Beyond Spreadsheets: Banks Seek Clarity in Reporting-Not Because of SOX, but for Business Reasons

One document retention consultant recently put it this way: "To run a public company these days, you need to have proactive, strong document-management practices in place for a variety of risk-management reasons." As reported in Wall Street and Technology, the consultant was, in part, referring to the more stringent data verification requirements of Sarbanes-Oxley. He went on to describe the range of preparedness in U.S. industry from the clueless--and concerned--to the admirably ready and unflappable. Certainly, many vendors thought that SOX would generate buy orders for a new generation of reporting tools and storage technologies, noted Sophie Louvel, an analyst at Framingham, Mass.-based Financial Insights, at a recent conference held by the firm in Boston. Yet banks are well schooled in the prying ways of regulators and largely view new regulatory demands as "more of the same." They may be incorporating some new IT solutions to handle the problem but hardly spending in record amounts. If only by coincidence, however, the SOX spotlight occurs at a time when a growing number of bankers are on the hunt for streamlined reporting "for business reasons," according to some of the experts interviewed here. "We don't see SOX as a big driver right now in financial services," agrees Richard Stark, director of financial management solutions for Actuate, San Francisco. "Generally, we don't even hear from companies that focused on reporting for reporting's sake as much as they care deeply about getting a clearer sense of their operational finances." Many hope to connect the systems that generate the P&L to those that record daily activity. The agenda? To cut back on manual re-entry, guesswork, and creative accounting. Mind you, this isn't the sort of creativity that lands execs in the "big house," but that which occurs routinely just to stay on top of the paperwork and meet reporting deadlines. As the U.K.-based research organization ButlerGroup recently wrote: "Conceptually, corporate performance management is relatively straightforward ... however, this simplicity belies the complexity needed to support the solution over time." Interest stirring Perhaps that complexity is the instigator of new demand--even if its all happening in a low-key way. Basically, bankers want "business performance management," "business intelligence," or "corporate performance management" solutions that can simplify key accounting processes. (This also accounts for the increased investment in customer relationship management solutions that have certain critical reporting capabilities in their mix, like customer profitability tools.) According to ButlerGroup, they also want to be able to understand historical events and anticipate future trends. What firms occupy this amorphous field? Actuate, Business Objects, Cognos, Information Builders, and INEA Corp., which are suitable for large companies and top 50 institutions. Business Objects and Hyperion are generally oriented to mid-sized to smaller companies. There are other niche players, depending on which analyst's report you read and how the solution is characterized. These players appear conceptually aligned if differently labeled. That is, they promise a way to automate reporting, bring it into real-time, and keep the numbers accurate. (It would be as if every spreadsheet in your company were to become magically connected to every other and the numbers could aggregate accurately in the process.) Richard Stark is quick to add that such a solution also offers select views of data that can offer clarity to line-of-business executives, comptrollers, or rank and file employees alike. Generally, tools offered by Actuate and its competitors support functions such as budgeting, forecasting, and reporting and analysis. These tools can also contribute to creating scorecards and dashboards around risk measurement. …