It sounds an appalling prospect, yet it is arguably how many UK companies still operate when it comes to converting accounting data into meaningful information and performance indicators that management can use as the basis for decision-making. The data is all there in the accounts department but, like the motorist without his instruments, management has no way of accessing it when they need it.
This problem was highlighted at a recent press conference by Richard Hawksworth, UK marketing manager of Hyperion Software (formerly IMRS plc, the company has a string of blue-chip commercial and industrial customers) when he unveiled the company's latest system development plans: "Traditionally financial software offerings have focused on the horizontal layers of the accounting and finance function, from individual ledger applications at the bottom to financial management at the top.
"However, organisations need to be both run and managed - they need timely, accurate and consistent access to the business-critical data at transaction level and the mission- critical information at summary level. In large, complex organisations there is often a hiatus between the delivery of accounting information and its use as a strategic decision-making resource. What is lacking is a solution that melds the two into a single flow."
Bearing in mind Hyperion has new software to sell and an aggressive agenda to pursue - it aims to become one of the world's top suppliers of client/ server accounts systems before the decade is out - it is tempting to dismiss these comments as just so much marketing hype. But Hyperion is not alone in expressing concern about the problems management faces in getting hold of useful information.
This view is echoed by Robert Hobbs, managing director of InPhase Software: "Raw data by itself is of no value to the business decision-maker unless one can turn it into information that can be viewed and analysed from any dimension. We are data rich but information poor."
Or, in other words, management is unable to see the wood for the trees.
What InPhase, Hyperion and a growing number of other software companies are proposing as a solution to such problems - a way of overcoming this hiatus between the delivery of accounting information and its use as a strategic decision-making resource - is wider use of a type of computer application known as the executive information system, or EIS (also known as MIS, or management information systems).
Although the concept is not new, the spread of increasingly sophisticated PC and Unix networks means today that not just large but also medium- to smaller-sized businesses can now seriously consider implementing EIS applications. Indeed, organisations that have gone down the EIS route in recent months include enterprises as diverse as National Savings and Lloyd's underwriting syndicates.
But what exactly is an EIS system? Probably the simplest explanation is to see it as a corporate dashboard - an analogy first coined by the computer industry analyst Robin Bloor.
Thus, instead of the traditional horizontal approach to financial and accounting software, with EIS management can "drill down" from a high level to see what is going on behind the scenes and uncover the trends underlying performance. Furthermore, once an EIS is set up, management can continue drilling down through data - the term used is "slice and dice"- to go from a macro overview to the micro detail level.
For example, in many organisations age debtor analysis is a key business indicator, so with an EIS system in your first "slice", you could drill down to view and compare the debt figures for all branches and departments, to see whether you had a general or localised problem. If one department did stand out, then you could drill down further, if necessary "slicing and dicing" to the point of identifying the individual customer, salesman or invoice where the problem lay.
Admittedly, this information has always been available in theory, but in practice management has usually faced delays while administrative staff either dug out the details or in some cases even had to have new software written to produce the reports.
By contrast, with EIS the people who need to know information can have it when they need to know it and be certain it is up to date. In fact, EIS routines can even be set up to run automatically and alert management when set performance criteria fail to meet preset targets.
In talking about the need to adopt a new approach to accounting and financial software design, Hyperion may be one of the first to recognise the importance of combining in one package EIS functionality with conventional horizontal ledgers - but it certainly won't be the last.Reuse content