Transforming the Finance Department - OBIEE

The Traditional role of Finance and Accounting department as number crunchers who report on the financials of the company is changing rapidly.

The days of collecting and putting accounting information into spreadsheets is being phased out. Spreadsheets are powerful and have a lot of capabilities but they undermine the information consistency. With spreadsheets, every department gives a different view because they have defined keys and metrics in different ways. Spreadsheets also contain a lot of errors because of manual data entry and inconsistent logic in custom macros.

The transformation of the Finance department involves Data Management, Planning and Budgeting, Performance Management and Business Intelligence. Finance is now spending less time collecting information and more time in analyzing it. The financial analysts are increasingly being presented with a Data Analysis platform in most organizations. They are using the new platform, the Data Warehouse, to create Interactive Dashboards and Scorecards - to communicate strategy to all employees, and track progress for every individual to meet common strategic goals. They are using Performance Management tools to measure, track and take action.

Most enterprises are generating data rapidly and there is a lot to be gained from this data.

A common approach is adopted to use this data and it takes only 3 steps:

• Create Information from Raw Data - IT Professionals take the raw data from various systems, integrate it, aggregate it and turn in into information via a data warehouse

• Create Knowledge from Information - Analysts and Managers using query reporting tools access the information in the data warehouse and understand trends and patterns to create knowledge

• Formulate Strategy from Knowledge - Executives and Managers take this knowledge, input rules and models and create Strategies and Go-To-Market Plans.

What are some of the new objectives added to the role of the Finance department? Here are a few:

• Identify Value Drivers - drivers of revenue and profitability
• Re-engineer the process
• Suggest new investments
• Implement Dashboards and Scorecards
• Improve Forecasts
• Predict customer churn
• How are they doing it?

Using BI tools, they are automating much of the work involved in collecting the monthly profit and loss data from each business unit, consolidating it, and comparing it against the corporate budget.

They are having the ability to report against data held in the company's customer relationship management system to get visibility into the company's sales pipeline. This should enable them to forecast their cash requirements and make predictions as to what the profit and loss will look like in three, six, nine and 12 months ahead.

They are able to analyze profitability right down to the individual product. This involves the consolidation of data held in several back-end systems, including product lists, customer databases and sales reports, into a single cube of data. From there the data is extracted to make pricing decisions for the product line. Companies are now able to adjust pricing in a way that reflects better understanding of how much it costs to make and deliver a product to a customer.

The business intelligence system is being used to analyze stock management data so that they can produce more accurate demand forecasts, which will enable them to decide how much raw material to buy.

The Finance department can implement and publish dashboards to let different departments benefit from some of the insight mined by them, alerting where they need to focus their efforts in order to meet financial targets.

Summary:

The transformation is happening. To do continuous planning as opposed to only annual budgeting. To become an Advisor to the business, a savvy strategist, and turn Finance into a profit center, to re-engineer business processes and work with the company to make profitable decisions.