You are currently browsing the category archive for the ‘Information Applications (IA)’ category.

vr_infomgt_obstacles_to_information_management_updatedWhen applying information technology to drive better business performance, companies and the systems integrators that assist them often underestimate the importance of organizing data management around processes. For example, companies that do not execute their quote-to-cash cycle as an end-to-end process often experience a related set of issues in their sales, marketing, operations, accounting and finance functions that stem from entering the same data into multiple systems. The inability to automate passing of data from one functional group to the next forces people to spend time re-entering data and leads to fragmented and disconnected data stores. The absence of a single authoritative data source also creates conflicts about whose numbers are “right.” Even when the actual figures recorded are identical, discrepancies can crop up because of issues in synchronization and data definition. Lacking an authoritative source, organizations may need to check for and resolve errors and inconsistencies between systems to ensure, for example, that what customers purchased was what they received and were billed for. The negative impact of this lack of automation is multiplied when transactions are complex or involve contracts for recurring services.

Our benchmark research shows that data fragmentation, consistency, availability, usability and timeliness are key issues for companies.  The information management issues in process design and execution are similar to those at work for analytics.   However, addressing them effectively requires a different approach than just creating a separate data store to be the “single version of the truth.” Careful consideration is required to determine the best method to manage data throughout a core business process, particularly when multiple applications are required to automate and support the execution of the process. Software application platforms offered by some vendors make it far easier to integrate niche software applications into processes in a way that may eliminate the need for an operational data store.

The information dimension is usually overlooked in designing business systems because data is viewed as a given, is not explicitly considered (“we’ll work out the details later”) or is considered only an afterthought. This may occur because the information dimension of systems engineering is treated as being of secondary importance to defining the best process and determining the required applications capabilities. But we think making data an afterthought is a mistake. Ventana Research uses a framework that explicitly calls out information (all forms of data) and technology (software, hardware and networks) as separate elements in addressing business issues, rather than lumping the two together as “technology.” Explicitly taking the data perspective into account provides a broad perspective that frames process and technology requirements. We assert that treating data as a core consideration can result in better process design and clarify the issues companies must consider to select the appropriate systems to support the people and process aspects of business operations.

Quote-to-cash is a useful example of where an end-to-end process requires more than just workflow to manage the handoffs as tasks are executed. In some simple cases, an ERP system can handle all of the details. In others, automating the process and data flows may require multiple systems (such as a CRM system for customer and account information, as well as systems for product configuration, contract management, billing and collection in addition to ERP. Some of the data assembled in a quote-to-cash transaction may have to be transferred to other operational systems to fulfill the transaction. To achieve best results, data must be staged and controlled from start to finish and there must be a single system of record. Deciding on what application (or applications) to use to manage the process and where to locate the system of record physically and logically depends on a company’s specific circumstances.

Engineering quote-to-cash end to end from both process and data flow perspectives can speed its completion (thereby improving customer responsiveness), remove unnecessary manual steps (generating efficiencies) and reduce or eliminate errors at every step (resulting in better customer service and lower costs).

Another example that benefits from a data-driven end-to-end process is requisition-to-pay. It may seem counterintuitive, but accelerating the payment of invoices can improve a company’s bottom line. With interest rates in much of the developed world at historic lows, the greatest return on available cash is taking advantage of early payment discounts. Yet few companies take advantage of these. One important reason why they don’t is deficiencies in the data and technology needed to make early payment practical. Starting the automated process at the point of initial requisition gives the treasury function better visibility into the amounts and timing of future outlays, making cash forecasting more certain. Greater certainty about the corporation’s cash position lowers the amount of cash it needs to hold to meet payment obligations while maintaining an adequate operating liquidity buffer to allow for forecasting errors and unanticipated needs. Companies that have limited visibility will be cautious about making payments and must maintain a larger, more conservative buffer stock of cash. Using automated systems to speed the processing of invoices by eliminating delays in handoffs is only one element needed to make early payment discount feasible. Timely access to accurate data to support processing invoices is necessary, as is data needed by an analytical application that supports the treasury function to handle the complexities of managing cash effectively.

The importance of timely access to reliable data is often overlooked, but it can be the key ingredient to improving the execution of core business and finance department functions. Engineering data and data management into the design of technology-driven processes must not be an afterthought; it must be integral to the decisions about what software is used and how processes are to be performed. Our research shows that data issues plague companies, and the larger the company, the bigger the problem may be. Effective data management is essential to improve corporate performance. We advise companies to review their current processes and take steps to modernize and automate any that are a drag on performance.

