Reporting

Quarter End Reporting – A Time for Reflection

by Geoff Devereux on March 31st, 2010

It’s that time again! The big push for end of quarter. Salespeople are hitting up every lukewarm lead in their Contact List. The Accounting Department is hounding vendors for invoices, customers for payments, and internal folks for every last bit of supporting documentation they can get their hands on for the audit file. And the Marketing guys? I dunno, they are probably all on Twitter!

It’s a busy time. It can be frantic!

But remember that it’s also a time for reflection.

Lately, I’ve been spending a great deal of time delving deeply into the world of Business Intelligence (B.I.). One of the most prevalent themes within the B.I. space right now is the concept of Predictive Analytics: using B.I. software to use historical information to predict future events. This concept has actually been around for hundreds, if not thousands, of years. Who wouldn’t want a Crystal Ball? In the stock trading world, you can look to the guys we call “Technical Traders” as an example of how Predictive Analytics might model.

The point is that everyone wants to look into the future, but remember we first need to understand the past. Looking back on a periodic basis should be a healthy exercise from which insights can be gained. Quarter end is an opportunity to do so.

Move beyond idle navel gazing, the blame game, and compliance for compliance sake. What can you learn from the quarter?

For instance, I’ve been writing in this space for 6 months now. I took the opportunity yesterday to look back at some of my early posts. What I learned is that recently I’ve been so engrossed in the B.I. world, I’ve been forgetting my roots. I’m not a B.I. guy by trade. The whole point of Indicee is to bring B.I. out of the industry bubble and “to the masses”. Instead, the B.I. industry has been pulling me into its world!

Time to take a step back.

With that, I’ve pulled a selection of 5 early posts from the vault. Please share your thoughts!

1. Spreadsheet Nation

The idea was simple enough, write a short post about the role of spreadsheets in organizations. More accurately, write about the role of Excel in organizations. I’m trying to provide a frame of reference from which readers can gain perspective on what Indicee does. My thinking was, I could provide a bit of historical context (background of VisiCalc and Lotus 1,2,3 – the original electronic spreadsheets from the days when you actually had to use the word “electronic” in order to differentiate the thing from a paper spreadsheet), then a colourful anecdote about one or two of my favourite “Excel moments”(to illustrate some of the benefits and drawbacks to spreadsheet use), some stats on spreadsheet proliferation, end off with an introduction to the concept of datamarts, and Bob’s Your Uncle, point made. Readers could use the comfort and familiarity of the spreadsheet concept to relate to the new concept of Indicee. I figured the most difficult part of the whole exercise would have been choosing just one title for the post.

I was contemplating something like:

Confessions of an Excel Jockey
Fathers of Invention; The Mother of All Spreadsheets
or Ghosts of Spreadsheets Past

What is difficult, complex, or nuanced about that?

2. The Meaningful Scorecard

“Finding the one or two key numbers that drives success in your business, and bringing them to everyone is very powerful in a business”
– Joe Knight, co-author of Financial Intelligence

The inspiration for this post was a management improvement video (13 minutes) posted on You Tube by http://www.harvardbusiness.org of an interview with Joe Knight, co-author of the book series “Financial Intelligence”, Business Owner, and Harvard Business.org blogger. The central message of the interview was that everyone in an organization benefits from understanding the numbers by which success is measured within a business. The trick is finding the right numbers. Particularly in today’s climate hearing about transparency is nothing new, but what doesn’t get as much play is this idea of narrowing the focus on measures of performance.

With respect to the numbers: Thanks to technology, we now have ALL the numbers available ALL the time. Reports have become super-robust because they can. Although there’s an argument for providing surplus information and letting the end user choose which parts to digest, there is also a great danger. Knight argues that providing less information to end users can actually produce better business intelligence. The process of asking the questions and finding the underlying systems within an operating group can enable a more focused, effective approach to providing reports. First, understand the work flow and underlying system of work for operations groups; then, develop measures around them. It’s easy to say, but when was the last time these conversations have taken place in your business?

