The Problem
Two of the biggest mistakes or challenges that companies face with reporting is the proliferation of reports and the creation of new variable definitions. These two challenges actually can be mutually reinforcing: as we create new reports, it is likely that we will see people creating new definitions of variables. Instead of improving information flow and decision making, they cause confusion and uncertainty.
In my many years of leading advanced analytics at Accenture, we saw clients having multiple definitions for key measures variables and no single definition that everyone aligned to. A dramatic example was when a major client had multiple definitions of profit within a single corporation. Consequently, with people using different definitions, where each selected or created their own preferred definition, challenges arose as to what was the right number. This lack of clarity caused people to sometimes make decisions that were counterproductive. I still see clients doing this in my current role in the work force management space.
The proliferation of reports often exacerbated the challenges of measures with multiple definitions, because each group was able to create reports that reflected what they felt they needed to know. The decisions that appeared to be supported by their data often made the overall situation worse. Interestingly, because others in the company were able to create and track data using different definitions in their own reports, the problem commonly went undetected. Often when we were brought into companies to look at their reporting outputs, reporting processes, and reporting strategies, we were able to solve the problem by aligning on common definitions — which reduced, sometimes by 80% to 90%, the number of reports the organizations were using to run their businesses. The impacts were often substantial as situations became clarified, which enabled better decisions based on fewer reports and clearly defined measures. Outcomes of the changes and the impacts could be easily understood and measured. Not surprisingly, over time we would see the number of reports and measures regrowing, to the detriment of the organization.
The Solution
Avoiding this situation from ever getting started is obviously better. Here are some practical ways to approach this:
- Developing a parsimonious set of variables that will be used, aligning on a common shared definition, and understand all the reporting that would use the variables is obviously a massive improvement.
- In addition, prototyping the reports beforehand could allow companies to work on assessing the impact and value of a particular reports, and evaluating its usefulness before it is built out. If you start out with this approach and a system to coordinate variables and reports, organizations can avoid the labor needed to build unnecessary reports and measures that really should not be created in the first place. It also avoids needed periodic evaluations that normally review and cull many of the reports.
Being able to track effectively all the places where measures are used in reports and a well-defined set of variables reduces the likelihood that multiple definitions will be created for a measure, which helps the organization focus on a common “right set” of measures. Having the ability to organize and know what measures are used in what reports, and what reports exist, when you are beginning, or even if you were down the road in your reporting, increases the likelihood of avoiding the problems mentioned above. This will allow your organization to support improved decision making based upon a common set of metrics.
