BY JENNIFER TOOMEY
Every organization has a lot more data than it used to. With all this information, you would think preparing reports on operations and performance would be easier. Think again.
Reporting has actually become more challenging, for 4 main reasons:
Regulations are on the rise across the globe. In the U.S., for instance, bank regulators are currently proposing stricter regulations on large financial institutions to mitigate the risk of cyber-attacks or high-tech system failures. At the same time, China is imposing new regulations on its growing online finance sector to root out fraud. In addition, tax regulation and reporting is growing worldwide.
As a result of increased regulation, businesses everywhere must manage more complexity in reporting—which puts a strain on existing systems and resources.Increased collaboration on dispersed devices and networks has heightened the risk of financial data exposure during report authoring, contributing and reviewing processes. Yet narrative reporting remains largely manual and time consuming, lacking process rigor and collaboration. Compiling proprietary data from disconnected spreadsheets and documents introduces auditability concerns and weak security.
The flip from capital-based value creation to digital value creation has necessitated more narrative reporting to explain how the business is creating intangible value.In 1975, tangible assets such as plants, property and equipment made up 80% of total corporate value on the S&P 500. In 2015, those tangible assets constituted just 13% of corporate value, compared with 87% of the value created by intangible assets such as customers, talent and intellectual property. These intangible assets need new key performance indicators and better explanation, because their value is not as easily understood as tangible assets.
We are using more data to inform, but data alone can’t tell a story. It needs context and elaboration that is targeted for specific stakeholder groups. The “narrative” part of narrative reporting is critically important.
What’s Wrong With How We’re Doing Narrative Reporting?
While there is a clear need for increased commentary in reporting, most narrative reporting processes remain manual and ad-hoc. It is a monthly or quarterly fire-drill to get report packages completed and delivered. The disconnected nature of the process means it is difficult to bring in subject matter experts for centralized commentary on content, and it is hard to track progress and who is currently responsible for individual areas of content. Finally, there are auditability concerns and weak security around supporting “need to know” access to content.
The effort is manual and time-consuming, lacking process rigor and security. These shortcomings can be costly—literally. The constant back-and-forth of multiple documents among multiple users allows mistakes to creep into the data, leading to error-prone reporting.
"Reinvent Narrative Reporting": Download the White Paper
Getting narrative reporting right is important because the quality of reporting can impact the perception of a company. Consider, for example, the scrutiny that EHS (environmental, health and safety) reporting receives, and how quickly a misunderstood report can cause brand damage as it’s shared socially.
On the flip side, if employees, investors, board members, donors or any other supporters don’t fully understand how an organization is achieving its mission, they’ll become less supportive. In a PwC survey of 85 investment professionals from around the world, respondents agreed that management teams should clearly show how the financial results relate to the business model, identifying risks and company strategy.
How the Cloud Has Changed Narrative Reports
The cloud has made it possible to improve how narrative reporting is accomplished because the data is centralized, secure, always up-to-date and accessible. In a complete, connected cloud environment, multiple applications draw from the same standardized set of data—so at any given time, report collaborators are working with the same version of the truth.
This is huge improvement over existing practices, where report collaborators are copying and pasting data from spreadsheets, Word documents, or whatever other sources are readily available.
The cloud also streamlines and accelerates narrative reporting processes, because it allows for simultaneous reviews and on-demand access, so that the workflow is no longer a thread of stops and starts.
Oracle Enterprise Performance Reporting Cloud, for example, helps finance teams combine data plus narrative in a single, secure, collaborative cloud environment. The application pulls financial data directly from the system of record in Oracle Financials Cloud—or other on-premises or third-party system—so you can be certain the data is always accurate.
Authorized users can access the system through any device, and start social conversations within the application to collaborate with colleagues. These conversations are more secure than e-mail, plus they provide a record of steps and commentary in the process, so users can always go back and see what changes were made, when, and why.
Because it’s cloud-based, users can access the system from any device. When the system notifies them of a reporting-related task, they can quickly connect, complete the next step, and move on.
Better Confidence in Your Reporting and Your Business
Narrative reporting is a necessity, but it doesn’t have to be a headache. It’s also more important than ever to assess your narrative reporting processes for their efficiency, scalability, security and effectiveness.
Modernizing how narrative reporting is done can not only save resources, it also can make your company’s story shine—no matter who your audience is. To learn how to reinvent narrative reporting, I invite you to download our white paper.
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