Departments
The View From Here
Transparency made clear
An EDW provides a complete view to help meet regulatory requirements.
by Samuel R. Schwartz
A successful business is akin to a living, breathing organism—it’s constantly changing and evolving. Adaptability is great for outsmarting the competition, but it can make it difficult for investors or chief accounting officers like me to maintain a clear, robust, complete view of a business.
Not only is our business changing all of the time, but frequent changes in accounting rules make it even more difficult for us to achieve and maintain transparency. As a result, we have to figure out how to measure performance and results while providing financial feedback for internal and external business needs.
That’s why an organization needs a single data repository—an enterprise data warehouse (EDW)—to meet legal requirements, to overcome challenges and to take advantage of opportunities. Among its many benefits, an EDW helps ensure financials can be married with other data to gauge performance against expectations. Stored once and used many times, a company’s data can meet the transparency needs of management, auditors, shareholders, customers and suppliers.
In focus
Transparency is important for external and internal requirements. To the external world, it means being succinct and explaining the choices you’ve made in accounting to investors so they can compare you against the industry, against the competition and against other industries. You want your investment community to know as much as it can about your organization’s performance, historically and prospectively, to sustain interest and value in your share price.
Stored once and used many times, a company’s data can meet transparency needs.
For government agencies or private companies, transparency can be just as important—it can help demonstrate proven performance or provide the right type of information flow to build confidence for potential investors, customers or citizens.
Internally, transparency is key to identifying measures of your business: sales performance, gross margins, operating profits, etc. It allows you to compare results with projections and understand the factors that can affect future outcomes.
Unfortunately, enabling all of this transparency isn’t always easy. As a business evolves, accounting and information requirements change as well, creating a substantial challenge.
That’s where an EDW comes in. Accounting systems primarily deal with financial data, but to truly understand how it relates to your business, you must marry it to operational metrics. These might include human resource and head count information, as well as performance and production metrics, all of which need to be joined with financial metrics to identify trends and react accordingly. An EDW empowers you to combine operational data with financial data, enabling you to access multiple systems and unite data for the best, differentiated decisions.
Building bridges
In the end, an EDW can mean the difference between merely providing raw data to internal and external communities and providing real, valuable information that lets them maximize their decision-making opportunities. The more analysis you can provide to external stakeholders, the more they will understand what drives your business. Internally, it helps you manage your business better. In a nutshell, an EDW delivers accurate and timely information to enable transparency for effective visibility.
Samuel R. Schwartz, CPA, is chief accounting officer and corporate controller of Teradata.
Photography by Ryan Ketterman