There’s a theory that the invention of the telephone in 1876 revolutionized business management. Until then, business owners had to be, at most, a quick carriage ride away from the factory. That way, they could see immediately how things were going. Once they had phones, they could move far away and get reports remotely from someone who was on-site. This was probably the origin of today’s unceasing desire for reporting about the state of a business.
Indeed, today’s business managers expect to see accurate information about how their businesses are running. And, they want it to be as up-to-date as possible, preferably in “real time.” Data about the financial and operational condition of a business should ideally be available instantly. Making that happen is not as simple as it looks, though advances in financial and ERP systems are making it easier all the time.
Why do you need real time visibility in your business?
Is anything in your business really important enough to know about it the second it happens? It depends on your business, probably. If your entire business involves importing shiploads of gravel, you might be able to live while waiting a week or two for operational data. In general, though, the sooner you can see all of the relevant aspects of your business in a meaningful presentation, the better it will run and the more profitable it will be.
Most business are sensitive to seemingly minor events. For instance, if inventories climb, that might signal a sales slowdown. If you don’t catch it in time, you’ll be burning cash to create a warehouse full of things that won’t sell. What’s different with inventories today, however, from even just a few years, is how fast market cycles move—and how complex the supply chain has gotten.
It’s optimal to get information in real time about rising inventories, supplier shipments, market conditions and order data. Presented in a coherent, context-rich reporting interface, these data points can highlight an incipient problem early enough for you to take action. The opposite is also true. If you either don’t have the data handy or you miss the signal, you’ll have to deal with the business consequences.
Elements of real time visibility into your business
Real time visibility into your business comes from instant presentation of financial and operational data. Not all of it—that would be overwhelming and counterproductive. Rather, based on your unique parameters, you need to create reporting dashboards that show what matters to you. This might mean showing profit and loss (P&L) or cash flow in real time. Or, you might need to see account activity, accounts receivable or balance sheet data in real time reports. Managers of service-driven businesses might need to appoint bookings and so forth.
How to build real time reports
Modern financial and Enterprise Resource Planning (ERP) software comes with preset reports. Presented live on screen as “dashboards,” these reports can give you instant visibility into the data flowing through the system. This, however, is not always the best real time data for your business. There are two reasons for this potential deficiency. For one thing, just having a report for accounts receivable, for example, may not be detailed enough to be useful. Or, it might not offer the right time frame to be meaningful. Alternatively, in order for the report to make sense, it needs to be plotted in real time against another data stream, such as orders in transit.
The software’s ability to enable flexible reporting like this is absolutely critical. The software’s integration capabilities are also essential. Many data points relevant to your business come from systems other than your financial/ERP solution. They might even originate outside of your business altogether. They could come from your suppliers, for example. Your tools for real time data have to be able to integrate and change easily enough to keep the data in front of you meaningful.
To learn about how IProERP can help you with real time visibility into your business, visit https://www.iproerp.com/.