A flurry of mergers between software companies in recent years
has led to a strengthening of the structure of online data systems
known as business intelligence. Peter Simon, author of a report on
the phenomenon, tells Carolyn Canham about the
opportunities these developments hold.
Peter Simon is an accountant who has never worked in accounts.
Working in the strategy unit of the Bank of Ireland, he studied the
Charted Institute of Management Accountants (CIMA) qualification
“to give myself some credibility” and then used the qualification
in corporate banking, credit management, marketing and general
management.
This background makes Simon well placed to talk about the future
of the finance function as being more about supporting decision
making than number crunching.
He is now employed as a technical specialist at CIMA and,
working with the institute’s Improving Decision Making in
Organisations Forum, he has authored a report based on information
from members of the forum entitled Improving decision making in
organisations: Unlocking business intelligence.
The report looks at the phenomenon that is business intelligence
(BI), a term often used to describe the technical architecture of
systems that extract, assemble, store and access data to provide
reports and analysis (see chart). It can also be used to
describe the reporting and analysis applications or performance
management tools at the top of this stack.
BI also relates to company-wide recognition that a company’s
data is an important strategic asset that can yield valuable
management information and implement change so that this
information is used to improve decision making.
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By GlobalDataSimon says that previously BI information was found ‘piecemeal’
in organisations, but a series of acquisitions among software
companies during an 18 month period between 2006 and 2007 has
changed this (see box p14).
Unlocking potential
The CIMA report looks at how management accountants can help
unlock the new potential in business intelligence, freeing them to
transform finance and take on new roles.
CIMA has been promoting the idea of the finance function as a
business partner for years and Simon says that while it may seem
like an “old hat”, the reality is it has stalled. He says that
according to consultants such as IBM, Accenture and Cap Gemini,
business partnering happens in the FTSE 100 and in SMEs, but there
is a gap in the middle. In the public sector the results are
mixed.
“It has stalled where there is a lack of shared vision as to the
role of the finance function because traditionally accountants are
typecast as the bean counters, as the score keepers on the sideline
rather than players on the team, and some of us conform to type,”
he says.
“We are not being engaged in decision making with the front
line, because we are not seen as having that skill set, or being
part of the team and many accountants are trapped on the reporting
treadmill.”
The BI developments, however, mean the financial reporting
information management accountants are producing is “a bit
yesterday for young people in business”, Simon adds.
“People expect that if they are looking for information, they
can find it on Google within nano seconds, so it is a bit odd to be
getting information about their own business three or five days
after the month end,” he explains.
Opportunities
While business intelligence has the potential to make some
traditional management accounting roles redundant, Simon sees the
technology as an opportunity, not a threat.
“It’s not the death knell for accountants in business, it is a
huge opportunity for them,” he explains.
The report argues that accountants have a significant role to
play in making the business case for BI and helping with
implementation.
“Quite often BI projects fail to deliver what they are expected
to deliver because in fairness to the IT community, they can
produce the right kit, with the right software, but they are not
necessarily as close to the business as they need to be. There
hasn’t been this owner buy-in to make these things happen,” Simon
explains.
Moving past menial tasks
BI provides the potential for accountants to be freed up from
more menial tasks, which links back to more opportunities for
business partnering.
“Of course in terms of continuing professional development it
will be a challenge for some people to become the business partner,
but there is a lot of emphasis on that business partner and there
are a range of roles on the team,” Simon explains.
“You are also going to need people who will roll up their
sleeves and understand these new systems, who understand business
processes and you need people who understand statutory reporting
because that still has to be done.
“But it just seems that the area of greatest opportunity is to
take your accounting skill set and add to it some commercial
awareness and some business understanding and get out there and
enjoy yourself with a wider career opportunity.”
The BI report is the second Simon has produced in conjunction
with the CIMA forum. The first was entitled Improving Decision
Making.
Simon suggests there is room for a third report, which would
expand on the nature of the business partnering roles – what they
do, what they look like, what is good practice and how they
develop.
Feeding frenzy
A series of mergers in 2006-07 allowed for the integration of
different systems created by different vendors over the years,
creating a platform for business intelligence.
• SAP bought Pilot Software and OutlookSoft Corporation and then
Business Objects, which had bought ALG Software, Crystal,
Fuzzy!Informatik, Inxight and Cartesis.
• Oracle bought PeopleSoft (which had bought JD Edwards), Siebel
Systems, Hyperion Corporation and Interlace Systems.
• Cognos bought Celequest and Applix before being bought by
IBM.
• Microsoft acquired ProClarity Corporation, Navision Software
A/S, Great Plains Software and Solomon.
Source: Improving decision making in organisations:
Unlocking business intelligence
