June 17, 2003

The Whole Truth And Nothing But

With their personal integrity now on the line, CEOs, CFOs, and other corporate officers mean business when they demand "confidence in the numbers." With a better understanding of the issues and the software features required, you'll be on your way to solving the crisis of financial visibility

by Stewart McKie

Continued from Page 1

The accuracy and consistency of financial information once it's repurposed into or sourced from spreadsheets has been a big problem because data in spreadsheets is so easy to change (either deliberately or in error). IRM helps solve this problem by locking down the data to prevent changes to key numbers in much the same way many budgeting applications lock data to prevent changes by anyone other than the budget owners.

Personalized Visibility

Transparent financial information requires that the information be understandable. Whether the information is easy to understand or not depends on sufficient content and context. Personalized visibility recognizes that individuals and workgroups receiving financial information often need to add more value to the data by adding their own content and context.

To date, most financial analytic software has assumed that the delivery of a financial report is the end rather than the beginning of a process. But most financial reports have their own value chain, which starts once the report is in the hands of information consumers.

Annotation (the ability to add notes, documents, Web links, and so on to an existing financial report) is a must in financial analytic software in order to support personalized visibility. Of course, IRM technology is necessary to ensure that the personalization process doesn't compromise the integrity of information received. But personalization through annotation improves the visibility of financial information by improving its quality by allowing the addition of content and context that the information designer didn't anticipate.

Process Visibility

Who would buy a financial accounting system without an audit trail function? Clearly, nobody would. But people do buy financial analytic software that often doesn't support the process visibility required to create an audit trail for the financial information publishing process.

Many financial analytic packages don't automatically track changes to the numbers (by tagging changed numbers with date/time stamps, user IDs, or type-of-change flags, for example). Nor do many packages provide a one-click function to make this audit trail visible. Specialized budgeting and consolidation packages typically do offer some degree of process visibility, whereas more generic reporting, spreadsheet, or online analytic processing packages do not.

In larger organizations, the annual budgeting and month-end consolidation processes are examples of the often multistep, iterative processes used to create financial information. Once this information is published, repurposing and personalizing it starts a new postpublication process that affects the audit trail.

In order to understand the history and future of the information you may be using to make a significant decision, you need process visibility. Process visibility lets you understand where the information is in terms of its business process, what happened to it before you saw it (how it was repurposed and who personalized it), and what might happen to it after you use it.

Source Visibility

Most of the information presented in financial reports is in the form of aggregated or consolidated numbers that came from a variety of back-end data sources. Source visibility ensures that you can always navigate back to the source system from which the numbers originated in order to fully investigate them.

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