Presented November 22, 2007 at the Manitoba Certified Management Accountants "Business Connections" conference
In our presentation, we spoke on a topic of critical importance to managers (accountants or not). We discussed and demonstrated how different approaches to dealing with the exact same management information may lead to different management decisions.
We compared two different methodologies (Traditional - reports printed from various systems & Contemporary - BI) for the performance of financial and management analysis. We investigated the strengths and weaknesses of the approaches and highlighted the risks inherent in the most prevalent approach (Traditional).
In an attempt to demonstrate the risks & inefficiencies in the traditional approach and the power & ease of the contemporary approach, we created a video case study, which followed a CEO (played by Harry Black) & CFO (played by Jamie Black) through a very typical analysis scenario.
The first two scenes are conducted using the traditional approach. The start of the third scene rewinds (a la the old Twilight Zone episodes) to the beginning and examines how this same analysis would occur in using a contemporary methodology.
Having watched the case study, the results of the different approaches should be apparent:
- The traditional method often necessitates using others (report writers) to get the data out of the financial systems to answer management’s questions. This inevitably delays management’s progress.
- In the same amount of time, the contemporary approach yielded actionable information that identified what was causing the poor financial performance.
- As the data becomes available, it often leads to more questions, which, in the traditional methodology, typically cause the report requesting & report writing cycle to begin again, causing further delays.
- The contemporary approach facilitates this ongoing questioning. It is designed to allow investigation, ‘digging’ and exploring data to understand relationships- to gain insights.