When it comes to retrieving metadata from EPM source systems for financial reporting, having the right tool can make all the difference!
The purpose of this article is not to dive deep into ‘financial reporting rabbit hole’ and examine the many pitfalls associated with the financial or management reporting process. Rather, it’s to explain why generic BI tools so often fail when it comes to financial reporting and additionally to show the differences between these solutions and reporting software that is specifically built for financial reporting. (A more extensive Whitepaper on this subject is also available!)
The monthly financial reporting process is, without question, a key area of focus for major organizations around the world. The reason for this is that the financial KPIs revealed through the reporting process allow an essential insight into the ‘health’ of a company – helping to guide the C-suite in their vision and strategy.
Because reporting is so important, most organizations invest in BI and/or reporting software to help with the management reporting process, while others select Excel or PowerPoint to make the best of their reporting.
Good tooling is essential
What most companies do thoroughly is the calculation, consolidation and translation of their entire organization. EPM suite source systems – including Oracle HFM, Oracle Essbase, Tagetik, OneStream and so on – are characterized by their strong calculation engine. These systems are very good at performing consolidations, translations and other types of complex calculations involving large volumes of data.
However, when it comes to financial and performance reporting, there is usually a critical lack of capability within these EPM systems. For example, the EPM system will often allow users to create a basic, brief report. A ‘real’ reporting booklet however –one that includes commentaries and other value-added features – isn’t possible.
Why generic BI solutions are failing in financial reporting
Many of the traditional BI tools currently available on the market claim that they can connect to the EPM source system. This may be true in a way, but how they connect to the source is often what causes the most headaches for Finance teams. This is because, not being purpose-built for financial reporting, BI tools don’t automatically understand the vital information contained within the metadata, or what’s important to reporting professionals and end-users.
For example, as any good accountant or Finance professional knows, when creating a standard Profit and Loss report, it’s standard practice to start with the Revenues at the top of the report, with Costs in the middle and Net Profit included at the bottom after taxes.
When generating this type of report with a generic BI tool, the information will be laid out in random order. While basic formatting of the information is still possible – the data can be bolded or italicized, or given a different color, for example – the user won’t be able to differentiate the hierarchies of the source system dimensions.
Obviously, this makes it impossible to read the report! And it makes it even more difficult for the Finance team to ‘tell the story’ of the organization’s business performance.
What makes financial reporting software, like CXO Software, different from generic BI, is the way it connects to different EPM source systems. Because the software ‘understands’ the metadata contained in the EPM system, it inherits the information from the source system ‘intelligently’ – automatically organizing and presenting the information in a way that makes sense to users, i.e. Revenue at the top, Net Profit at the bottom.
So as a Finance professional, one of the first questions to ask when considering a new software application for financial reporting is, does the tool understand all the consolidations rules and inherited it from the financial source system?
A Finance owned Solution
Another disadvantage of generic BI software is that they are typically owned by the IT department, rather than Finance. This means that IT or external consultants are needed to develop the reporting process, which is expensive and time intensive. It also means that, from the moment the implementation project is complete, the tool remains outside the control of the Finance function. So, if changes need to be made to reports, IT or external consultants must always step in.
What’s more, the implementation process often brings to light the fact that the reporting tool – chosen as the standard to serve the whole company – fails to meet the specific requirements of Finance users. And, by extension, those of the CEO and senior management team. This is because the needs of the Finance department – and the diverse group of stakeholders they deliver their reporting to – are both highly specific and highly diverse.
Their needs include:
- Powerful analytics and drill-down functionality
- Near real-time availability and the ability to make changes to month-end report in minutes, not days
- The ability to print pixel-perfect month-end booklets
- Having 24/7 online and mobile access to reports and dashboards
- The ability to add narrative and commentary
Why CXO Software is different
It ‘s because our solution is focused on financial reporting and processes and nothing else, that we are able to meet the specific reporting needs of any organization. Our application is built for Finance professionals and their end-users. It’s our ‘intelligent’ connectivity and its innate understanding of the Finance function’s needs that makes our solution the highest rated financial reporting software in the marketplace.
If you are interested to learn more about our fiancial reporting solution, download our Brochure or even better, experience first hand the power of our reporting software and visit our Live Demo page!