“Business is like a game, and if you don’t understand the finances, you’re basically playing a game where you don’t know score”
- Joe Knight

According to Knight the emphasis should be, and this is where the interview really resonates with me, on providing a small number of operational metrics in a simple way and providing them to everyone. He rightly points out that the people receiving this information probably don’t want to be accountants, and have little or no interest in double-entry accounting “no matter how exciting it may appear to be”. For Accounting and Finance guys like us, it then becomes an exercise of translating Business Intelligence into Practical Intelligence in the reports we create to achieve an optimal value. It would be like one of us attending an advanced physics lesson. We would get way more out of it if someone simply dropped an apple on our heads. Sometimes less is more.

3. Sun Tzu’s Cash Burn

The Art of War, Chapter 2: Waging War

“Sun Tzu said: In general, the strategy for employing the military is this:

If there are 1,000 4-Horse Attack Chariots, 1,000 Leather-armoured Support Chariots,
100,000 Mailed Troops, and Provisions are transported 1,000 li, then the domestic and external campaign expenses, the expenditures for advisors and guests, materials such as glue and lacquer, and providing chariots and armour will be 1,000 pieces of gold per day.

Only then can an army of 100,000 be mobilized.” *

* Sawyer’s translation

As an accountant who has worked in a bunch of technology start-ups; when I read this, the first thing I do is try to extrapolate Sun Tzu’s Quarterly Burn Rate. It’s a bit tougher to try and calculate Cash Zero date seeing as, if the campaign is successful, you will have gained “the masses of All Under Heaven” – AKA “priceless”.

After spending a fair bit of time getting to know Indicee lately, the next thing that naturally came to mind was whether Sun Tzu’s Accounting system ties to his ERP system. If he has Pieces of Gold in one system and Numbers of Men in another, he could be spending a ton of time cutting and pasting reports in Excel to get his Departmental Salary Breakdown by Headcount!

4. Bringing Design Thinking to Accounting and Finance

Design thinking is a process for practical, creative resolution of problems or issues that looks for an improved future result. It is the essential ability to combine empathy, creativity and rationality to meet user needs and drive business success.

(There are number of definitions out there, but I think the above serves the purpose)

There’s a lot of Buzz around the concept of Design Thinking at the moment. A great deal of content has been produced, but I’m not sure how much has been directed toward the accounting and finance community. During the past 2 years for us, listening to someone talk about “radical innovation” usually entailed mostly hand-wringing and, well, … expletives. It’s understandable to have missed some of this.

So, I’m not sure how much about the topic has filtered in. Maybe that’s a good discussion point for the comments:

How much of the Design Thinking paradigm has filtered into the accounting and finance community?
How applicable is this school of thought to accounting and finance?
Do you believe there is a place for Design Thinking in accounting?

5. Ghost of Software Salesguys Past

We are greatly influenced by our experiences. As a child, the hand reaches out to a hot stove only once.

The last couple posts have talked about legacy issues; legacy IT systems, legacy education. Today I’d like to talk about another actor in the Legacy IT Show, the classic software salesman (circa. 2004).

This guy (above) may or may not be selling software, but does the song and dance sound familiar? I’ve sat on both sides of the table. Listening to salesguys pitch software to me as a purchaser, and doing the accounting & finance work in a company selling enterprise software. Software, as an industry, is still an infant relative to most other industries; and with youth, comes growing pains. Here’s the story on both sides.

Listening to pitches, sitting through demos, taking notes only to be asked by a Director, “what would it cost if we just built our own?” was crushing. Or, hearing about how easy a rollout will be (“it’s like lego”) and then, months later, hearing about how it won’t do all that stuff we thought it would do. Did we send out that cheque yet?

