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CIMA maps out the road to strategic business intelligence

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27th Oct 2008
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Are you stuck in the traditional accounting rut?The latest business intelligence (BI) technologies are making it possible for finance managers to take on broader, decision-support roles within their businesses, according to a new CIMA report. But are they taking advantage of the new opportunties, asks John Stokdyk.

The Chartered Institute of Management Accountants (CIMA) has been an enthusiastic proponent of the business partnering role of finance for many years and explored the topic in a new 50-page study, Improving decision making in organisations: Unlocking business intelligence

"BI has become the newest strategic opportunity," said CIMA chief executive Charles Tilley. "Not only does it have the potential to help inform decision making but it also frees up management accountants to help input even further into their organisations’ strategic direction."

BI has gone through an extended development cycle and dealt with issues around integrating data from disparate sources to become a mature technology that can cater for finance's reporting, analysis and performance management needs. At the same time, the finance function has evolved into a broader, more strategic role, according to Tilley.

"Changes are evident in the range and format of management information expected by decision makers, knowledge workers and operational staff," he said.

Many global organisations have embraced the new technology to transform their finance operations and BI is becoming cost-effective for a wider range of sectors and for smaller companies. Companies that do not take the opportunity to enhance their finance function with BI tools could be putting their competitive position at risk, according to the CIMA Improving Decision Making Forum, which contributed to the report.

But BI has also had its share of disappointments with stalled projects and organisational inertia where the tools are restricted to supporting accouting functions rather than wider decision-making. Many accountants "are still too immersed in producing traditional financial reports", the study noted.

The CIMA report highlights the cultural and behavioural challenges accountants need to overcome to break out of this trap. Rather than tussling with IT for ownership of the project, they need to collaborate on the wider business case, and finance needs to recognise and respond to the needs of sales, marketing and operational managers for relevant and timely information.

Why is BI failing to live up to the hype?

The battle for business intelligence, an article on our sister site Finance Week, explores the cultural barriers in more detail. It's right for accountants to take responsibility for getting the numbers right when BI data is compromised by unreconciled extraction processes or formatting quirks. But accountants who focus single-mindedly on producing management information are in danger of perpetuating the number crunching stereotype that accountants are scorekeepers on the sideline rather than players on the business team. "It limits their potential to take on business partnering roles," notes the CIMA report.

Many of the other issues raised have been aired before on AccountingWEB, including:
Who should control business intelligence?
Are you a player or a spectator?
Why sales reports have to be produced by an accountant
Over-reliance on Excel

The CIMA report Improving decision making in organisations: unlocking business intelligence (50-page, 1.4Mb PDF) is available along with previous reports and webcasts on the same topic are available from the institute's Improving decision making page.

See also
Improve your reporting skills with self-teach tutorials
Reporting tutorials: Use MS Query to extract and analyse accounts data
Sales analysis: The Northwind tutorials
Interested in pivot tables? Start here
David Carter's five-minute pivot table tips

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