For example, rebates and commission structures may vary by country, potentially distorting revenue figures when you add up net revenues across the globe. Costs are even more complex, with each business unit or country having a slightly different ERP instance, and slightly different ways of allocating back costs. Do you allocate all costs of a business transaction back to the original transaction via some allocation rule, or are some costs held at the country, regional or global level e.g. management overhead, office costs etc? What about marketing costs? Are these allocated back to each business unit, or to each individual transaction or customer account? It is a rare multinational company that can honestly say that these rules are all identical throughout the globe. I have personally worked in two of the largest and most successful global companies, and if I had a dollar for every time I heard someone arguing about whose data was the “right” data in a meeting then I would be relaxing on a beach rather than writing this article.

The reality in large companies is that a small army of analysts apply mind-boggling sets of rules to the data that is sent in from the various business units to iron out these little differences between business units and countries, and so present a moderately coherent view of things at the corporate level. Tools which seemingly reach out directly into the operational systems in these countries and retrieve the data look pretty on demos, but cannot work in practice since they have to resolve the semantic inconsistency between these systems, as well as deal with the very real issue of data quality. Since the average number of “master” definitions of key items like “product” and “customer” in a large corporation is not one, but eleven (according to a recent survey by Tower Group) it can be seen that such an approach is fundamentally flawed.

The usual way to resolve this is to build a corporate data warehouse in which the different source systems feed data that is then automatically massaged (“transformed”) into a single consistent form, reducing the average of eleven definitions to one. However the problem is that these systems are build on shifting sands. When one of the business units reorganizes, or the company acquires another one, this briefly consistent picture is shattered, and traditional data warehouses take weeks or months to restructure if there is a major structural shift in the underlying source data. If there are many sources, then every one of them can change, having a knock-on effect to the data warehouse, and a further effect on all the reporting systems that use the warehouse for source data. It doesn’t matter how pretty your reporting tool can format results, or draw nice graphs for you if the data underlying the report is wrong. The new generation of dashboard products may be cheaper and prettier than the 1980s EIS systems, but the IT industry appears to be adapting a selective memory [not sure of the wisdom of including this – dangerous ground] when it comes to remembering the problems that occurred with just such systems not that many years ago.

Regrettably, tedious issues like inconsistent master data, data quality and brittle data warehouses don’t play well in sales demos, so you won’t be hearing about them any time soon from your dashboard, cockpit or scorecard vendor. Since salesmen can be very persuasive, it looks like there will soon be a new generation of EIS systems built, with entirely a predictable outcome. We will soon see further growth in that old favorite software type, shelfware.

About the Author

Prior to leading Kalido's spin off from Shell in June 2003, Andy was CEO of Kalido Ltd in January 2001. In previous roles at Shell, Andy led a 290-person global consultancy practice of Shell Services International, and was Technology Planning Manager of Shell UK Oil. Prior to Shell, Andy worked in a number of senior technology positions within Exxon.

A 20-year veteran of data warehousing and integration projects, Andy is a regular speaker at international conferences such as ETRE, Tornado Insider, Red Herring, Gartner and Enterprise Outlook. See his award winning blog www.andyonenterprisesoftware.com for his insights on the industry.

Andy has a BSc (Hons) Mathematics degree from Nottingham University.