CXO whitepaper Generic Business Tools

Why generic business intelligence tools are failing today’s CFOs It’s time to put Finance back in control

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Executive summary Today’s complex and data-heavy business landscape asks more of the Finance function than ever before.

CFOs and their support staff are increasingly expected to act as central players in improving company performance, making critical investment decisions and aligning corporate objectives.

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When “one-size-fits-all” doesn’t cut it However, the Finance function often finds itself ill-equipped to fulfill this new remit. More often than not, the department finds itself the victim of a corporate ‘one-size-fits-all’ policy whereby staff are forced to work with generic Business Intelligence (BI) tools. Designed to serve a broad range of functions throughout the organization, these tools rarely offer the financial intelligence and capabilities that the Finance office truly needs. It’s little wonder that today’s CFOs often struggle to meet the demands made of them by the C-Suite, and to really add value to their organization.

In this whitepaper, we examine why generic BI tools are failing the Finance function, and explore some of the alternative approaches available.

1 Gartner FEI CFO Technology Study: CFO’s Top Imperatives

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© 2018 - Specialized financial reporting tools are key to succes

“59% of CFOs identify supporting analysis and decision-making as the top business processes that need investment.” 1

The limitations of generic BI tools To be sure, BI tools have come a long way since Microsoft lauhced its first Excel spreadsheet software in the mid-1980s, and today’s organizations can make use of a broad range of solutions.

However, while providing a number of powerful features, these tools rarely offer the specific level of support required by 21st century Finance departments.

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Examining the drawbacks of generic BI tools In trying to be all things to all people, generic BI tools are failing to meet the specific and broad needs of the CFO and Finance teams. And without the right tools, the Finance function will struggle make the step up to becoming a driver of strategic change. The main drawbacks of generic BI tools include: 1. Poor Finance functionality Most generic BI tools lack real understanding of financial processes. As such, many of these solutions are poorly equipped to support even the most basic elements of financial reporting and data management. Without the technology in place to automate and optimize workflows, a disproportionate amount of employee talent is still being used up on the most basic day-to-day elements of financial reporting processes. Tools like Excel are simply not equipped to handle vast amounts of complex financial and non-financial data flowing in from different sources.

A lack of explicit data quality checks, unclear spreadsheet ownership and muddled KPI definitions are a recipe for disaster. Indeed, most CFOs and Finance teams will recognize that, frequently, more time is spent arguing over whether the numbers are correct or not, than working to act on that data.

“88% of all Excel files contain one or more formula errors.�

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2 Journal of End User Computing: What We Know About Spreadsheet Errors

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Š 2018 - Specialized financial reporting tools are key to succes

The same is true of data maintenance, which, despite being one of the more basic Finance tasks, is often one of the biggest consumers of employee time.

Maintaining accurate data can cost organizations anywhere between 10 and 100 days per month, depending on how decentralized their use of spreadsheets is.

2. Fragmented workflows The lack of a centralized, Finance-specific reporting solutions means Finance staff often have to employ multiple tools and solutions to get the job done. For example, tools that offer excellent analysis and attractive online graphical reporting usually lack high-quality printing capabilities and vice versa. Moreover, by working with Enterprise Data Warehouse systems operating on the basis of nightly batches, they are usually unable to provide essential immediate insight into the financial consequences of changes made at month/year closing.

3. Poor EMP source system compatability Another key drawback of generic BI tools is their limited compatability with an increasingly broad range of Enterprise Performance Management (EPM) source systems now in use. When financial data is stored in an Enterprise Data Warehouse, it is effectively owned by the IT department and not by Finance.

And, as IT has to serve the whole company, the design of the Enterprise Data Warehouse is usually unable to meet the bespoke requirements of the Finance function.

With generic BI tools, providing reporting teams with multi-dimensional data is often a cumbersome, labor-intensive process. It involves convoluted distributed data exports and manual manipulations. And it leaves Finance staff relying on IT departments to feed in the various input data they need to get the job done.

“The Finance department needs to be in charge of financial reporting.�

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4. Lack of control equals risk An increasingly complex and fluid regulatory landscape means that, more than ever, today’s Finance teams need to be able to react swifty to changes in the external environment. Reporting standards are constantly changing, investors and the governmental bodies require ever-more standardized financial information.

The requirements of Sarbanes-Oxley, IFRS and XBRL have significantly raised the standards for transparency and accuracy, not to mention the price of compliance failure.

The simple fact that any consequent Finance-driven change requests take three months to implement means companies are being exposed to a high level of avoidable risk. One of the first questions Finance managers must ask themselves is: will all the consolidation rules be inherited from the financial source system?

And, if not, how will IT implement the rule changes?

From the moment the decision is reached to implement an Enterprise Data Warehouse and BI reporting tool, it can take up to a year to get it up and running. The result? A long wait and a lot of money spent on consultants and IT, and on interim tools that are never really good enough. And only then do most Finance departments discover that the implemented reporting tool – chosen as the standard to serve the whole company – fails to meet their specific needs. Nor those of the CEO and Management Board.

