From Data to Insight – how “full-stack” BI operations enable CFOs to thrive in today’s rapidly evolving business environment

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Published on January 3, 2014

Author: Genpactltd

Source: slideshare.net

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Today’s CFO faces myriad challenges, from ongoing monitoring of business performance, analysis and decision making, to quality of financial data, sharing of relevant information and accuracy in compliance. CFOs are starting to question the current paradigms of business intelligence (BI). Many organizations, however, are finding answers in a new breed of “full-stack” BI solutions that embed analytics, IT, domain expertise and other capabilities into their business processes.

BUSINESS INTELLIGENCE From Data to Insight – how “full-stack” BI operations enable CFOs to thrive in today’s rapidly evolving business environment Genpact Today’s CFO faces myriad challenges, from ongoing monitoring of business performance, analysis and decision making, to quality of financial data, sharing of relevant information and accuracy in compliance. CFOs are starting to question the current paradigms of business intelligence (BI). They find them biased towards technology-only solutions, their implementation is lengthy and inflexible and most importantly, they often neglect a thorough analysis and prioritization of the measurement of key business performance metrics before closing on the BI design and implementation. This can prevent CFOs from truly embedding business intelligence into their company’s operations. Many organizations, however, are finding answers in a new breed of “full-stack” BI solutions that embed analytics, IT, domain expertise and other capabilities into their business processes. Overview The CFO’s role has historically been focused on preserving the integrity of the financial data. Today, the landscape is changing. Technology is allowing CFOs real-time access to strategic data. The insight such data provides has the potential to drive more timely market-driven decisions, allowing the CFO to take on greater responsibilities. In many cases, the traditional CFO role is transforming to include greater involvement in setting corporate direction, strategy and creating long-term shareholder value. External Stakeholders Reporting and guidance (financial, non-financial) Forecast, Report (financial, nonfinancial) Revenue, Working Capital (AR), sales projections Sales & marketing CEO, Board Short- and long-term expectations of revenue and earnings growth; strategic initiatives Working Capital (AP) Finance Budget, KPIs, allocation and monitoring of OP/CAPEX, Inventory CFOs are at pivotal intersection of cross-functional data highways, strategy and enterprise performance management. Performance expectations (financial, non-financial) COGS (short and long term) and respective risk, EHS risks Procurement Operations COGS for pricing (short and medium term), Projected service-levels, NPI pipeline and strategy (mfg, facilities) Demand and availability of production inputs (commodities, energy, components), respective short and medium term price Figure 1. CFOs are at pivotal intersection of cross-functional data highways, strategy and enterprise performance management

