Why Finance May Become IT's Integration Ally

Loraine Lawson

Usually when I write about integration, the focus is on IT silos: Data silos, application silos.

 

But, often, silos happen because of departmental divisions or business processes that actually had nothing to do with IT. Along the way, the organization's silos became embedded in technology, which adds an extra layer of complication-and opportunity.

 

Enter Integrated Business Process, or IBP. Like so many other things, the economy has highlighted the need for integrated business processes. IBP is the integration of all the business pieces-finance, sales, product management, operations, marketing and so on-so businesses can make better predictions and business decisions. IBP is the "missing link" between supply chain, product management and finance professionals, as well as a sort of next step beyond beyond traditional sales & operations planning (S&OP), according to the Aberdeen Group.

 

In a recent blog post, Ventana Research noted that a complementary - and I would add necessary - activity for IBP is integrated business reporting, which brings all the operational elements of business into one place so business managers can analyze it and manage it.

 

Obviously, there is a technology component to this problem, but as the post points out, at its root, this is not a technology problem. It's a business process problem-and increasingly, it's finance's problem, because the company is making decisions on very stale information:


 

"Every company routinely examines its operational data and its financial data. Many do some form of cost accounting. Most variance analyses connect operating events to financial impacts ... Yet all of this analysis is done weeks after the events occurred and its main focus is to explain financial outcomes. What's still missing is the ability of the people on the operational side to understand the financial impact of the decisions that they're making in the context of overall business objectives."

 

Or-to put it in plain English - during the recession, all those "handy" individual Excel spreadsheets have come back to bite the business in the rear end, because nobody knows what's going on or how to react to it.

 

Because of this impact on business decisions, Ventana named Integrated Business Process as a top priority for financial organizations in 2009. And that's also why Ventana is now suggesting finance take a direct interest in report integration:

 

"Managing the integration of the reporting function is Finance's job for two reasons. First, it should be monitoring these events and second, because it should be a part of the department's existing reporting and analytic activities to establish what I have called financial information management."

 

CIOs should be thrilled with this post, because it rightly acknowledges that managing financial and operational data integration "should be a shared responsibility of IT and business." It also outlines a clear business case for integration, in terms finance should clearly understand. You might even want to consider e-mailing the link to the CFO, despite Ventana's rather dour assessment of where CIOs stand with business intelligence:

 

"BI and reporting is not a universal CIO priority yet despite a lot of inaccurate 'research.' A part of the project you will undertake may simply be ensuring you have the proper IT resources available."

 

I suspect that's unfair, but even if Ventana's right, I'm sure most CIOs would be glad to make better BI and integrated reporting a priority, given the right business sponsorship, like, say, the CFO.



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