Reporting problems? not software's fault ... check process.

• Author: Downing, Jason
• Position: Technology

Have you ever wondered why the report you were using looked different than it did last month? Or why your managers down the hall from one another could not agree what their margins were for the quarter? Or why information technology can't produce that new slant on product profitability? If you've asked these types of questions--and blamed the software--take heart: you are not alone.

The problem, indeed, may not be the software. It may be the steps you took to produce the reports. By following a series of relatively simple steps, the process could have been much more fruitful; delivering meaningful information to management, reducing the overall churn (read: time and money) and producing a better stable of reports at the end.

The following four-step program can be used to produce better financial reports:

1. Requirements: Define Your Information Outputs

   Information outputs--or reporting (application) requirements--are business-and operations-driven, not information technology-driven. IT keeps the systems up, but it does not define financial, accounting and operations performance management.

   Many organizations simply do not document or even understand their requirements. This is, in fact, where most firms go wrong: they never establish the foundation for sound reporting design and implementation.

   A health-care organization--after spending multiple years and more than $ 10 million on new technology--was still unhappy with its internal and external reporting; ability to issue guidance to analysts; and capabilities around analyzing the value produced by its assets.

   In a review of the business requirements that drove its process change and applications design, the voluminous documents that appeared had plenty of information about drill down, archiving frequency, database requirements and even the number of concurrent user seats. It had almost nothing about balance sheets, profit-and-loss statements, cash flows, profitability analysis, cost of goods sold, job cost or anything else with an operations or accounting flair!

2. The Data Model: Create a Reporting Information Structure

   Reporting information structures are the building blocks of solid reporting. Without this firm foundation in which business users have helped define how reporting information is organized, reporting will always be exposed to inconsistencies, irrelevancies and inaccuracies--and may not be available in time to use it.

   An area often ignored--or dumped on IT--is design of the...