Despite decades of automation, business information and management information, many businesses still find themselves in a position where information does not enable decision-making or add value to the way the business is managed.
The misconception that an analysis-reporting tool will do it all is one of the reasons why businesses find themselves stuck. Tools which are implemented do not run on autopilot. There are data dependencies and ongoing maintenance either through consultants or in-house. Automation also doesn’t automatically improve what is measured and reported on.
Considerations before investing in a business analysis/reporting tool
When considering investment in a business analysis/reporting tool, bear the following in mind:
Upfront cost of the tool
This cost includes the software cost, hardware and implementation cost. Sometimes other software is required in the environment for the tool to function and these will have to be procured if not available already.
Ongoing cost of the tool
The ongoing costs consist of the cost to maintain and support the functioning of the tool. Typical ongoing costs are license fees, consulting costs, in-house resources and changes due to business requirements or enhancements. Very often reconciliations between various sources or data are required to ensure the integrity of information.
A certain level of skill might be required to maintain/operate the tool. If the skill is not available in-house, resources might have to be recruited or training provided.
What are the benefits that will be derived from the tool implementation? Will more data be translated into information? Is it automation of what is already available? Will it save time? Will it improve decision-making? Is the additional information required on an ongoing basis or only occasionally?
Is the person currently analysing data and reporting on it the right person? What are the alternatives to a tool? Does companies in a similar position invest in tools? What is the expected life of the tool?
Excel is rich in capability and accountants are very familiar with it. A number of tools has a similar look and feel or uses Excel as back-end. Evaluate carefully that you don’t buy Excel with a different name and some limitations.
Change and commitment
Key role-players must support the tool-investment and be committed to use it. Even if implemented successfully and cost-effectively, the ultimate return on investment will depend on how the use of the information settles with the users and decision-makers.