Since their inception, ERP systems have struggled to provide accounting and finance departments with user-friendly inquiry and reporting tools. Most report writers are difficult to use, require development skills, are slow to run and don’t provide drill-down to the underlying transactional data for further analysis. What’s more, by the time you have designed, created and run the new report, the data is no longer current and the report is out of date.
Business Intelligence was invented to fill this void. Unfortunately, the very nature of most BI systems – latent data, staged data, transformed data – seems to fly in the face of fundamental accounting principles: accurate, timely and financially transparent information. The major flaw is data has to be duplicated to a data warehouse. This transfer is normally run over night; therefore, a journal entry that is posted in the WRP system can’t be seen in the reporting results until the transfer and calculation of that day’s data into the warehouse. This means that it can take as long as 24 hours for the journal to show up on a report, often rendering the financial information obsolete before it is even reviewed. Additionally, Business Intelligence systems were created to handle all types of data for forecasting and historical analysis from companies’ closed periods. The systems are simply not designed to accommodate the requirements of a frantic month-end ad hoc inquiry and reconciliation process.
To overcome the offline limitation of BI, companies have started using home-grown Excel spreadsheets or Excel plug-in applications to pull data directly from the ERP system. This approach has the great advantage: End-users are already familiar with the applications and a solution can quickly be put in place to meet immediate needs. However, spreadsheets and data extracts of this kind are often only partially documented and come with little or no security, data integrity safeguards or version control. Because they lack the strong underlying architecture needed to be reliable in the long term, changes become increasingly difficult and eventually this solution becomes unmanageable.
More recently, a new market segment has been defined that replaces the need for using spreadsheets to produce financial reports. The segment complements traditional business intelligence by addressing its shortcomings in producing financial information. The new segment is Business Optimization.
Business Optimization combines the best aspects of both BI tools and spreadsheets. It offers the speed and simplicity of implementation and use – the familiarity of an Excel-like interface and the security and power of a full scale reporting solution. In addition, Business Optimization Solutions provide integrity checks on the ERP system, ensuring that what you report is relevant, reliable and accurate.
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