Challenges in Management Reporting Marc Franzen Senior Manager, Finance Advisory, KPMG

Transcription

1 Challenges in Management Reporting Marc Franzen Senior Manager, Finance Advisory, KPMG

2 AGENDA Management reporting in a changing world Big Changes: Selected changes Summary and outlook

3 REPORTING IMPROVEMENT POTENTIAL Reporting Management and Controlling are not content with the current reporting state. Extent Relevancy of control Reference of future / Content with current reporting (%). Source: KPMG, Reporting Design 2012

4 GRADUAL CHANGE IN COMMUNICATION AS A CHALLENGE Today s communication Google Twitter Facebook Flickr Twitter YouTube Xing Apps Smartphones/ Tablets Apple Watch Google Watch/ Glasses Today s Management-Reporting pdf Print report Excel Online via Frontend Mobile Reporting Source: KPMG, Reporting Design 2012

5 MAJOR DEVELOPMENTS IN NEXT GENERATION REPORTING Management-Reporting Agenda 2018 Relevance What are the requirements of the report recipients and how can these increase the report s value? How can the requirements be fulfilled efficiently? Value added Which new technologies will dominate and what benefits will they create? What are the related risks?

6 AGENDA Management reporting in a changing world Big Changes: Selected changes Summary and outlook

7 THE FIVE CORE ISSUES OF NEXT GENERATION REPORTING KPIs Predictive Big Data Mobile Lean

8 Not everything that is countable counts and not everything that counts is countable Albert Einstein

9 THE COMPLEX REASONS FOR DEFICITS IN KPI REPORTING Number of KPIs KPI system type Single key figures Top-down driver tree Bottom-up system Max. Ø % Business model reflection Cost structure Revenue model or sources Key resources Customer segments Key activities / processes Distribution channels Customer relationships Cooperation % Source: KPMG, Reporting Design 2012

10 FOCUSED STEERING LOGIC AROUND THE TOP KPI Deriving KPIs based on strategy and business model Top-KPI Claim Leadership Earnings figures financial, multilevel Drivers and steering figures Raw material prices Macroeconomic development Sales Supply Chain Production Procurement Infrastructure development Political framework Extraordinary events Change of business model Strategy and ownership structure Financial steering model: Top-KPI, DB structure, transparency requirements Sector and business model specifics Functional and process specifics External market factors

11 STEERING HAS TO FOCUS ON THE RIGHT KPIS Reduction of effort in planning and reporting Focus and transparency Highlight dependencies and impacts Reduction of information quantity will facilitate the prioritization of operative activities and measures and reduce the effort for planning and reporting significantly Consideration of specific business models for KPIs and value drivers will facilitate the integrated, transparent and consistent presentation of information Logical and analytical conjunction of KPIs and value drivers will facilitate detection of connections and increase the decision quality

12 Early detection of impact will be incremental for the future of companies

13 THE MARKET VOLATILITY REQUIRES AN INCREASED ATTENTION TO EXTERNAL KEY PERFORMANCE INDICATORS How would you assess the influence of the following KPIs to the controlling? [answers in %] Internal finance KPIs Internal non-finance KPIs External KPIs: market, competition, economy Should be higher Perfect Should be lower Source: KPMG, Reporting Design 2012

14 FOR A BETTER INSIGHT IN TO THE FUTURE DIFFERENT TOOLS FOR DIFFERENT PERSPECTIVES HAVE TO BE USED FUTURE Forecasting Monitoring Scanning Method KPI Indicator Weak signals Development Internal Internal and External External Target Prediction of the characteristics Monitoring of the development Notable trends and drivers Examples Financial forecast Non-financials, Economic indicators Business climate index Consumer behavior, Trends Sociocultural developments Views, ideas, visions Source: KPMG, Reporting Design 2012

15 PREDICTIVE ANALYTICS AND SIMULATIONS WILL INCREASE SIGNIFICANCE AND PREDICTABILITY IN REPORTING Use of statistical methods Big Data analytics Construction of projection models Value added by Predictive Analytics Stochastic and statistical methods in real time Pattern based detection and explanation of trends and developments Detection of cause-effect relationships through analysis of big datasets Identification of unknown influential factors Construction of projection models including external and internal factors Increase potential of planning and reporting Generation of competitive advantages New opportunities to steer the business Recognition of unknown patterns and coherences Source: KPMG, Reporting Design 2012

16 BIG DATA: Everybody talks about Big Data but no one really knows how to cope with it. Above all everyone thinks that anyone is doing Big Data and asks themselves how to approach Big Data!

17 FOUR V CHARACTERIZE BIG DATA Volume Variety Velocity Value Huge amounts of data Structured and unstructured Realtime available Unsecure and complex

18 BIG DATA WILL GAIN ACCEPTANCE FOR STEERING BUSINESS 2014 Big IT vendors offer instruments to use Big Data (e.g. Microsoft, SAP, IBM, ) First Big Data instruments are offered within corporations (mostly annually use cases) First examples to facilitate operational processes are used First mover develop Digital Strategy, many companies build first pilots Digital Transformation will lead to a disruptive change in the use of data within companies Companies that use big data with a global digital strategy will have comparative advantages

19 BY 2018 REPORTING WILL HAVE ADVANCED SIGNIFICANTLY Future orientation Data variety Flexibility Connectivity Enabler: Analytics tools and In-Memory-Technologies

20 Every tenth company uses mobile reporting but every fourth is planning to implement mobile reporting.

21 MOBILE REPORTING RUNS THROUGH DIFFERENT STAGES OF DEVELOPMENT Specific form and content; new IT architecture Specific form and content; existing IT architecture Existing form and content; existing IT architecture Convenience mobile reporting Smart Mobile Reporting Smart mobile reporting Intelligent mobile reporting Comfortable working New opportunities New areas of application

22 MOBILE BI CAN BE MORE THAN NICE TO HAVE Context-sensitive deployment of data Intuitive analytics and functionalities Focussed presentation of information Omnipresent data availability Value added through Mobile BI Active provision of focused information depending on time, location and devise Decision support within business processes Design of data facilitates consumption of information Intuitive handling reduces barriers of usage and raises establishment App paradigm enforces focus on relevant information Focused design Focused information Location Independent work Constant availability of information Steering information is available at the place of decision making Establishment of information based steering

23 Reporting is the most sophisticated process in the controlling department and binds 25% of the resources

24 REPORTING HAS TO BOOST EFFICIENCY IN THE NEXT YEARS Data provision Report generation Analysis and consulting Data collection Data conditioning Report generation Plausibility check Analysis Consulting Efficiency boost through Reporting Center, Standardization, Automatization, Centralization Effectivity boost through Business Partner Source: KPMG, Reporting Design 2012

25 AGENDA Management reporting in a changing world Big Change: Selected changes Summary and outlook

26 CHALLENGES IN MANAGEMENT REPORTING KPI Models: Simplification of Reporting Predictive Analysis: Integration of Simulations and Forecasts Big Data: Impact on Management reporting and analysis Mobile BI: Functionality Improvements through online collaboration Lean and efficient Reporting: Standardization, Automatization, Centralization