The evolution of The business intelligence on a CFO’s desk is often the only place the CFO from where significant financial and scorekeeper to operational data come together business partner — combining asset usage intensity comes at an and profitability and not just opportune time. revenue. However, the visibility The demands of of such data and the ability to analytically aggregate them and business, competitive process them at scale, is limited and regulatory by many constraints starting with pressure in today’s (despite many years of investment economically in tools) technology itself. challenging environment are forcing organizations to become smarter and more efficient about the use of information. Today, the ability to extract, integrate, analyze and interpret business information in a timely, proactive way is an increasingly important factor for organizations. Advanced business intelligence solutions can help CFOs make better use of both time and data. The most successful businesses are going beyond traditional BI tools to “full-stack” BI operations that encompass analytics, IT, domain expertise and process delivery. Such tools are seeing rapid growth in today’s tight economy, driven by intense competitive pressures. This white paper examines how CFOs are using advanced BI tools to improve decision-making, identify new business opportunities, maximize cost savings and detect inefficient business processes. Yet statistics indicate most CFOs are struggling to balance Typical BI challenges new and old roles. According to a recent survey conducted by Traditional BI approaches are typically technology driven. As Genpact, 51% of the average CFO’s time today is spent on a result, they often are not prioritized or designed based on transactional activities and only 21% on decision-making support. performance-critical metrics and related business processes. Today’s CFOs sit at a crossroad of data that can be used not just This in turn limits their ability to embed intelligence into the for reporting and compliance, but also for prediction of future enterprise’s operations. risks and trends. The business intelligence on a CFO’s desk is The typical BI architecture within a finance organization is often the only place where significant financial and operational complex. As a consequence, there is often a significant gap between what is important for the finance function and how Inaccurate forecasts due to limited visibility and, often, poor data quality; limited time spent on ‘insights’ and ‘decisions’ due to poor data-readiness Revenue, Working Capital (AR), sales projections Low confidence in revenue and margin forecast due to inaccurate data Forecast, Report (financial, nonfinancial) Lower budget/ planning confidence, Investment rate hurdle doesn’t reflect all risk; ineffective strategy execution against KPIs Sales & marketing Silo based data, limited crossfunctional visibility often leads to inaccurate COGS COGS for pricing (short and medium term), Projected servicelevels, NPI pipeline and strategy SIMPLIFIED CEO, Board, other stakeholders Short- and longterm expectations of revenue and earnings growth; strategic initiatives For instance, while the ability to deliver consistent data Limited/silo visibility and poor dataquality can impair prioritization; induce errors in judgments Limited, static, and aggregate view of production level, risk, Static and cost visibility leads Working visibility and to ‘approximate’ Capital ‘high-level’ suboptimal budget (AR) allocations allocations lead to COGS (short sub-optimal working and long Procurement capital term) and Finance Budget, KPIs, allocation and monitoring of OP/CAPEX, Inventory respective risk, EHS risks Operations Complexity often clouds the impact on COGS and margins for tactical decision making and reporting well it is executed. reporting is high on important (64%) for most organizations, their ability to successfully execute if dramatically low (16%). Similar scenarios exist for other important areas such as budgeting and planning, financial and statutory reporting, and compliance and controls, where the ability to execute is significantly low as opposed to the strategic importance to the function. Which is why, the CFO’s imperatives around business insight, Demand and availability of production inputs (commodities, energy, components), respective short and medium term price Figure 2. Robust BI enables CFOs to anticipate, account for, and possibly mitigate the impact of adverse incidents and trends. compliance and efficiency require a robust BI solution. For example: • Business insight: Approximately 57% of finance executives feel that the lack of timeliness and accuracy of non-financial data is a concern. The inability to correlate different data sets coming from different parts of the organization, such data come together — combining asset usage intensity and as divisional sales with product and client profitability data, profitability and not just revenue. However, the visibility of such inhibits the ability to maximize profits. data and the ability to analytically aggregate them and process • Compliance: Today’s CFO is typically responsible for a large them at scale, is limited by many constraints starting with number of stringent regulatory reports – each with a unique (despite many years of investment in tools) technology itself. format and reporting standard. Many of these reports require CFOs need to conquer the increasing complexity of their roles high quality data – accuracy and alignment is crucial. A and enable a coordinated approach based on intelligent business robust BI solution enables automated exception management information that enables them to anticipate, account for, and for simple cases and facilitates informed collaboration on possibly mitigate the impact of adverse incidents and trends. complex cases.

