Information Islands

Clever spreadsheet gurus can build budget models in Excel but the data can only be available in the original view or perspective. What happens when a different perspective is required? More spreadsheets and links need to be created.

Re-forecasting creates another set of issues. Comparisons between Budget and Actuals are easy, but the story behind the numbers is somewhat difficult to extract. So most organisations then extract to Excel, create stand alone forecasts and "management sheets" and the vicious Efficiency cycle begins again. Sub sets of information exist randomly across the organisation as each line manager begins storing and hording pertinent information.

Some organisations have invested in Business Intelligence tools or stand alone budgeting systems to extract and manage their data. This leads to more “information islands”

Information Islands:

“Information Islands” is the term we use to describe the all the segregated sub-systems that are created as a result of the above process.

There are many excellent applications that create better analysis or better reporting or efficient budgets or better cash flows. Making the information gathering process more efficient is certainly a goal to strive for but what is the point if those insights are horded away in someone’s personal files. Enhancing the reporting function just leads to more information islands.

The typical example is the sales forecast.

Often, high level sales forecast numbers (in dollar terms) are presented by the sales department to finance where a high level GL based forecast is created for planning and cash flow purposes and passed onto the CEO. But who informed logistics about the latest promotion and associated inventory requirements?

Click here to enlarge