Financial Reporting – Customized vs. Canned

Posted by Michele Morrill

Oct 14, 2015 3:32:45 PM

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In any Enterprise Performance Management (EPM) project, as the Financial Reporting and Consolidation pieces are being scoped, a dilemma often faced by the project team is estimating how many reports to provide to the user, and how personalized or customized each report should be. This can be exponentially more complex when you consider the various user groups who may need access to the data, and the original source of the funds for the project. 

It is a particularly acute question when working with a planning, budgeting and forecasting project or a reporting and financial consolidation effort.  Regulatory requirements must be met, yet how valuable are the reports that are currently in use? How often are they used?  Financial reporting requirements vary widely. Developing individual reports can be time consuming and expensive, whether that effort is provided by an in-house team of experts or an outside resource – maybe a Hyperion Planning consultant or an SAP BPC consultant.  Reporting self-service is an option, but trying to be “all things to all people” can generate large volumes of developed reports, which can be a management and maintenance nightmare.

Often in the interest of cost/benefit analysis, the reports delivered for a project are minimal – and they don’t meet user needs.  When this happens, users are either forced to rely on inadequate information that leads to poor decisions, or they will copy and paste data to spreadsheets for manual manipulation.  Each region, product mix, department requirement for data granularity or - insert your own variable here - has unique needs that the delivered reports do not meet. 

When users manually create their own reports, this often leads to inefficient use of resources.  The standard available reports are sometimes used as a starting point for the customized report that the user truly requires.  This is when opportunity cost comes into play.  What other activities could the users be performing – revenue generating or cost saving – if they were not manually manipulating reports?  Another difficult choice is looming.  Will management have to micro-manage to minimize the resource leakage?  Or is the incremental cost (and ensuing empowerment of the report users) such that this is not a battle worth fighting?

Any answer to the “customized vs. canned” question will require a unique solution based on the circumstances of the project.  It will take into account the corporate culture of the environment and user base, the demands of the analysts, the skillsets of the users, and the cost of providing reports.  Both costs and benefits need to be added to the mix to determine the ideal combination.  And even the amount of time put into the cost/benefit analysis will need to be considered.  The best balance must be derived for each project, and the ideal balance for one project will differ from the balance chosen for another project.

Contact Strafford Technology for more information about financial reporting, budgeting and forecasting solutions.

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Topics: Financial Reporting