Can Reporting Automation Challenge the Status Quo?

Using automation to augment corporate reporting may be a foregone conclusion in many organizations that embark on a digital finance transformation journey. However, as teams work through various stages of transition, questions often surface about how to map out and then implement a connected reporting platform and the requisite reporting automation.

“During a transformation and beyond, organizations would do well to place emphasis on reporting automation projects that drive decisions, are important to critical stakeholders, and address high-risk areas,” says Julie Iskow, president and chief operating officer of Workiva.

There are other advantages reporting automation can bring to bear on a finance transformation. “Perhaps the most essential benefit is tapping the potential value that comes from breaking down barriers that lock information in silos and then aligning core data elements from different systems so the information can be used across multiple reports,” observes Valeriy Dokshukin, a partner with Deloitte & Touche LLP.

In an interview with Rachel Sutherland, a manager with Deloitte Services LP, Iskow and Dokshukin discuss reporting automation and connected platforms in the context of a digital and finance transformation, explore what’s changed since the acceleration of remote work, and consider how reporting might evolve to meet future demands.

Sutherland: What broad insights related to reporting can you share with leaders embarking on a digital finance transformation?

Iskow: Don’t think only of what you’re reporting on now, but rather be forward-looking and flexible in your planning. Regulatory bodies, investors, customers, and other stakeholders have demonstrated that what’s essential now is only part of what will be essential for tomorrow’s reporting. Leaders should consider planning for growth and scale, and they should define a finance transformation roadmap that includes achievable milestones and unfolds in structured, executable phases. More important, the transformation process can benefit from leaders who understand and prepare for the effects of change, including the development of change management strategies to address employee concerns.

Dokshukin: Effective actions might also include inviting key individuals from inside and outside of the transformation leader’s team to participate in the process to lend a diverse perspective to project planning, especially with respect to enterprise-wide issues. Purposefully evaluating and building technology ecosystem that meets the needs of changing business and regulatory environments can help position the company for future growth—and provide teams and individuals who thrive on innovation a positive view of their future.

Remote work accelerated some automation projects. How did the move to a virtual environment affect digital finance transformations?

Dokshukin: To enable work-from-anywhere strategies, many organizations focused efforts on making their transformations more cloud-friendly. We’ve seen executives who were hesitant to move to the cloud before the pandemic embrace cloud platforms to, among other objectives, bolster financial data security, align with IT strategy, and make reporting systems more scalable. Given the continued influx of data from multiple sources and the related increase in reporting requests, the need for connected reporting automation will likely increase.

Iskow: What’s also changed is that virtual and hybrid environments are no longer a “nice to have” option; they are a necessity and cloud technology fits nicely into that landscape. Team members are often not onsite to collaborate, so data can’t be locked up in on-premise systems. And while cloud technology can connect disparate data sets and enable the reporting of auditable board- and investor-grade information, it also requires enhanced data security and control. That means organizations may have to reconsider security protocols and add built-in controls and audit trails to monitor new virtual, shared operating environments.

Aggregating financial and other data to provide key business insights can be an important objective of a transformation. What role does automation play in meeting that goal?

Dokshukin: Typically, reporting is considered a high-effort activity based on the manual manipulation, aggregation, and consolidation of data for each type of report. Introducing an integrated, reporting platform paves the way for a shift from operational finance to finance insights. Automation’s role will likely involve using big data, analytics, and predictive modeling to inform business strategy and decisions. That could mean that mundane tasks will become easier to automate through ERP systems and other means, freeing up finance talent to apply automation to planning, forecasting, and other higher-value activities, including identifying critical risks—such as those related to cybersecurity or control gaps.

A connected reporting platform can help companies attain an end-to-end vision of a touchless finance organization that extends from transaction or event origination to information reporting. Once in place, the connective tissue can help reduce errors associated with manual data manipulation and drive standardization, transparency, collaboration, and improved data quality.

Iskow: Data integrity is another area where automation can play a role, especially in hybrid work environments where organizations need to equip employees where they are and do it without adversely affecting the accuracy or consistency of data. Automation that helps preserve data integrity by populating connected spreadsheets or produces reports ready for external reporting—complete with required disclosure—is another example of the role automation can play in finance transformation efforts. Access to that data and derivative insights can help executives and teams keep pace with business expectations that require high-velocity decision-making and real-time intelligence that satisfy stakeholder demands and link global operations. Reporting automation can be the workhorse for those tasks.

Which reporting areas are emerging as high priority automation candidates?

Iskow: Two areas come to mind—one an evergreen issue, the other relatively new. Global statutory reporting, particularly pulling together transfer-pricing data, is a perennial challenge for enterprises with heavy manual processes. Information from various jurisdictions must be collected, reconciled, and accurately reported under tight deadlines to comply with myriad local and national mandates.

The second issue involves the rapidly increasing call for more—and more detailed and uniform—data related to environmental, social, and governance (ESG) issues, and diversity, equity, and inclusion concerns. For instance, the recent Sustainable Finance Disclosure Regulation (SFDR) directive in Europe and the ESG disclosure rule proposed by the SEC are two of the newer entries in what seems to be a complex ESG reporting environment. Automation could be useful in helping organizations gather, organize, and map data to multiple reporting standards and frameworks to meet evolving disclosure requirements.

How might automation affect broader transformation strategies?

Dokshukin: When building a desired end-state as part of a broad transformation, leaders can develop an ideal reporting vision, one that spans various parts of the business and enables multiple groups to access consistent data for various reporting needs. Consider an organization that seeks to deploy a reporting automation platform to wrangle source data for statutory and SEC reporting and wants to explore adding ESG reporting to the mix. By effectively aligning the necessary data elements—which can include financial, market, and compliance data—with required ERP and non-ERP information needed for the reports, automation can help promote enhanced data quality, create greater efficiencies, and improve collaboration among functions to ultimately produce accurate and consistent global reports.

Iskow: Digital transformation may also affect how the C-suite works with enterprise IT to invest in automation. For example, many chief sustainability officers may be looking to enhance the credibility of ESG metrics and improve oversight related to the process of producing those numbers. One consideration may be to require a defined control structure made possible through automation. The resulting high-quality metrics can then be used to build dashboards that support decision-making and optimize sustainability disclosures. And another example, a CFO interested in using predictive analytics to generate suggestions for XBRL tagging might engage with IT on how to incorporate advanced AI to automate the process.

What might the future of reporting look like in five to 10 years?

Dokshukin: I can imagine automation that facilitates a touchless, integrated, and fully connected reporting system that becomes a standard asset for leading organizations. I also expect more organizations to shift most of their data to cloud ERPs and other cloud platforms with the aim of improving processing speed of data aggregation and consolidation that supports the delivery of rapid real-time reporting to meet the expectations of external and internal stakeholders.

Iskow: Effective leaders will likely develop a single, shared ecosystem of data, with connectivity that reaches across teams, functions, business units, and the C-suite. This reporting structure will satisfy the demands of boards and investors who will continue to call for more transparency with respect to enterprise-wide reporting. Meanwhile, advancements in AI and other cognitive technologies, and the role they play in verifying that data is trustworthy, will become more commonplace. Internally shared data hubs with automation and advanced technology overlays will pull data from reporting functions fed by finance, risk management, legal, HR, sales and marketing, operations, and other functions to become the engine for delivering business-critical insights and competitive advantage.

—by Marie Leone, editor, Deloitte Services LP, for Deloitte Insights in the Wall Street Journal

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