In my last article I looked at some of the essential planning related to ERP implementation team formation. I have walked through the planning challenges that should go into a Microsoft Dynamics AX project and explored the roles of implementation team.
In this article I will explore the different reporting needs and perspectives for each level in the organization. The main principles for reporting are reliability of business information and the ability to produce the right information at the right time for the right person. Reports that analyze ERP data in a meaningful way represent the output of the ERP implementation; it is considered the cream of the implementation, the next level of value that solution owners should aim for. This ideal outcome results from building all reports based on a single information source – the ERP solution where the business is recording all transactions on a daily basis.
Organizational reporting levels are divide into three main layers: Operational Management, Middle Management, and Top Management. Each level has a different perspective of report usage, whether tactical/short term usage or strategic/long term usage, and a different opinion on a report’s complexity.
Operational management requires the monitoring the performance of each sub-unit and managing individual employees. That requires that report scope is narrow, with detail to the lowest level of information (transactional level).
Middle managers are concerned with internal firm performance, including revenue and cost management, resource allocation, and the development of short term plans. They require the reports with a scope focused on aggregate, summarized transactional information. These reports cover specific periods – weekly, monthly, quarterly, half year, and yearly performance.
Concerned with strategic decisions that affect long term plans, future performance, and overall firm objectives executives require reports with a broader scope to get more comparisons, actual vs. budget, period comparisons, and key performance indicators (KPIs).
The type of decision making used by an organization is another dimension of reporting analysis. Typically, decision making styles can be described as either structured, semi-structured, or un-structured.
● Structured – Repetitive and routine decisions. Best used in the operational layer
● Semi structured – Mix between structured, and unstructured decisions. Best used for middle management layer
● Un-structured – Decision makers at the executive level must provide judgment, evaluation, and business insights to evaluate the overall business performance
Planning for proper data entry
The Dynamics AX implementation team should tackle management’s reporting needs in the analysis phase with a particular emphasis on exploring the data required to build the reports. Those data needs should then be cross-checked with the actual data entry activities that end users will perform to ensure that business users will get the required information from the reports.
On many projects there are no pre-defined reports except the basic financial reports (trial balance, income statement, and balance sheet) are in place during the analysis. After going live on such projects, the implementation team discovers a need for more data and begins chasing the required information inside the system by adding the missing information, adding fields, and re-designing the data entry process. That may lead to increase data entry time, adding more steps for validations, and the surprise discovery that there are not enough end users resources to execute the updated requirements. So there should be a balance between the amount of required data entry that directly affects report quality and the number of end users resources who execute the data entry process.
Another caution – consultants may realize that some transactions are executed by one resource and normally these transactions are executed by two or three resources to achieve the segregation of duties and control. In this type of resource constrained situation, these two concepts are breached, and the ERP solution is negatively impacted for the end user and process owner. But in these cases the root cause of the issue is not the ERP functionality but the lack of allocated resources.
There are two other important concepts of reporting: pulling reports and pushing reports. The pulling of reports refers to the active requesting of reports by operational managers for the lowest transactional level for purchasing, warehousing, sales, marketing and financial entries. The middle management layer will pull reports to serve procurement, commercial/sales, and controllership.
Pushed reports deal with the Business Intelligence (BI) capabilities that serve the top management, offering KPIs, Balance Score Cards, and analytics/comparison views.
Microsoft Dynamics AX 2012 R2 and the supporting Microsoft technology stack offers a variety of reporting capabilities, including the ad-hoc reports for transactional level developed by Microsoft Excel 2013, Excel Services, and Microsoft SQL Analysis Services (SSRS). Microsoft Dynamics Management Reporter offers to the controllership in middle management the ability to create and run financial reports. And for Business Intelligence (BI), solutions built for Dynamics AX customers should begin with Excel Power View, SQL Server Analysis Services (SSAS), and Performance Point Services in SharePoint.
In a future article, I will discuss more specifically how BI solutions can be applied to the various transactions, business processes, and comparative measures and dimensions of an AX solution.
User Group: Dynamics Arabia