Companies throughout the world have embraced mass customization in marketing, manufacturing and management functions to bring additional value to customers in an efficient way. The changes they make to a product or service to satisfy a specific consumer group can be as subtle as altering a color or flavor.
When it comes to mass customization in finance processes, however, in particular in reporting and planning, companies tend to focus more on standardizing processes, data structures, and technology stacks across geographies, which is not a sustainable approach. Organizations struggle to uphold the discipline and require rigor to support a standard structure in a dynamic business environment. End users are also left dissatisfied with the lack of reporting flexibility, and the level of insight they have for making timely decisions.
Let's take a step back to see how successful companies have embraced the idea of mass customization in other functional areas to better serve customers. Consider HP, the global IT company, its disk-drive division supplies drives to many organizations, with each requiring a distinct circuit board. It originally had trouble matching supply with demand because its customers often revise their orders at the last minute. HP transformed its processes by adopting a staggered production approach: it stocked generic units, added the circuit board, and ran tests when orders arrived. By postponing the point of product customization, HP enhanced the division's flexibility, and substantially lowered its inventory costs.
The same is true for travel portals like Expedia. Expedia has one common database of hotels, flights, car hire, cruises, and more, yet it has over 140 front ends that cater to its many customer groups with differing needs. Bloomberg, Amazon, TripAdvisor, and AirBnB all work in a similar way.
These organizations are standardizing the initial portions of the process and postponing differentiation. When standardizing data marts and product hierarchies, mass customization should be applied to the way people consume and use data to make business decisions as the context of these decisions varies between business units, geographies, and business situations. One size does not fit all.
Mass customization in management reporting or enterprise performance management (EPM) can be achieved by following three core guides:
- The reporting tool's structure should be designed with independent, customizable fields, such as flex fields in Oracle, that can be assembled into different forms easily and inexpensively
- At the processing level, the data structures/hierarchy should be designed to also consist of independent data marts (for both structured and unstructured data) that can be moved or rearranged easily to support different reporting requirements
- The base technology should provide:
- Data visualization to enhance the user experience
- Flexibility and responsiveness for actionable insights enabled by deep analytics capabilities
Digital technologies offer organizations great opportunities to transform their EPM or management reporting processes. Developments like Hadoop, a framework for storing, processing, and analyzing data of any kind or size, or natural language processing and generation, enable companies to handle structured and unstructured data effectively and allow data-mart standardization, which ends the traditional trade-off between agility, and speed and quality of insight.
As an example, by leveraging standardization with mass customization, a leading global consumer goods organization reduced the number of integrated supply chain reports it generated by approximately 80%. It achieved this by embedding automation in its EPM function, creating a global taxonomy linked to insights and key attributes, and consolidating over 3,000 reporting templates into 100.
The figure below, offers a snapshot of the report rationalization framework that the organization followed.
Digital technologies and analytics enable standardization and mass customization within enterprise performance management. By giving users the ability to customize how they consume the data and reports they need, these tools allows users to make fully informed business decisions. With easy access to actionable insights, EPM teams can fully align their work to business priorities and generate greater agility within the business.
To explore this topic further, read: Digital will drive the next wave of enterprise performance management transformation