• Strategy
  • CFO.com | US

Details, Details

Transaction data doesn't usually play well with others. Here's how some companies are getting around the problem.

Managing data can be a real pain (your Brent Spiner joke here).

In fact, Alan Yong, a veteran technology analyst at Aberdeen Group in Boston, says he was shocked to discover that users still list data integration as one of the biggest hurdles in implementing budgeting and planning (B&P) software. Even with recent advances in financial portals and application program interfaces, CFOs still report sizable headaches in getting B&P software to access information stored in far-flung computer systems.

Compounding the pain: Many companies are moving away from once-a-year budgeting, choosing instead to go with hybrid annual-rolling forecasts. Those applications, fueled by real-time updates and analysis, don’t offer a heck of lot of insight when parsing data from 1963. “Even top-flight B&P solutions fall short if the legacy system it’s pulling data from is not running in real time,” notes Yong. “The data flow remains disjointed.”

Very Retro

Typically, that disjointing starts when companies attempt to bring together scads of spreadsheets scattered across scores of departmental applications. As e.Intelligence CEO Richard Tanler notes, it’s hard to know whose data to trust when tens of thousands of Excel files flood in from every corner of a company — often in a willy-nilly fashion. Such ad hoc management of data, says Tanler, leads to all sorts of troubles, from security snags and input errors to spreadsheet formats that discourage adjustments after a budget is in place.

If this all sounds discouraging, buck up. While data may be the root of the budgeting and planning problem, it’s also the solution. Experts say data warehouses — those massive storage devices companies starting buying in the mid to late ’90s — can actually bring a little sanity to the budgeting and planning process. “Companies never thought that the biggest aid to planning would be the data warehouse,” declares Tanler.

Indeed, finance managers have mostly used data warehouses to see what has happened at a company — not what might happen. In fact, Tanler estimates that 80 percent of the data warehouses in use today lack detailed planning data. “If those [planning] numbers exist, they are probably in a spreadsheet somewhere,” he claims. “But they’re not connected to anyone else’s spreadsheet.”

Take the case of Lands’ End, the Dodgeville, Wisconsin-based retailer. For years, management at the direct merchant relied on a homegrown spreadsheet when making budgets. By all accounts, the proprietary program was not nearly up to the task. Patrick Gilbert, director of financial planning and analysis, says the in-house software created a nightmare for finance staffers trying to consolidate information at the department and account level. “It used to literally take days to make simple changes.” recalls Gilbert.

Last June, management at Lands’ End finally decided to ditch its in-house setup. Within five months, the company rolled out an enterprisewide B&P system. Gilbert says it’s proved to be a real upgrade. For example, using the old software, there was no easy way for Gilbert to enter an employee health insurance upgrade that would trigger an across-the-board price increase. “Now,” Gilbert notes, “I can make that kind of change in a heartbeat.”

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