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  • CFO Europe Magazine

Less Is More

Why thick monthly reports to management are going the way of the five-year plan.

There have been other benefits too, not least in speed — consolidated Nordic data is now reported up to group level in four days, down from eight — and the information gathering burden on Hägg’s regional finance staff is lighter. Meanwhile, Hägg says that making brand managers root around in financial data and generate their own reports has led to a “much better awareness of finance issues among non-financial people.”

When it comes to the distillation of key performance data, however, few finance executives can match the record of Klaus Hartmann, CFO of Magyar Telekom, the HUF604 billion ($2.92 billion) Hungarian telecom firm formerly known as Matáv.

Like its parent, Deutsche Telekom, the company uses SAP’s Business Information Warehouse, the data warehousing core of mySAP Business Intelligence, that enables managers to process large amounts of operational and historical data according to their own needs. But that wasn’t installed until January of this year. When Hartmann arrived at the firm in November 2000, finance was going to town with a string of hefty, standardized reports. Complaints from the executive committee soon echoed in his ears. “ ’We’re being killed by too many reports,’ they told me. ‘It’s hard to read them all and find which ones are essential.’ ”

So Hartmann set himself an ambitious target: to condense key monthly financial and non-financial data into a single sheet of double-sided A4 paper. For a while the experiment succeeded, but after a few complaints of strained eyes Hartmann relented, switching to a three-page summary using a larger type size. The document includes income statements for all four lines of business — fixed line, mobile services, data services and internet services — showing variance against forecasts; a group cash flow statement; a full capex breakdown; and key operational data such as tariffs and minutes of usage. In PowerPoint format, the presentation runs to around a dozen slides, but the three-page hard copy is still in use today, despite a groupwide move away from paper-based reporting. As Hartmann observes, “some people like to have something in their hands, a document they can leaf through.”

More Power to You

Even with this push to pare down data and to give managers the ability to produce their own reports, monthly reporting won’t become extinct. As Unilever’s Hägg notes, there’ll always be a need for actionable, summary-level information. “When people are confronted with this wealth of data, they often say, ‘Yes, this is great, but I just wish that someone told me the message.’ ”

But as a centralized ritual, the days of the monthly “hoovering-up” and decanting of data are surely numbered. Says Bednar of Bureau Veritas: “People in the field are always telling us they want more control. Rather than having to be fed what head office is putting out there, they want to drill down and analyze their own data. They may even look at more information than in the past, but the point is it’ll be their own, rather than what head office has decided on their behalf.”

Spaargaren of Gemplus agrees. A CFO can’t afford to be too possessive of the numbers, he says. “You should try to ensure that management itself can get the information and the reports they need, not the stuff they don’t ask for. The data is not something that’s owned by the CFO. That’s not my view of finance.”

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