Dialing In

By Jeffrey Rothfeder  |  Posted 05-01-2004 Print Email

Dialing In

At the very least, most companies in the post-Sarbanes environment will need programs that impose controls on financial systems to produce an audit trail that shows, among other things, where data originated from, the number of times it was altered and by whom, and whether all necessary approvals have been obtained throughout the process of handling and incorporating data. Companies may also want to stay on top of financial data in something close to real time, in hopes of more rigorously tracking performance for disclosure purposes, acquisition integration, business unit analysis and determining if goals are being met. If so, they might go a step further and install a business dashboard.

Such systems come in many varieties. CXO Systems, for instance, offers a dashboard that serves as an overlay to any major business-intelligence program, while leading suppliers of business-intelligence software, such as Oracle, SAP, Cognos and Siebel, offer dashboards that integrate with their own proprietary applications. Either way, the goal is to be able to sift data from all corners of the corporate network, thereby producing an easy-to-read series of metrics that track key areas of corporate performance, such as sales-to-inventory ratios and average customer wait-time at the call center, as well as goals and benchmarks. With this view, a CEO, CFO, business-unit head or sales manager could watch minute-to-minute changes in daily shipments of a product on a color-coded chart that compares the results with benchmark metrics such as company average, industry average and industry best practice. If shipments drop precipitously, for instance, executives can make sure that information is publicly disseminated as being material to operations—as Sarbanes-Oxley requires—and attempt to fix the problems in the supply chain that led to the shortfall.

Dashboards typically work hand-in-hand with business process management programs that control financial information and document management, workflow and, in a post-Sarbanes environment, compliance data warehouses. Some dashboard-like programs, however, delve into relatively obscure aspects of company operations. Typical of these is NetWeaver, a so-called integration platform from SAP. By situating NetWeaver in the middle of financial applications that cross organizational boundaries, it acts like a magnifying glass on a company's financial activities that are usually not readily visible among traditional balance-sheet data—customer relationship management files, for instance, or travel and entertainment expenses. NetWeaver and similar programs could track product credits and exchanges and stack this information directly against product-line revenue to determine the soundness of specific brands, or it could monitor employee expenditures related to promoting specific products, thus enabling the integration of T&E costs into brand overhead.

The result: a picture of true product value that often gets lost in a traditional P&L report. "Financial guidance numbers require a full understanding of the sales pipeline as well as its related costs," says Chris Eldredge, SAP's director of solutions strategy. "This includes factoring in the activities that sales, service, and marketing are engaged in, which are related to specific products."

Dashboards serve another key function as well. Under Sarbanes-Oxley, outside auditors are required to approve the controls companies implement to safeguard data, and these auditors are expected to be more honest and independent than, well, Arthur Andersen was with Enron in signing off on quarterly financial reports. Some auditors have complained that it's difficult to get inside the head of a company from an external perch. Dashboards and process monitoring programs can be shared with auditors, thus opening a window through which accounting firms can examine the financial activities and transactions that are often buried deep within corporate operations.



 

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