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Top 3 Reports Management Would Love to Have, But Can’t

Three reporting limitations make it impossible for management to make informed business decisions

Most senior executives have a plethora of business reporting Reporting ERP software blog imagetools available for almost all areas of their business. The cruel irony is that despite all these different reporting tools, very few senior executives have access to the reporting information they actually want or need.

More often than not, the report they really want is actually a compilation of several different reporting resources rolled up into an Excel spreadsheet.

The problem is that this spreadsheet report is often an inaccurate snapshot in time and there is no way of actually drilling directly into the data that feeds the report to validate the summary information. The executives are now forced to either make decisions incorporating a “fudge” factor into their decision making process or delaying the decision until someone can go back to the source data and extract or validate the detailed information.

Fudge is right.

With all these different reporting resources available, why can’t senior executives get the reporting information they really need in order to make informed decisions?

In most organizations, the source of the reporting problem is that information is “siloed” within different business software applications: CRM, project management, help desk software and financial accounting software. There is a consistent correlation between how many hand-offs there are between different business software applications and the areas where senior management cannot get the accurate reporting that they want and need.

  1. Executives need accurate forecasting reporting but can’t get it

The sad truth is that most senior managers believe that a good portion of their current sales forecast reporting is more "fudge" than fact.

One source of the forecasting accuracy problem is that the opportunity forecast data is maintained in one software application and the quoting process happens somewhere else. The end customer seldom goes with the first version of any quote. It’s more likely that they'll go through 3-5 quote revisions before making a decision. That means the salesperson needs to update their sales forecast 3-5 times for each of the 20-30 active opportunities they're working on at any given time.

So the likelihood of the forecast being accurate at 2:00 pm on a Thursday is almost zero; the typical "fudge factored" sales forecast is actually not that useful for real-world management team planning or decision making purposes.

Ideal forecasting reporting

The ideal sales forecasting reporting would have the Opportunity forecast data and the Quoted Bill of materials, labor and support estimate data all in the same system. The system would then automatically update the Opportunity revenue, margin and labor resource forecast in real-time, each time a new quote revision went out. This would eliminate the administrative burden on the sales team of constantly manually updating their sales forecast and give senior management the confidence to make decisions based on an accurate forecast vs. the "fudge factored" sales forecast report they’re used to looking at.

Since the forecasting would be at the detailed BOM, labor and support estimate level, management would also be able to slice and dice the forecast not just by rep by opportunity, but also by line of business, manufacturer, product type, etc.  providing the granularity to actually make the sales forecast useful for real-world planning and decision making purposes.

  1. Executives need mid-project profitability reporting but can only see project performance once it is too late

Many organizations would love to create incentives for their project managers based on project cost against budget, or project margin performance, but they can’t actually give the PM’s the data/information they need in a timely manner in order to be able to hold them accountable for project profitability performance.  In fact most PM's find out how their projects performed against the original target margin AFTER the project closed and it's too late to do anything about it.

Ideal mid-project profitability reporting

The ideal mid-project profitability reporting solution is where the detailed BOM, labor and support estimates automatically come across from the Quote to the project and becomes the Project's starting budget. As actual material and labor is consumed, the actuals should be compared to the original estimate in real-time.

This connection between “what we thought was going to happen” and comparing it to “what’s actually happening” in detail and in real time is what would allow project managers to get early warnings of where a project might be off track and they would have the detail to know exactly where the problem was coming from. This would enable them to take early and specific corrective action to keep the project on time and on budget.

This same connection would also make it very easy to cycle any implementation lessons learned back into the quoting process.

  1. Executives need detailed company revenue and profitability reporting but they can’t get the granularity they need

Although the management team can get overall company revenue and profitability reporting through the financial accounting system, the challenge is that it is hard to get the granularity to know which parts of the business are under-performing and which parts of the business deserve further resources and investment based on their profitability.

The detailed company revenue and profitability reporting problem

Some companies use their charter of accounts to try and provide more detailed visibility into the business. That can become a pretty manual process if a company has multiple lines of business. Sometimes the same product or service might be mapped to different accounts depending on which line of business, sales territory, or other distribution criteria would be called for in order to provide another layer of reporting granularity.

This level of summary reporting gives senior executives visibility into the overall performance of the business but makes it hard to gain insight into things like:

  • Who are the most profitable customers?
  • What was sold to them that made them the most profitable customers?
  • Which manufacturers or which product types yield consistently higher margins?

Without this granular visibility, it is difficult for the management team to make informed decisions about where to invest resources to grow the business.

The second challenge with relying on financial accounting reporting is that it’s usually at least one month or up to one quarter out of date. So, decisions being made now are being made based on data of what occurred several weeks or months ago. It’s kind of like driving a car and looking out the rear window for the next turn in the road

Ideal company revenue and profitability reporting

The ideal company revenue and profitability reporting would be if all of the detailed BOM, labor and support information were in one system. That would allow slicing and dicing revenue and margin by line of business, customer, manufacturer, project type, project, project manager, etc. in order to determine where the profitability leaks and margin opportunities were hiding.

Also, if the data was available in real-time decisions made today would be based on today’s data which would result in more accurate and timely business growth decisions.

Senior management needs accurate, up-to-date reporting at a level of detail that allows them to confidently make good business decisions

The reporting problem that most senior executives have is that their data is scattered across their organization and it’s a very painful and time consuming process to collect and verify, which results in an out-of-date snapshot in time with some “fudge” factor thrown in for good measure to make important business decisions . This is certainly not an ideal reporting situation for senior management.  But it doesn't have to be that way.  Click the link below to find out more.

By PROMYS PSA Anywhere - PSA software that integrates with MS Dynamics GP

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