All businesses want to know where they are right now in order to make good decisions consciously. No doubt about it. In order to know it, they need timely and relevant reporting - that's also clear and almost all companies aim to have it this way. So why this article? Because not always the measuring and reporting processes work as efficiently as they could. And one of the important reasons for it is mixing the two different roles of measuring activities (inputs collection) and analyzing them, instead of centralizing the first one across the organization.
While inside finance department the segregation of duties in the field of collecting inputs vs. analysis and reporting is pretty straightforward (usually: accounting vs. managerial controlling/reporting), at the company level it may become a real mess. And in order to provide quality decision making support on time you need much more than just pure accounting data. If your processes of collecting this data are not very well structured and automatized, you risk harming the reporting and analysis process and, as a result, losing real time access to the latest relevant information.
Where Is the Problem? - IT Example
Let's take a closer look at this problem using a simple example. You are a financial director in an IT company that deals with incidents and changes for applications (a team of IT specialists resolves problems of users and implement necessary changes for applications the company is supporting). You want your team to monitor some KPI's, which may include: direct cost per incident/change and cost per application user. Assuming it's not a problem for you to get the cost part, you want to combine it with information from other departments - number of resolved incidents/changes per application and number of each application's users in a period. Obviously you may have your finance team asking for this information each week/month to construct the measures afterwards. Applications support department would extract and send the incidents and changes data and service management department would do the same for applications' users. However, wouldn't it be much more efficient to have a one, unique source of all relevant inputs for the company available?
The first scenario is easier to implement but you risk delays (absence of information owner; communication overhead), inconsistencies (corrupted data sent; updates and corrections of data) and loss of information (more complicated drill down and follow up).
Unified source of input data, on the other hand, allows an immediate access to latest information with full detail behind. Not only it makes the recurrent analysis more efficient but also new relevant information can be discovered easier.
What Do You Need?
In order to achieve it, you should always differentiate between the roles of input data collection versus analysis and reporting activities. This doesn't mean further division of departments, nor employing new staff. What's really needed is a company-level initiative of concentrating all inputs for any recurrent, relevant analysis.
If you have an integrated ERP at your disposal, the majority of work can be done automatically - you would only need an administrator who understands the usage of inputs across the company to assign the rights properly. In smaller organizations with no ERP, it could easily be enough to assign a clear role to a person/department to collect and share all relevant inputs, so that the updated data source is concentrated in one place. Still, the information owners can remain spread across the organization according to their functions (for example, HR would always be the owner of personnel information) but one department (for example accounting) can be made responsible for including all this data in one database and maintain it complete and updated.
Like this, any department wanting to perform any kind of analysis would need to consult just one source to get all the relevant data, instead of duplicating the data collection process on its own. All you need is to remember that measuring business activities role should be considered separately to analysis and reporting - the latter should just use the already collected and structured inputs to reach the final conclusions.
Surely the concept presented in this article is not a surprise for you - all of us know that the quality source data is a key to better decision making support. The objective here is to revise the design of efficient measuring process in order to get the maximum out of it. The trick is to resist choosing the easy way of letting the things go with the flow and launch a company-level initiative of separating the inputs collection role and centralizing the source of data across the organization. Little one-time effort is required but you can reap the benefits continuously over time enjoying the real time access to the relevant information.