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The New Definition of Management Reporting
Find out how management reporting has drastically changed over the last 20 to 30 years—and what that means for your organization.
Management reporting has changed drastically over the last 20 to 30 years. But in order to discuss that evolution, we first need to examine the “old” definition of management reporting.
The “Old” Definition Of Management Reporting
Before 1990, most management reports were specific to an individual issue. Thus, most leadership teams only examined financials. Most of this financial information came from a single system and was entered into Excel, manipulated for the needs of leadership, and then put into a PowerPoint for charting and discussion. Or, if you were in operations, you would pull your transactional information and aggregate it into metrics like the number of widgets made, defect rate, etc. The same goes for customer support (where you would examine customer information), and so on.
In 1992, Drs. Robert Kaplan and Richard Norton created the Balanced Scorecard (BSC), a strategic process that brought together information about finances, customers, operations, and people, and put it all in the same report. However, the technology used to support the Balanced Scorecard (i.e. Excel) was, and still is, structured to best support spreadsheet capabilities—but was still needed to manage that last mile of integration. Thus, Excel and PowerPoint were a bit of a necessary evil in the management reporting world.
Over the course of the last 20 years, there have been some changes to the Balanced Scorecard. Organizations from around the world have adopted the framework in different ways, so what may be called a BSC in an American for-profit company may not look anything like a BSC in a European nonprofit or an Asian municipality. Like any solid yet flexible tool, the scorecard has been customized for myriad ways of operating.
Also, since 2005, there has been an explosion in data tracking capabilities. In fact, 90% of the data in the world has been created in the last two years alone. Therefore, you probably have access to 10 times the amount of information today that you would have had in the last few years. Managers and business leaders now have even more reason—and motivation—to gather and analyze data than they had in the past.
All of these changes and newfound capabilities have created a situation where there is more data living in more places—but the same worn-out tools are used for the final configuration of this information. Trying to keep the data sources and updates accurate has become a tremendous amount of work for those involved in management reporting.
The “New” Definition Of Management Reporting
Today, the definition of management reporting has changed. It’s not about what you can manage, it’s about what you should be managing.
The challenge of management reporting in today’s world is determining simply how to get the data you need into one place. Some organizations look to data warehousing to solve this issue, but this option has its own set of challenges. It creates a world within your organization where the IT department is at the center—and reporting requests take a backseat to other issues.
Companies today realize they need a solution that will allow the various owners of information to input updated and accurate data into a central source. The data owners may be in human resources, accounting, operations, sales, or a number of other departments. From there, the appropriate groups can perform calculations across this data to generate new summary data that is always available—and most importantly, always accurate. Employees should be able to use this data to create reports for different audiences like board members, leadership teams, divisions, departments, and others. Your reporting software should allow you to pull information across the enterprise so that you will no longer be faced with the version control issues presented by Excel.
This new world of management reporting is really the best of both worlds. You can keep the applications specialized for the activities they manage and still create reports leveraging all the data. All of this is possible today because of a central reporting solution.
People across modern organizations have become increasingly frustrated with the large number of data sources, the time and energy it takes to generate reports, and the overall lack of organization. But with a solid process that has reporting software front and center, your organization will be ready to execute on your strategy, not just talk about it.
ClearPoint can pull information from a variety of sources via data loader and bring it all into a single system. From there, reports can be generated without compromising information accuracy. Learn more about ClearPoint’s scorecarding, dashboarding, reporting, and customization abilities through a tour of the software.