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© 2018 - Specialized financial reporting tools are key to succes

5. The hidden cost of implementation Faced with ever-tightening budgets and cost accountability, organizations can be forgiven for reaching out for the most accessible and universally-applicable solution available. However, while generic BI tools often lead to a low cash-out, these solutions contain a number of hidden costs, one of which is the cost and time involved in implementation.

Why Finance BI tools offer more As a CFO or Finance professional, it’s time to ask yourself whether the obvious limitations of generic BI tooling are acceptable to your organization.

If the answer is “no”, then it may be time to switch to a specialized, purpose-built financial reporting solution.

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Time for a bespoke financial reporting solution Abandoning generic BI solutions involves a willingness to move out of the Excel comfort zone, and to find a smarter and more flexible way of working. The answer to these problems may be a specialized financial reporting solution. Instead of being the product of generalist business intelligence experts or smart programmers, these purpose-built systems have been explicitly designed to meet the demands and regulatory challenges facing today’s Finance teams.

Built by Finance professionals, they are designed to handle specific Finance problems, such as the roll-up of numbers to the Mother Company and the elimination of inter-company payments. They allow the rules set and implemented within an organization’s financial system to be re-applied – flexibly – in its own reporting environment. What’s more, they ensure data is available to end-users whenever and wherever they require it (i.e. multi-output, multi-device).

Financial BI

Generic BI

Dynamic Dashboards

Y

Y

Analyzing Capabilities

Y

Limited

Customizable Reports

Y (By Finance)

Y (By IT)

Multi Source Support

Y

Y

Direct Data Connectivity

Y

Limited

Retained Data Hierarchies

Y

N

Supports Reporting Process

Y

N

Financial Reporting Templates

Y

N

Narrative and Commentary

Y

Limited

Report Formatting

Y

N

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© 2018 - Specialized financial reporting tools are key to succes

Finance versus Generic BI functionality

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“With CXO Software, we have a single reporting environment for our entire EPM database. It has eliminated our heavy maintenance burden with the native EPM reporting tools. At the same time, CXO delivers our crucial EPM information much quicker and in a more intuitive fashion to the Management Board.

Taking back control More importantly, these specialized tools are not trying to be a ‘bit of everything’ to all people, but have as their main purpose serving Finance, with the ability to combine Finance data from financial source systems with data from the Enterprise Data Warehouse. As such, the Finance department maintains ownership over critical financial information, along with the required flexibility and fast data feed, without losing the benefits of combining this with IT-owner data from the rest of the company.

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© 2018 - Specialized financial reporting tools are key to succes

Due to the very tight integration with EPM, our reporting process is fully automated. This makes it much quicker and removes the potential for manual errors. Furthermore, the delivery of our EPM data via the iPad has been of huge benefit to our CEO. All the valuable information he needs is now at his fingertips, greatly helping him in his decision-making process.”

Conclusion The very basis of technology is to remove or complement manual work processes.

But when it comes to financial reporting, the tools available are often more of a hindrance than a solution.

As the pressures placed on them intensify, today’s Finance teams require technology and solutions that are designed to meet their basic needs and perform the basic duties required of them. In most reporting scenarios, this means staff having visibility on month-end changes in minutes, and access to the data they need, when they need it.

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Putting Finance first Ideally, the tools and technologies used in financial reporting should have been designed with the Finance team in mind, by someone who understands the work Finance staff do and with a grasp of performance reporting and financial processes. Reporting teams should have full control over their own workflow and over the technology that supports this - without having to rely on other departments or external consultants.

The good news is that these solutions are out there, and can be up and running in a matter of days.

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Š 2018 - Specialized financial reporting tools are key to succes

Contact CXO Softw today to find out more about what we can offer your organization. Together, let’s put Finance back in control.

About CXO Software CXO Software is an independent provider of financial and performance reporting platforms. Established in 2007, our unique approach to financial reporting was born out of a growing frustration with time-consuming and error-prone Excel-driven processes; the low ‘financial intelligence’ of generic BI tools; and, most importantly, the lack of time made available during reporting cycles for added-value analysis and insight.

As the challenges and demands on the Finance office grow and intensify, it’s time for organizations to dispense with spreadsheets and low-intelligence performance reporting processes in favor of smarter, sophisticated, purpose-built solutions.

CXO’s financial and performance dashboards offer in-depth actionable insights – to enhance the work of end-users as well as C-level executives.

For further Information: www.cxo-cockpit.com - www.cxo-cockpit.com/live-demo/

Contact Europe CXO Software B.V. Herculesplein 48 NL 3584 AA Utrecht The Netherlands Phone: (+31) 85 043 2265 info@cxo-cockpit.com For more information, please visit: ​www.cxo-cockpit.com​

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North America CXO Software USA Inc.​ 11097 Houze Rd 250 Roswell, GA 30076 USA info@cxo-cockpit.com