Using BI tools to turn information into action. (Special Report: Business Intelligence).

At the core of business intelligence (BI) is the ability to efficiently access and analyze corporate data in ways that look between the rows and columns on a spreadsheet. Today's tools have morphed from highly complex systems, understood only by the finance department, to simple but powerful software solutions allowing anyone in the enterprise to create reports relevant to their view of the business.

While technology can't fix ethical problems, it can help financial management keep up with today's pressures of speed, complexity and legal requirements to ensure financial integrity. It's not enough to focus solely on regulatory reporting. The latest BI solutions are taking a step up to provide all the information management needs to run business smarter.

Getting Data to Pull its Own Weight

A typical company harnesses only 2 to 4 percent of the data that resides in its systems, notes IBM Corp. The rest sits in databases and is never touched. In the 1990s, companies sat on gold mines of data silos and distributed data marts filled with inaccessible information.

Getting an up-to-date report required chasing information from multiple departments and relying on finance to do the analysis. This inevitably led to time delays, and left corporate decision-makers to ask questions such as: "Where are all the details relevant to my current situation? Is this information accurate? What can I learn from it?"

Consider the many functions within an organization -- human resources, marketing, IT -- each with its own unique activities and data sets. Managers and departmental users need the ability to capture an accurate picture of this data across the organization. Historically, finance has been the only department with access to consistent details about a company's latest reports. The challenge lies in translating this expertise to the rest of the organization and turning transactional data into a user-friendly tool for strategic decision-making.

Another problem is the misuse of spreadsheets for decision support. Today, many billion-dollar enterprises are still relying on spreadsheets to produce budgets, forecasts, revenue reports and other financial statements.

Spreadsheets are fine for individual modeling and reporting, however, these tools have limitations. They are inherently vulnerable to errors, which increase with the complexity of the model. A simple data entry error could throw off a large program by millions of dollars.

Most notably, spreadsheets don't account for uncertainties or offer the ability to drill down to the transactional level of financial data

-- a potential problem when corporate executives can be held personally liable.

Today, BI tools require more than financial data. It is critical that they provide the necessary tools to measure and evaluate business data from many perspectives.

Analyze This ROI Rate

With the corporate landscape plagued by fraud, accountability issues and a lack of investor confidence, there's never been a more important time for companies to demonstrate that they can be trusted. The latest BI solutions offer financial managers the necessary tools to relieve the pressure.

Research conducted by IDC indicates that on average, analytics projects yield an average return on investment (ROI) of 140 percent. In IDC's most recent survey, respondents said they had realized returns ranging from 39 percent to more than 2000 percent on BI initiatives. The average five-year ROI was an astounding 317 percent. Given the long list of benefits -- including faster cycle times, more efficient financial reconciliation and overcoming data inaccuracies -- ROI can be easily achieved with today's BI software, which contain the following features:

* Integration

Most corporations use a multitude of systems to collect and manage their data. Information stored in one database is often duplicated in another department's system. Which is the most accurate? With the data constantly changing, how does one ensure its integrity for effective decision support? One solution is to integrate strategic, financial and operational information in a common database. This ensures data consistency and permits input from different business units for a 360-degree view of the enterprise.

Disparate data is meaningless until it can be aggregated, cleansed and placed in the proper context in order to answer questions and provide analysis. For instance, combining customer names and ages with their income and buying history can help a company forecast future spending patterns.

An integrated system enables companies to plan, monitor and analyze their entire business cycle from financial, operational and strategic perspectives. Users at all levels of a corporation gain access to pertinent information from various departments for more effective decision-making and can harmonize financial and non-financial information through a single source.

* Real-Time Data 

In the current business climate, the pressure is on to disclose accurate financial information as quickly and as frequently as possible. In this push for a real-time enterprise, executives are demanding faster, upto-the-minute access to corporate data.

Today's BI solutions not only alleviate pressures in the finance department, but also provide real-time information to front-line workers. Now, anyone in the organization can analyze information by drilling into more detailed data and sharing the findings with colleagues and partners.

Consider the benefits of real-time analysis for, say, the sales and marketing functions. Executives can utilize real-time data to alert each other when a customer might be ready for a cross-sale or upgrade. With the ability to analyze this information, sales and marketing can monitor the effectiveness of their efforts and instigate changes when necessary.

* Web-enabled Solutions

John Van Decker, senior program director with META Group, says, "Intercompany reconciliations have and continue to be a problem plaguing most large global organizations today. Although most of the barriers to a faster close are of an organizational nature, technology can be leveraged to support change." By using the Web to leverage BI tools and manage the flow of intercompany information in real time, multinational corporations can shave days off the financial reporting cycle.

Some BI solutions enable reporting units to reconcile balances directly with each other over the Web and deliver real-time agreement of balances before financial reports are due. This means that reporting units are no longer reliant upon an overstressed central finance function to handle reconciliation, and the corporate level can trust the individual units to do it quickly and accurately.

Streamlining the financial reporting process enables finance professionals to focus on higher value-added functions like analysis, benchmarking, forecasting and strategic planning.

BI tools are not meant to make the critical decisions. They are meant to provide visibility into a business for more informed decision-making. By correlating data and presenting it in multiple ways, these solutions provide a means to identify business patterns that might otherwise go unnoticed.

While today's solutions are already showing their worth through financial planning and analysis, the future holds much potential to expand this value across the entire enterprise. Simply put, with BI tools, corporations hold the power to drill down into data, spot market trends, analyze processes and gain a competitive edge. By using solutions that are Web-enabled, integrated and provide real-time data, companies are indeed turning information into action.

Bob Fitzgerald is President of Stamford, Conn.-based Cartesis Inc., a wholly owned U.S. subsidiary of Cartesis SA, (www.cartesis.com) for which he serves as Executive Vice President Global Operations, Northern America. Cartesis is a worldwide supplier of financial analytic applications for Strategic Financial Management TM (SFM) headquartered in Paris.