05.02.2013

Reports are often not good enough for business decision makers

If complex business processes, technical infrastructures or the financial situation of a company are to be managed in line with requirements, regular reports have become indispensable. They provide information on performance, deviations from targets, and trends, for example. However, they only become effective when they become an intensively used tool for decision-makers in their area of responsibility.

In Actinium Consulting’s experience, however, the necessary acceptance often fails because the reports have significant deficits. “One of the core problems is that they are designed too little from the point of view of the addressees, but primarily according to formal criteria,” criticizes Klaus Hüttl, managing director of the consulting firm, outlining typical weaknesses:

• Unclear meaning of the key figures for the decision-makers: Reports are based on KPIs, they are in it the decisive value benchmarks. But how these metrics are to be understood in part and how they are distinguished from other KPIs, is often unclear in practice. As a result, corporate decisions of far-reaching significance may be made on the basis of a subjective, but by no means accurate, understanding of KPIs. To avoid the resulting risks of wrong decisions, each key figure should be clearly defined via sufficiently extensive attributes and this description should be made accessible to the addressees.
• Unclear statements due to contradictory key figures: Frequently, similar or sometimes even identical key figures in terms of content are available in different database applications, but have different dimensional characteristics and different granularities there. The result is divergent key figures for the same facts. Such inconsistencies cause misunderstandings, so that they generate a considerable risk potential in the decision-making processes. Low user-oriented design: The usability issue has completely bypassed many report designs. Yet their user-friendly overview plays a very significant role in acceptance and intensity of use. According to a recent study by Actinium, it shows great weaknesses among business managers. Because especially if the various reports also have a very different content structure, as is often observed in practice, each document always generates a large orientation effort, if important information is not to be overlooked or misinterpreted. 
• Layed out too complex: Reports are often subject to a great momentum with growing content or are laid out from the outset relatively extensive. But decision-makers find long columns of numbers annoying and usually concentrate anyway only on certain information. Therefore, the courage for lean reporting should be developed with one-page reports that condense all the important information on a single page and thus also increase the user-friendliness. 
• Without practical recommendations for action: If the information in the report is limited to mere numbers, the addressees are largely left alone in their conclusions. It is more helpful to supplement the key figures with background information, descriptions, experiences, etc.. In addition, it can be advantageous to offer interpretation aids and recommendations for action to improve the decision-making quality of the addressees of the reports through this support service.