Regards,

Robert Kugel – SVP Research

One of the charitable causes to which I devote time puts on an annual vintage car show. The Concours d’Élegance dates back to 17th century France, when wealthy aristocrats gathered with judges on a field to determine who had the best carriages and the most beautiful horsepower. Our event serves as the centerpiece of a broader mission to raise money for several charitable organizations. One of my roles is to keep track of the cars entered in the show, and in that capacity I designed an online registration system. I’ve been struck by how my experiences with a simple IT system have been a microcosm of the issues that people encounter in designing, administering and using far more sophisticated  ones. My most important take-away from this year’s event is the importance of self-service reporting. I suspect that most senior corporate executives – especially those in Finance – fail to appreciate the value of self-service reporting. It frees up the considerable resources organizations collectively waste on unproductive work, and it increases responsiveness and agility of the company as a whole.

vr_ss21_spreadsheets_arent_easily_replacedElectronic reporting began as a solution to paper print-outs, reducing the resources required to transmit information needed by individuals and making it easier for them to find information. Over the past couple of decades, these enterprise reports also have become much easier for IT professionals to create and maintain, but they are still time-consuming and aren’t particularly flexible. Rather than have their IT department create another version of a report, people often copy an electronic report, paste it into a spreadsheet, reconfigure the information to suit their needs and distribute the modified spreadsheet to a group of people. For this and other reasons IT departments have found it difficult to get business people to stop using spreadsheets. Our benchmark research on spreadsheets finds this is the number-one impediment to change. Spreadsheet users value control and flexibility. This is precisely what self-service reporting delivers without the time-consuming hassle of manually creating and distributing spreadsheet reports.

It’s useful to think of self-service reporting as an attitude and approach to using information technology than as a specific software product or category. It starts with the basic assumption that individuals in organizations must be able to retrieve information they need from the systems they use. This does not replace periodic enterprise reporting, dashboards, scorecards and other such “push” communication methods. This is not the once-voguish concept of “democratizing business intelligence” either; that was still too complicated for the vast majority of users. It’s more like replacing telephone operators with a direct dial system. (Note to readers under 40 years old: Once upon a time it required human intervention to connect your phone to someone else’s.) The goal of self-service reporting is to make broad sets of data readily available and give people the ability to access it (subject to permissions) as well as easily organize and display it in the form and format that works best for them.

In the early days of business computing, simply collecting and having access to company data was a breakthrough. Over the past decades, corporations automated and instrumented a broad range of functions, and the challenge lay in collecting and managing the data. Although companies still face many issues in data management, devolving reporting to the individual is now a critical issue companies must address. Well-designed self-service reporting improves the productivity of individuals in both IT and the rest of the organization. The controller of a midsize company recently told me people had been spending one-and-a-half days per month creating reports for senior executives and operating managers after the monthly and quarterly accounting close. Talk about unproductive use of resources! This is an extreme example but emblematic of time routinely wasted on something individuals ought be able to do on their own. From the IT side, far too much time is devoted to creating and maintaining reports – it’s akin to still having switchboard operators on staff to route calls.

Self-service reporting exists both as a feature of enterprise applications and in stand-alone products designed to work with applications that lack this capability. In deciding whether to replace existing software and in any vendor selection process, it’s important to assess benefits of self-service reporting capabilities. This is especially true as mobility increasingly is built into enterprise business applications. Anytime, anywhere access to information is one of the most important reasons why companies invest in mobility and demand this capability in the software they buy. Being able to drill down and around in the data contained in such reports provides a powerful incentive to replace spreadsheets. But there are also stand-alone products that can provide self-service reporting capabilities within legacy systems.

For our service organization this past year I still created a limited number of spreadsheets for individuals and groups that are not on our system. The only data issues we had were created when someone copied and pasted information from our reports into another spreadsheet. Errors are inevitable, and even in our local event there are unfortunate consequences when they occur. For example, telling someone who has just spent hundreds of hours preparing his or her car that the vehicle is not eligible for an award because it was not on the list of judged cars (even though our system showed that it was supposed to be judged) provokes the same level of irate response one might expect when a CFO is informed that there’s a material error in the published financial statements.

Self-service reporting is fast becoming a standard capability within businesses. It’s part of a generational change that is redefining corporate computing. People beyond a certain age still expect information to be given to them. Younger people want to get the information they need themselves and expect to have the ability to do so. IT departments must identify opportunities to offer self-service reporting and implement it wherever possible. Business users – especially those in finance roles – should familiarize themselves with self-service reporting – especially stand-alone tools that they can use and administer – and implement it wherever it is feasible.

Regards,

Robert Kugel – SVP Research

Twitter Updates

Stats

  • 78,996 hits
Follow

Get every new post delivered to your Inbox.

Join 70 other followers

%d bloggers like this: