Have you ever wondered what your board really thinks of those reports you sweat over every month? In this article, I explore what corporate information boards really want, and why business intelligence (BI) obtained via Microsoft Dynamics ERP and CRM systems drastically helps improve board reporting, and ultimately, board effectiveness.
Board members are usually time poor, and often sit on several boards. When they come together, they need a reliable board report that tells them immediately what they need to know, so they can better spend their time strategizing and adding value to the business. The truth is, most boards are not entirely happy with the quality, timeliness and accuracy of the corporate information they usually receive. Making the most of your board reports, and what is required of them, need not be a futile exercise, though. Understanding the board's concerns is the first step toward improving its effectiveness, and ultimately the board's capacity to focus on improving your company's strategy.
Accuracy of data is one of the most common gripes about board information. It's not unusual for boards to receive information in huge slide decks, or complex spreadsheets that have been pieced together manually from multiple data sources. The minute a board member finds an arithmetic error, it suggests your numbers can't be trusted. You've lost the confidence of very important people. The board members are then forced to conduct their own data checks, which wastes precious time better spent elsewhere.
How does BI help? It ensures that corporate data is analyzed and reported on while still connected to the corporate data source, not taken offline and manipulated manually. BI eliminates the need for disparate, disconnected spreadsheets, where the propensity for errors grows every time data is exported.
Timeliness and consistency of data are other common complaints. Your board wants the most up-to-date information, delivered in the same format within the same parameters, each month. When data is dated and inconsistent, your board can lose focus. With BI, you can set up report structures that are automatically refreshed with the latest corporate data, which means reporting is consistent and timely. You can even set up entire board report packs in this way, so all you have to do for each report is update the explanatory text - the rest is done automatically.
Are you guilty of providing too much information? Relevance is another common complaint - most boards only want a high-level view of performance, not in-depth detail that could sideline their attention. For example, boards typically only need to see the overall pattern of your sales pipeline, not details of individual deals. Keeping your board happy is not about increasing information, it's about having the right information. Many boards might apply the ‘so what' test to details of day-to-day departmental activities, but they do want to know where the risk lies in the business. For example: What proportion of revenue is tied up with the largest customers? What are the aged debt patterns? What is the variance between budget and actuals this month vs last month, or year on year? What is the cash flow forecast?
BI is geared toward providing high level, visual pictures of performance, such as dashboards and scorecards that can be understood instantly, but can also be drilled down for more detailed information when necessary. BI also enables data to be sliced and diced via any dimension, so that results can be examined from numerous perspectives.
When board reporting only focuses on financials, the focus can be too narrow. Most boards want other barometers within the business, such as staff turnover, employee satisfaction, customer loyalty, and demand generation. This is where BI's ability to bring in information from multiple business systems plays an important role in presenting a united overview of performance.
The opportunity is there to create an open dialog with your board to review the information it is receiving, compared to what it really needs. How much time are you currently wasting producing information the board doesn't really want? How effective can your board be with the quality of information it's receiving? And how equipped are you to deal with the rigors of board standards? If you're pulling information from corporate systems such as Microsoft Dynamics and manually manipulating information offline, the answer is not well.
BI is usually discussed in terms of how it helps internal decision-making, but it can also drastically improve the quality and reliability of corporate information provided to your board. For those who are involved in preparing this information, BI most valuably cuts down the time needed to prepare it. For the board members consuming the information, the consistently trustworthy reports from a well-planned BI solution put the right information into focus and build confidence in a company's execution.