• Efficiency: The enterprise data infrastructure is increasingly complex, and diversity of management information is increasingly being required by decision makers. There is also rising demand for efficiency and flexibility of the finance function, along with continued pressure to curb costs. “Process-driven” BI puts an emphasis on embedding analytics a unique format and reporting standard – makes this increasingly important. Advanced BI solutions can also improve the management of enterprise performance, thanks to enhanced decision and Strategy (re)Design and Build into the enterprise operations as well as a unified approach PREDICTIVE, DESCRIPTIVE, An Ca alyti pab ca iliti l es to enterprise data management. Using end-to-end business processes, their outcome-relevant metrics and related factors as Non-Automated Reports (standard, ad-hoc, user driven) *BI Automation/Platform (data model and automated reporting layer) Enterprise Data Management and Warehouse (Infrastructure layer) Data consolidation and reconciliation Cascade KPIs, identify thresholds and key “if-then” Account and Compute Report Set Targets Correct Strategy Dashboards for key stakeholders BI REPORTING • Operational/production reporting, BPM scorecards • Data visualization and dashboards • In-memory OLAP, mobile BI, self-service BI • Data dissemination (downstream flows) • Specialized functional solutions y ENTERPRISE DATA MANAGEMENT AND WAREHOUSE • Master data management • Data governance and quality • ETL and BPM integration • Data warehouse appliances and federation • Big Data integration *Includes Self Service BI, OLAP – online analytical processing, BPM – business process management, ETL – extract, transform and load Figure 5. “Full-stack” Business Intelligence solutions throughout the BI lifecycle. reporting processes (e.g. days to close, access to right reports by Gather Feedback BI, ERP, UC&C Implement enterprise data and BI enablers, program rules (typical starting point) EXECUTE Implement Initiatives PROCESSES Internal and external ecosystem refines questions, hypotheses (recommended starting point) DECISION PROCESS REENGINEERING • Redesign of process related to data sourcing, maintenance, processing, and use ics lyt y na sor d A Advi ss an e g BI oc Pr erin ion ne cis ngi De Ree really matters — a subset of metrics, processes and people. Bu Int sine elli s gen s ce departure from the usual “requirement-to-configuration” AND SOCIAL MEDIA ANALYSIS PROCESS -DRIVEN BI AND ANALYTICS ADVISORY • Enterprise information and data-management strategy • Big Data strategy Statistical and Social Media Analysis a lens to plan for business intelligence needs can be a powerful approach to BI. It enables the selective investment into what Predictive Models Impact Insight Factory Operate New Processes Analyze and Predict Advanced statistical modeling right decision makers) and improve efficiency by reducing manual reporting efforts. A selective approach to business intelligence reporting, as well as reengineering of faulty processes and the Measure Performance Data extract, cleanse, standardize, enhance Enable decision making at the “moment of truth” e.g. CRM rules establishment of appropriate delivery models to cleanse data, enables the reduction of data management costs. Advanced BI operations in practice The following examples demonstrate how a number of businesses have recently put robust BI solutions in place to help Figure 4. “Closed-loop” BI is a business process, not an IT or statistical discipline, and requires robust operations in the background. Benefits of a “full-stack” approach To be most effective, the solution should encompass a “full- them address a variety of business challenges. CFO Challenge: A global financial services company had a tedious reporting process that was not suited to accommodate the growth of the company. stack” of analytics, technology, data management, domain Solution: A new, robust BI solution now allows the CFO expertise, process management and delivery. A “full-stack” BI insight into the entire business. solution enables actionable business intelligence. Such solutions are driven not by the feature of the BI tool, but by performance Enterprise-wide closing and consolidation drivers and related business intelligence generation enabling The Asia-Pacific geographic division of a global financial services analytics embedded into company depended heavily on its parent business for reporting. The A “full-stack” BI solution business processes. This enables actionable business can allow a company to intelligence. Such solutions enhance a number of are driven not by the procedures. For example, feature of the BI tool, but by performance drivers and regulatory compliance related business intelligence levels can be improved generation enabling analytics along with reduced embedded into business compliance costs. As processes. division had a tedious and repetitive reporting process that was not scalable to support growth. In addition, the division had multiple general ledgers (GLs) and wanted to move to a phased, singleinstance GL. Given the parent company’s complexity ($24 billion in assets, a presence in over 10 countries and 100,000 customers), the transition was challenging. To address these challenges, the division adopted a robust BI solution that included a reporting system with three Hyperion cubes – closing mentioned previously, the and consolidation models and a data entry cube. Doing so allowed large number of stringent regulatory reports that are required the division to replicate the corporate reporting model. It also today, for example in financial services or health care, – each with enabled it to make a smooth transition to a new GL at no extra cost.

The division now conducts data sourcing from multiple GLs with over the counter theoretical prices. Sophis was the central hub trigger files to determine source data refresh. The solution allows for: that processed trade data and static data and returned the risk • Hierarchy maintenance through a master data management tool • Multiple currency reporting/analysis; automated solution using AppWorx (a tool for process-dependent scheduling) • Month-end, quarter-end, year-end reporting and analysis While the division CFO could previously access only summary level data, the BI solution now allows him or her insight into the entire business. In addition, it has reduced analyst time previously required due to time zone issues. calculation and P&L data to various downstream systems for reporting and reconciliation. The firm wanted to decommission Sophis and replace it with a strategic in-house architecture that would replicate Sophis’ functionality to ensure business continuity. The company collaborated with an industry expert to develop a BI implementation that would allow it to achieve its goals. The two companies then worked together to develop a proof of concept for the new system and establish a decommissioning CFO Challenge: A global oil and gas OEM used a limited Excel-based financial planning process that was inappropriate for the needs of its users. roadmap for the Sophis Risque application. Solution: Use of a common, user-friendly planning and strategic system mapping, creation and implementation of reporting tool has improved productivity. feeds and feed elicitation with downstream systems. Enterprise planning and budgeting implementation A large, U.S.-based global oil and gas OEM engaged in the manufacturing and servicing of heavy industry products was challenged by a manual and error-prone Excel-based financial planning process. The company also lacked a repository of historic data for analysis and reference. Data maintenance was an arduous task and variance reporting a significant challenge. To address these challenges, the company adopted a Hyperion planning system comprising three user streams and defined workflow processes to allow for approval mechanisms. The system defines the automated actual data load process for baseline plan data. Users now input functional currency which is then converted to reporting currency based on exchange rates. The application allows users to adjust the plan input data The company’s new, BI-based solution is completely metadata driven and features end-of-day feed analysis along with CFO Challenge: A large investment bank wanted to create a tool for their Value at Risk (VaR) Reporting Basel II implementation. Solution: A new BI-based solution easily analyzes risk characteristics and enables numerous additional benefits. Value at Risk Reporting for Basel II A large investment bank wanted to create a tool for their Value at Risk (VaR) Reporting Basel II implementation. The bank was challenged in monitoring trading VaR limits for its businesses and had inadequate visibility into potential losses at different portfolio and sub-portfolio levels. The bank faced additional challenges around data sourcing, integrity, data quality and changing regulations. with stretch to arrive at final plan data. It also includes a robust To address these challenges, the bank implemented a security design to accommodate platform users, regional users scenario analysis tool to analyze risk characteristics (i.e. fund and headquarter-based users, allowing them selective access to sensitivity analysis based on change in both markets scenarios data without losing workflow process functionality. - LIBOR, credit spreads, ratings and holdings scenarios). The As a result, the company has experienced improvements in productivity and simplicity and now has a common, userfriendly planning and reporting tool. CFO Challenge: A global financial firm wanted to create an organizational risk-reporting platform. Solution: A new BI-based solution is completely meta-data driven and is allowing the company to achieve its goals. tool includes VaR computations, historical simulations and scenario generation in support of current needs. The tool also evaluates risk metrics for money market funds based on credit quality, quantity of securities in the fund and number of shares outstanding. Finally, the analysis tool includes QA and production support for regulatory change implementations. Conclusion In addition to maintaining financial integrity, today’s enterprising CFOs have the opportunity to empower companies. As their Risk reporting platform development role expands and the CFO plays a larger part in a company’s A U.S.-based global financial firm was looking to create an success or failure, it is more important than ever to ensure they organizational risk-reporting platform. The client used the have the tools needed to formulate real-time decisions that Sophis Risque application to book trade, calculate P&L, risks and advance the business.

