Making the Business Case to Finance Leadership for Business
Reporting Michael Ohata Director Reporting Standards Microsoft
Corporation
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Objectives Identify common business information problems that
negatively impact reporting and related control cost &
effectiveness Define a business architecture that minimizes the
risk Describe how open standards achieve lower cost Use these
processes to better understand your business
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Common Business Information Problems
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A Typical Business Objective Increase production and throughput
by leveraging the large warehouse engine. Tightly integrate
critical business functions and align business processes to enhance
flexibility, increase efficiency and productivity. Does this sound
familiar to you?
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Leveraging the warehouse engine
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Externa l Financi al Reporti ng Business Operations Interna l
Financi al Report ing Investme nt, Lending, Regulati on Processes
Economic Policyma king Participants AuditorsTradingPartners
InvestorsFinancialPublishers & Data Aggregators Regulators
Software Vendors ManagementAccountants CompaniesCentralBanks
Corporate Reporting Process Standard Taxonomy (Definition &
Access) Common Business Logic Every step along the way people
collect, validate and analyze information repeatedly
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Common Business Data Integration Challenges Complex,
heterogeneous back office environment Lots of data physically
managed And we replicate it for specific applications Common
business rules/controls live within wide range of disparate
applications We use manual data validation processes that are often
circular Poor reuse of data definitions & business rules
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Many Internal Controls SubsidiaryERP CRM CRM ERP ERP ERP
SubsidiaryERP Consolidation Supplemental information Control
Control Control Control Control ControlControlControl Control
Control Control Controls located with data or supplemental, manual
processes InternalControlDocs ManagementReporting
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Internal Reporting When you consider Compliance as continual
process, we begin to see more clearly the need for better
automation Interna l Financi al Financi al Report ing Report ing
Externa l Financi al Reporti ng Business Operations Investme nt,
Lending, Regulati on Processes Economic Policyma king
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Heroic Analytic Processes Transaction data Multiple
departmental Excel spreadsheets Consolidated spreadsheets for
management Beyond business data integration challengeswe often
drive our businesses to new performance insight
ManagementReporting
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Lead to Risk of Manual Error Transaction data Multiple
departmental Excel spreadsheets Consolidated spreadsheets for
management
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Business Architecture that Minimizes Risk
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Where Do You Want to Be? Technology Financial Reporting
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Observation from CFO.com Performance management is to
performance data what ERP is to transaction data: Relevant
information, fully integrated providing a single view tailored to
the needs of finance & operating executives. Goal: Common,
standardized databases to establish and maintain a single,
unimpeachable version of the truth about company operations and
performance From IT, Compliance, and Performance ManagementIT,
Compliance, and Performance Management
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Business Performance Management Competitive Analysis Risk
Management Auditor tools 404 Monitoring Real-time Connection
Services Oriented Architecture A Web service is a standard
communication protocol that can be used by applications to: Publish
information Publish information Enable discovery of information
Enable discovery of information communicate over platforms using
open Internet standards communicate over platforms using open
Internet standards Data Business Operations Acquisition Integration
External Reports SEC Filings SEC Disclosure Checklist Dept of
Commerce Banks Internal Reports Data Data General Ledger
Consolidation Drill down
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Enterprise Use of SOA General Ledger consolidations Many
subsidiary companies Acquisitions Integrating internal systems
Language Lack of a standard chart of accounts Real example (Fortune
100 Company) 72 instances of SAP 14 days to consolidate the books
90 employees in G/L consolidations team to load, edit and validate
the subsidiary ledger mapping and loading
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SOA & Common Taxonomies Transactional & subsidiary
dataControlsControl Control Aggregation,Analysis,Viewing
ManagementReporting Wrap & Map - Standard data definition
XML/XBRL Web Services
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How Open Standards Achieve Lower Cost
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An Analogy for Standards in Business Integration Cargo
Containerization: Data Encapsulation Up until the 1960s Shipping
individual pieces of cargo Loaded, packed, arranged and unloaded
separately Significant breakage and pilferage Today,
Containerization 90% of world trade moves in containers Shipping
costs reduced by 70% More reliable and efficient end-to- end
transport Enhanced controls
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Web Services Integration Reporting System Sales System ERP
Integrated Platform Integrated Platform Leverages All Enterprise
Assets Captures New Opportunities & Creates Value from Existing
Investments Subsidiary Current Technology Approach
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What is XBRL Collaborative market effort 450 member
organizations Open standard based on XML Implemented across
applications Crosses all industries Designed for extensibility
Includes XBRL GL Standardization Calculation Cash = Currency +
Deposits Formulas Cash 0 Contexts US $ FY2006, Budgeted References
GAAP I.2.(a) Instructions Ad Hoc disclosures XBRL Item Label
CashCashEquivalentsAnd ShortTermInvestments Validation Presentation
Presentation Cash & Cash Equivalents Technology standard Only
one for financial & business reporting
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Summary Efficient corporate reporting demands better business
information integration Internal control discipline drives
continuous monitoring and process automation Break-through
performance management is about standardizing information