On the sell-side, working with salesmen who could barely operate a computer or use excel well enough to complete an expense report. There was one colleague who seemed to continually be calling me from the middle of a war zone, god bless ‘em. The path to hell is paved with good intentions, indeed.

Over the years, I think we were selling more than software. We were selling a dream. And the dream was that somehow this product would magically work and fix all reporting and organizational problems. Presto!

———————————-

Again, let me know your thoughts guys! Do these posts help? Hurt? Are you indifferent? Keyboard froze? Are you “reflecting”?

Let me know!

Enjoy!

Filed under: Asking questions, Business Intelligence, Industry Insights, Spreadsheets, culture

Tags: Asking questions, culture, Excel, Month-end, Quarter End, reporting, Spreadsheets

Sharpen your Business Analysis: Think Like a Reporter

by Geoff Devereux on February 25th, 2010

Walter Cronkite, Amanda Lang, Tom Brokaw, Woodward & Bernstein, Barbara Walters, Larry King, the entire cast of 60 Minutes;

What do all of these people have in common?

These guys all make a living through establishing rapport (trust), listening, and through their skillful use of questions while interviewing.

Think Like a Reporter

As a business professional, whether you’re in accounting & finance, sales, marketing, or IT, you need good information about your environment. Some of the best information tends to be locked up in the head’s of all the people you work and interact with through the normal course of your day.

Why not try “interviewing” your colleagues?

I’m talking about anything from stuff about business process to procedural and administrative workflows, operations design, and business and financial report requirements. Pick a topic and ask questions on it.

The opportunity exists to understand all the systems operating around you better when you start thinking like a reporter and asking good questions.

Let’s be clear. I’m NOT talking about badgering, browbeating, hectoring, pressing feet to the fire, inquisition style questioning that’s designed to embarrass or belittle your colleagues.

So, what makes a good reporter?

I’ll go into a few pointers and some media, but I would also encourage all of you to watch the CBC’s Amanda Lang interview some people. In my view, she is far and away the best question-asker in media right now. She’s a great example of doing all the right things through the course of an interview to engender trust of both the interviewee and the audience as well as to ask insightful questions that allow for detailed answers.

The Role of a Reporter

Mathew Ingram, formerly a technology reporter with Globe & Mail and now blogger with GigaOM, sums up the job of a traditional reporter beautifully in his recent TEDx Toronto talk, Five Ways New Media Will Save Old Media, as:

“we called people up and asked them irritating questions and then wrote down what they said”

Whoops! Sorry, wrong clip. Do we have the right clip? Do we have a clip?

Ah, okay, what he said was,:

“If you’re writing about a story, somewhere someone out there knows more about that story than you. In fact, a lot of people might know more about that story than you. So, you should allow them to tell you what they know.”

This is the essence of reporting.

Now, when he said this, he was actually talking about having newspapers incorporate comments and input from readers into the process of journalism and not specifically about interview etiquette. But, in the New Media world there’s less and less difference between the audience and the subject. Here’s Mathew’s TED talk where he describes this evolution:

I think Mathew makes a good point as well in recognizing the importance of having a dialogue going. In “traditional” reporting, there may have been the perception of a one-way exchange. The reporter asks, the subject answers. That’s only half the story. It’s a conversation and like any good conversation it’s a two-way street. But, it’s a conversation with purpose. You are the guide.

Simple Tips

Broaden your sources

Think about this question: Where do we get our information? Bob Woodward, one of the journalists that brought down Nixon in the Watergate Scandal, tells us in the following clip that we get information 1) from people 2) from documents (or evidence) and 3) from the scene (observation).

He make a great point about talking to people. He says, talk to A BUNCH of people. Not just one person. In a day, he may talk to a dozen people around the same issue in order to gain that broad perspective of views.

Asking Questions

Basic journalism tells us to focus on the Five Ws (that isn’t really 5… or just Ws, okay, so don’t use Journo’s for calc’ing your Net Profit):

Who? Who was involved?
What? What happened?
When? When did it take place?
Where? Where did it take place?
Why? Why did it happen?
How? How did it happen?