“Full-stack” BI solutions cover the entire BI, thanks to the Benefits of the solution include improved regulatory compliance combination of process analysis, organizational/operating levels along with reduced compliance costs and effective delivery model related to data processing and technology. management of enterprise performance due to enhanced It provides actionable insight driven not by the individual decision and reporting processes. features of BI tools, but by the performance drivers and related processes of analytics embedded into business processes. Genpact brings a thorough understanding of the performance drivers and the related process of business intelligence They cover the “full-stack” of BI – from enterprise data management and warehousing to BI automation and platforms (data modeling and automated reporting) and non-automated reports (including ad-hoc analysis and user-driven reports). Why Genpact generation and usage (closed loop) to each assignment. This includes the “full-stack” of data and analytics, with technology and people-based support, creating solutions that are costeffective and offer superior scalability. In addition, Genpact offers industrialized operations that are Genpact’s “Integrated Business Intelligence Solutions” is a unique approach to industrializing BI operations driven by its thorough understanding of performance drivers and related process of business intelligence generation and use. The solutions encompasses analytics, technology, data management, domain expertise and process management, covering the “full-stack” of enterprise performance management, risk and compliance, IT infrastructure, automated platforms, custom reporting and analytics and related advisory and reengineering. Integrated BI Solutions also includes technology and people- robust and complement each client’s own capabilities. We have adopted a scientific approach to business processes that enable our analytics and embed them into your own processes. Genpact employs one of the largest BI and analytics talent pools, with more than 60,000 global associates in 18 countries who are active in industrialized processes operations. Our team brings to each assignment the experiences gained from managing more than 4,700 processes for more than 700 clients across more than 40 industries. We have one of the highest satisfaction scores in the industry and have a large pool of referenceable clients. based support that results in superior scalability and costeffectiveness. Business Intelligence Portfolio of Solutions for CFO Risk and Compliance Enterprise Performance Management Planning Data Management Reporting Management reporting Profitability and risk analysis Financial consolidation and reporting Regulatory reporting Planning Operational reports leveraging ODS*/ Data Warehouse (standard, ad-hoc, user driven) BI Automation / Platform* Strategic and Ext. Reporting (data model, automated reporting) Enterprise Data Mgmt. and Warehouse Data governance and quality Data models Master data management Data extraction, transformations, and loading Data Sources Integration Infrastructure Slice and dice, interactive analysis, root cause, cubes, what-if BI Strategy, Advisory, and Process Re-engineering NonAutomated Reports Consolidation Business insights and impact opportunity * Includes Self Service BI, ODS – operational data store

About Genpact For more information, contact: Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients. Genpact stands for Generating Impact – visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability. We have global critical mass – 60,000+ employees in 24 countries with key management and corporate offices in New York City – while remaining flexible and collaborative, and a management team that drives client partnerships personally. Our history is unique – behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years. business.intelligence@genpact.com For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook and LinkedIn. © 2013 Copyright Genpact. All Rights Reserved. Visit our website at: www.genpact.com/Integrated-BI

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