Business runs on data, and there is no shortage of it today. Financial records, customer files, inventory and project details — the amount of information processed by a single business unit today would overwhelm the largest enterprises just a few decades ago.
Fortunately, technology makes it easy to organize and store all your information. However, ineffective processes or legacy systems can severely limit your organization’s ability to leverage the information it has and adversely impact performance.
Five signs your analytics capabilities may be holding you back
1. Inflexible reports. Accounting and ERP software providers typically offer a variety of pre-formatted reporting templates that can be used to produce financial statements and other standard reports. ERP solutions also include standard reports for other modules that are part of the system, such as warehouse management or manufacturing execution. This saves time and money by eliminating the need to create frequently used reports from scratch.
Having a set of predefined reports is useful, but a format that works for another company might not work for yours. Financial statements, for instance, may need to be tailored to present data in different ways for your audiences. Your board of directors might be satisfied with a summarized income statement, but C-level executives will want more detailed information.
2. The wrong tools. No matter how many predefined reports come standard with an accounting or ERP system, there will always be a need for custom reports. For instance, a sales manager might want to know why a new product is not selling well in a given region. Or maybe your company wants a specialized report to track performance in a way that is unique to its business.
In the past, creating ad hoc reports required a level of technical expertise that few people possessed. These experts were often members of an IT department who had advanced training. Their skills were in high demand, so it could take weeks to have a new report created. Given the pace of business today, waiting around for someone else to do the work is no longer acceptable. If building custom reports is still a labor-intensive task or requires extra training,
you are likely missing opportunities to improve business performance.
3. Inaccessible data. One of the benefits of having good reporting tools is the ability to combine data elements in unique ways. One such example is bringing together financial, production and organizational data to evaluate the cost of producing a given product at one location versus another. By providing centralized access to data from different departments, an ERP system makes data collection easy.
If your business uses separate systems or spreadsheets, however, combining data may not be possible. Your current analytics solution might only have access to financial data, for instance, but not project management details because its module has a different architecture. This kind of problem is also experienced by users of less-robust ERP systems.
4. Limited KPIs. Key performance indicators (KPIs) are important management tools. They help organizations focus on achieving specific objectives, enable managers to see how their teams are performing against those objectives and let everyone know if performance is falling below targets.
To be effective, KPIs must be matched to the specific business model and objectives of the company. No two companies are exactly the same. Even companies in the same industry have different goals and objectives. Software providers often overlook this, assuming that a handful
of industry-specific KPIs preconfigured in standard reports and dashboards are all that any business needs.
One can only manage what can be measured, so having the right KPIs is essential. If your analytics tools do not support industry-specific KPIs or enable you to track custom KPIs, they are not doing you any good.
5. Rigid dashboards. Dashboards are another important tool, not just for managers, but for everyone in your organization. In addition to displaying KPIs, dashboards help individual team members stay focused by alerting them to tasks that need to be completed or issues that need to be addressed. They also increase efficiency by making it easy to access important information upfront, so time is not wasted searching for reports or features that are used frequently.
To make the most of this capability, team members from different departments only need to see information that is relevant to their jobs. Individual employees should also be able to easily customize the dashboard to meet their specific needs. Dashboards that are difficult to tailor to specific roles or hard to personalize are often more of a hindrance than a help; they are unlikely to provide insights and efficiencies that your business needs.
Any one of these areas can significantly impact the way you gather and use data for decision making. Check out these must-have financial dashboards that can help you address each of these areas and greatly improve the monitoring of your company’s financial and operational performance.
What are your analytic and reporting needs? Contact us today and we will discuss a plan to meet your specific goals.