Of course, all questions are not created equal. Journalism 101 blog lays out some ground rules about the soft skills, but suffice to say I don’t think you want to make people feel stupid.

In general, keep an open mind and ask open-ended questions. Keep that question engine going in your mind so you can delve more deeply as opportunities present themselves. LISTEN, so you can key off of what the subject is telling you.

Remember, you are questioning yourself during this process as well. All of those assumptions you may have embedded in your thinking need to be questioned throughout this process.

Say Thank You!

and, of course,

Be Prepared

‘Nuff said!

Here’s some additional resources that should help you build up your skills.

Media Training Basics: Mastering Tough Questions from the Media by Harvard Business Service

How To Ask Better Questions by Judith Ross at Harvard Business Review

Learn To Ask Better Questions by John Baldoni at Harvard Business Review

The Four Principles of Interviewing by Columbia University

From Chapter 13 of Sun Tzu’s famous, Art of War, on the use of spies:

“The means by which enlightened Rulers and sagacious Generals moved and conquered others, that their achievements surpassed the masses, was advance knowledge.”

“Advance knowledge cannot be gained from ghosts and spirits, inferred from phenomena, or projected from the measures of heaven. But must be gained from men.”

Added Bonus

Sun Tzu’s Five Types of Spies

1. Local Spy

2. Internal Spy

3. Turned Spy

4. Dead Spy

5. The Living Spy

Enjoy!

Filed under: Asking questions, Critical Thinking, Operations Reports, Performance Management, Reports, stories

Tags: Asking questions, CBC, Communication, Critical Thinking, listening, Media, New Media, Press, reporting

Improving Your Month-end Throughput

by Geoff Devereux on February 3rd, 2010

January is “in the books” as they say. How’s the month end coming?

This isn’t a month-end tirade. Instead, I’m feeling nostalgic so I thought I would share a story from my past. It’s been some time since I’ve been subjected to the time pressure of month-end & period close activities. For as much accounting has its common elements, every company’s month-end experience is different. I’ve worked for a number of different companies in a number of different sectors, and no two were the same.

One of the things about Accountancy, and it’s often cited as one of the profession’s advantages, is the ease with which one can move between industries. The common elements enable it; bank rec’s, financial statements, “the binder”, you know the drill. I think this is true to a point; however, I have also noticed that we can build up domain expertise as well as anyone in an organization. I’d be interested in hearing your thoughts on this bit.

Today, I’m thinking about some work I did for a mid-sized media company here in Vancouver. I was brought in as a chair-warmer Analyst while the company restructured and relocated its back office to Toronto. My predecessor had jumped ship early (before his job was scheduled to disappear), but Toronto wasn’t quite ready to steer the department so the local Controller (who was also on the block) needed someone to wait it out with him.

This was not one of those nightmare month-ends ( I’ll save my nightmare stories for closer to Halloween… and maybe April Fool’s).

I had some pretty standard stuff to do; the bank rec wasn’t pretty, standard payroll auditing for a few hundred employees, a systems conversion meant that we had to chase down some entries that got dropped from one of the back office systems, and then there were the Revenue Reports for the managers. The Controller did all the financial reports. He would often describe his month-end consolidations style as the brute force method. He understood 1) the importance of having a process and 2) the tenacity that is a requirement for the profession.

I’m going to focus on the Revenue Reports for the managers that were part of my month-end process. I would collect data from the accounting system, from the system that recorded the advertising sales, and the system that generated the physical page layouts (capacity). This business has a number of publications being produced. Each publication required a report. After which, the completed reports were emailed and yes, were printed, for each of the managers.

You’ve probably guessed buy now that I put all of this data into a spreadsheet. Thinking back, could the company have benefited from Indicee? It probably would have taken a bit of work to set it up and the reports would have looked a bit different, but Indicee probably could have provided the information I was putting into these reports. But that’s not what I want to tell you about.

