Digital Corporate Management

Companies today not only face the challenges of adapting to changing markets. In addition, there is currently a demand for an economy characterized by greater sustainability, which is also expected to lead to major changes. Increasing digitization is just one of the dynamically developing framework conditions to which new solutions, products and services must also be adapted. In this context, it is becoming increasingly important to keep a close and detailed eye on a company's figures and to take them into account in corporate management. 

To this day, companies are still controlled by means of figures, as they are typically provided by special reports but also by instruments such as the balance sheet or income statement. The data of the company are mostly considered in their 'classical' accumulations. This means that the reports of the companies evaluate accounts rather than individual documents, refer to general ledger accounts rather than personal accounts and access financial accounting rather than sub-ledgers (subsystems, upstream systems).  

Medium-sized companies: Precise control...

Here, there is a sometimes considerable discrepancy between the tools that digital data analysis can provide today and the tools as they are actually used today specifically for the global view of companies. This article aims to highlight opportunities to gain new global views of companies. In doing so, we will focus primarily on two points in this article: the visual representation of results and the use of maximally detailed and not just aggregated data in data analysis. With the focus on these two points, we want to present exemplary tools of a new type for central functions, such as corporate management or even the auditing of companies.

... needs a digital compass

Future-oriented corporate management should be digital. It should access data from a central ERP system, but also data from other systems in the individual business units, as well as relevant external sources of information. This approach represents both a new perspective and a challenge for many companies. Today, companies have to make well-founded decisions more and more quickly. Decisions require a precise view of the underlying data. This view is all the more precise the more detailed the data used. This means two things: aggregated data cannot replace detailed data at will, and without digital data analysis, the volume of data can no longer be processed, even in medium-sized companies.

The whole and its parts

Digital data analysis is not an end in itself. It is not a matter of somehow reprocessing all available data along the path of data analysis. Rather, it must be ensured that the scope of the data relevant for a report is really suitably selected. At the same time, it cannot be ruled out from the outset that deeper data layers will have to be included in an analysis in order to arrive at an appropriate statement. In this sense, the data basis of reports used for corporate management should not be limited from the outset to the level of general ledger accounts.  
 
The inclusion of deeper data layers in an analysis also raises the question of the granularity of the results. The analysis of a company's debtors can be based on the data of general ledger accounts (receivables/payables). However, the analysis can also be based on the individual customer accounts or the associated posting documents. If you want to generate a single result per debtor in an analysis and at the same time have a compact, clear presentation, graphical depictions are the means of choice.  
 
Since medium-sized companies now also have group structures, it is also necessary to compare results between group companies or regions in order to manage the company. 
 

Visualization: Transparency down to the core

Graphical presentations provide a good overall view of a topic. In relation to figures derived only from general ledger accounts, for example, graphics based on more detailed data show the forest and the trees at the same time, so to speak. In this way, many informal messages are also conveyed, as they are particularly important for corporate management. As in science, the analysis of such graphics can also lead to the confirmation or exclusion of explanations and hypotheses for important topics in companies. But it can also lead to completely new considerations. Information can also be gained from looking at graphs in terms of how they change over time or by comparing them between different subdivisions of the company (benchmarking).  
 
It is always crucial, also for corporate management, that structures exist in the considered granularity that change rather slowly in the rhythm of the considered time intervals. It is just as important to identify patterns before comparing subdivisions of the company that should actually exist everywhere ('no tree has too many leaves').  Even if such graphical patterns can only be described informally compared to, say, key figures, they can still prove to be a powerful tool. The fact that a cluster in a graphical evaluation has changed its shape and position to some extent over a certain period of time is one of the weak signals that can be acted upon even before the hard numbers speak an even clearer language. Interactive graphics software allows further analysis by direct graphical access to spatially adjacent objects ('lasso technique' etc.). With 3-D technologies such as data glasses, further developments are just around the corner.  
 

Consequences for medium-sized enterprises

In the environment of these considerations, there are great opportunities for medium-sized companies. These companies are strongly oriented towards the use of a central ERP system. The use of data from a uniform ERP system decisively simplifies many technical issues relating to the procurement of source data for digital analyses. In the evolved structure of large corporations, on the other hand, simply taking over and consolidating data from different systems can be a considerably more complex issue. The transfer of external data (e.g., financial market data, market analyses) is also possible today via standardized interfaces.
 

Standard software simplifies the way to digital data analysis

In general, many software components from data extraction and analysis to graphical evaluation are available today as standard software. These are characterized by different approaches in the procedure.  
Here is just a small selection:  

• Process Mining solutions (PAFnow, MINIT, ABBYY, dab:ProcessIntelligence ...) 
• BI solutions (PowerBI, Tableau ...) 
• Standardized analytic questions (dab:AnalyticSuite ...)  

 
Languages such as SQL, Python, ACL or R play an important role in the programming or adaptation of such solutions. The professional orientation of solutions in data analysis now also covers a broad spectrum:

• Data analysis for external audit and auditing 
• Analyses that represent or support the internal control system 
• Analyses in the manufacturing environment (Industry 4.0) 
• Business management analyses for corporate management 
• Analyses supporting risk management  

Digital data analysis is not an end in itself. In the past, medium-sized enterprises were already characterized by the technology-savvy pragmatism that can also serve as a guideline for data analysis. Accounting itself, which can be considered a supplier of information for corporate management, has long since been mapped digitally to a large extent. In the future, not only individual key figures, but also the digital information of the company in its entire breadth and depth will be passed on to the corresponding technical instruments of the management level.