data can be. Ascertaining which
data variables need to be included in a report can
entail discussions across multiple groups.
Figure 4 provides an example of the amount of data available from a single purchase order—more than 90 field variables. When compiling a report to analyze open purchase orders, not all these data would be relevant.
Data Sources
Enterprises typically generate data in one form or
another throughout the organization. For instance,
data relating to vendors might exist in both the
supply chain procurement system and the finance
system. To create a meaningful report, both types
of data would have to be integrated. For example,
the number of purchase orders placed with vendors
would be available through the procurement system, but the value of invoices paid would come
from the finance system. A report based solely on
either procurement or financial data would provide
decision makers with an incomplete analysis.
Data Modeling
When data are processed, organized, structured or presented in a given context to make them useful, the result is called information. Data modeling refers to this process of structuring data to provide the necessary information for a digital report. Figure 5 provides a good example of data. However, it conveys no meaningful information that could be used for analysis and decision-making.
When the same data are processed (figure 6), various types of information are conveyed:
- Total sales by month
- Comparison of sales by month (e.g., March sales were half of those in January and February)
- Sales by client, by month, by revenue and by product
Such reports allow an analysis of trends and can help decision makers take the necessary action. For example:
- The drop in sales in March can be attributed to United Hospitality.
- Toys continue to be the most popular product.
Data mining (techniques that find patterns in large data sets), data modeling and connecting source data to published data require a standardized approach and constitute an integral part of the governance process.
Presentation
Presenting reports in tabular form is the most common presentation approach, but with many advanced tools, a combination of visuals and data is possible. However, designing this type of report often requires many iterations and can be time-intensive. Figure 7 presents a snapshot of a brainstorming workshop to design and develop a single report to meet various stakeholder requirements.
Figure 8 provides an example of a digital report that blends visuals and data.
Development
Once the preliminary requirements related to data, visuals and parameters have been finalized, development of the report is the next step. The developers who configure the report are not expected to be functional experts in the field to which the report relates; therefore, expected results need to be clearly defined. An agile framework to monitor report development at predefined milestones is recommended so that any necessary corrective action can be taken and delays can be minimized.
User Acceptance Tests (UAT) and Access and Security
One of the earliest opportunities to test the report and gain firsthand feedback is through user acceptance tests (UATs). A successful UAT includes the following elements:
- Appropriate number of testers who are representative of actual users
- Correlation of testers’ profiles with the complexity and sensitivity of the data and the magnitude of the report within the enterprise
- Specific time period for testing to take place
- Use of constructive feedback to add to or amend the report before it is distributed to users
Data and information are central to any enterprise. When a report is created, who will have access to it and how that access will be controlled are important considerations. There may be both internal and external requirements, such as statutory provisions or mandatory fiscal filings. In addition, laws such as the EU General Data Protection Regulation (GDPR) require that data confidentiality be maintained, and an enterprise that fails to do so could face serious financial and reputational damage.
One way to control access to reports and information is to link access to job codes and job areas through identity access management. This is considered the best practice to ensure that access is limited to those with a need to know.
Also, a review of access logs at regular intervals, such as monthly, quarterly or semiannually, depending on the sensitivity of the information, is a common practice to ensure compliance.
Change Management
One of the most difficult challenges can be resistance to change. The magnitude of resistance depends on many factors, and in the case of digital reports, the reasons might include the following:
- Reluctance of current users to use digital reports
- Preference for printed reports rather than digital reports
Considering that the digital reporting system affects individuals across the enterprise, it is vital that all staff members buy in to the new system. Change management workshops may be useful, depending on the nature and complexity of reports. Multiple sessions may be required not only to gain acceptance, but also to ensure that people are comfortable accessing and interpreting reports in digital form.
Deployment and Feedback
Critical elements in the deployment of a digital report include:
- User access list
- Due diligence related to connectivity and configurations
- Regression testing and stress tests on load and performance issues
Once these technical aspects have been handled, it is important to consider the usage frequency and the number of users accessing the report compared with the original user list. This can provide the acceptance ratio and the value added throughout the enterprise.
Finally, formal user feedback, in the form of surveys, should be used to determine how the digital report could be enhanced to add more value.
Conclusion
Certainly, the information contained in digital reports and manual reports should be the same. However, considering the dynamic nature of real-time information, the use of a digital dashboard with multiple key drivers, data integrity through connectivity to source and efficiency through automation can all lead to benefits for an enterprise.
Only a well-defined and robust governance model can aid in the transformation of raw data into information, stimulating action from stakeholders. An effective governance process identifies various factors in the development cycle, defines the process, and determines the roles and responsibilities of various people. Enterprises with flexible governance processes will be able to adapt not only to a changing external environment, but also to new technological developments.
Rajul Kambli, CISA, CMA
Is a business insight manager with Schlumberger and has more than 17 years of experience in global accounting, planning, budgeting project management, and financial and systems audit. Currently, he is managing a digital reporting initiative. Prior to this, he had been part of the global transformation team, conducting review and gap analysis, optimization, process improvements, and readiness assessment to deploy SAP. He has also served as finance controller for various verticals—driving compliance, liquidity generation and advising on effective cost management to business partners.