I want to tell you about how I learned the process of completing these reports. The incumbent, clever fellow, had developed his process for these over a number of years and in relative isolation. He had it down to a science; but, all that knowledge was locked up in his head. When he walked out that door, the process walked out the door with him. Typical in mid-market companies. Documentation on complex processes that have evolved over time tends to be weak. In this case, the damage would be shortlived because these reports were being killed when the head office transition was completed. In the meantime though, I was left to decipher and de-engineer the reports and get them out to the managers.

To the point:

In the course of my investigation, I found that neither my boss nor some of the other managers actually knew what large parts of the reports meant! Or why they should care! The process of creating the report, even with practice, was big. Why was I going through all of this if the end users had no clue what I was giving them? Why had my predecessor done so over the course of a number of years? A pretty big portion of the reports were just wasted effort.

My theory is that reports evolve over time. This one had evolved, but it hadn’t “lost it’s gills” so to speak. It was standing upright and talking, but it had a tail.

http://www.cafepress.ca

Tightening up your month-end throughput means recognizing the Darwinian nature of your reports. Questioning your end users, your internal customers, is key to understanding what parts are no longer relevant. You’ll need to be persuasive within your organization in order to overcome the natural tendencies toward the status quo. Be prepared to quiz people. This part is easier said than done, but with tact and a collaborative attitude gains can be made. I suggest using the analogy of accounting as a manufacturing process.

Month-end, like any good manufacturing process, needs to be free of waste.

It’s a question of throughput.

That’s my story for today. For more on stories, I recently produced a guest blog post on the Sage Peachtree Community site called, The Importance of Stories. Don’t worry, month-end will be there when you get back.

Enjoy.

Filed under: Accounting, Asking questions, Critical Thinking, Month-end, Operations Reports, stories

Tags: Accounting, Critical Thinking, Month-end, Peachtree, reporting, Sage, stories

Defining Business Intelligence

by Geoff Devereux on December 16th, 2009

The Historical View circa 1958

The notion of intelligence is… “the ability to apprehend the interrelationships of presented facts in such a way as to guide action towards a desired goal.”

- Hans Peter Luhn, IBM Journal, October 1958

The above quote is generally credited with coining the term Business Intelligence (B.I.). Luhn’s vision was ambitious for his time and it’s still ambitious today. How much of the following article do you find relevant right NOW with respect to your business reporting challenges?

The following are direct quotes from the IBM Journal Article, “A Business Intelligence System” published 1958 with my commentary added:

Information is now being generated and utilized at an ever-increasing rate because of the accelerated pace and scope of human activities and the steady rise in the average level of education. At the same time the growth of organizations and increased specialization and divisionalization have created new barriers to the flow of information. There is also a growing need for more prompt decisions at levels of responsibility far below those customary in the past. Undoubtedly the most formidable communications problem is the sheer bulk of information that has to be dealt with. In view of the present growth trends, automation appears to offer the most efficient methods for retrieval and dissemination of this information.

With respect to the volumes of data being created in 1958, I think we can safely say, you ain’t seen nothing yet. Keep in mind that 1958 was really the primordial soup of computing and information management. At that time, the Integrated Circuit had just been developed which would pave the way for development of computing as we know it today. Looking back on IT in 1958, I’m thinking it consisted of a “series of tubes”.

Luhn continues:

Ideally, an automatic system is needed which can accept information in its original form, disseminate the data promptly to the proper places and furnish information on demand.

So, in 1958, the concept of “on-demand” is also christened. A blog I follow called, Only Dead Fish, by Neil Perkins references the Greek term, Kairos, recently when discussing the importance of context. Kairos refers to, “the right or opportune moment” or “the supreme moment”. I think this is the best way to think about the basic need/want underpinning the concept of on-demand. I think this is how Luhn was thinking about it too: