Financial transparency has become something of a battle cry in the aftermath of the recent turbulence shaking global economies. Organizations are making sure that the financial process allows them to wring every drop of innovation from the data they collect. According to Rich Clayton, vice president of business intelligence and enterprise performance management at Oracle, that growing interest is reflected in software sales. “For us, analyzing financials is the fastest-growing part of our business, bar none,” says Clayton. “And it’s not just large enterprises—the interest goes all the way down to small startups.”
Analytical software sales may seem to run counter to the fluctuating economy. “When things are going well, companies don’t necessarily have to have a detailed grasp on how money is being spent, because there’s more wiggle room. So when things get soft, there’s more pressure to increase internal accuracy, find where costs are going. The economy is forcing finance into an introspection period,” Clayton says.
This introspection resulted in an increase in what Clayton calls transformation projects. “Unlike many software categories, automation isn’t really the way people achieve transparency,” he says. “Transformation’s focus isn’t on improving operational processes like order to cash, it’s the analytical processes that complement those.”
Public and private sector organizations may have different approaches to transparency. Businesses may turn their attention to internal analytics, but the public sector focuses outward—toward the constituency. “With a private company, accountability comes internally, but with a public entity such as government, transparency leads to public accountability,” says Jeff Epstein, Oracle executive vice president and CFO. “There is more likelihood that the press and public will have a point of view, and financial transparency projects must extend to them as well.”
Including that vital constituency will necessarily affect certain aspects of a public sector project. For example, private sector metrics will likely go to a group of businesspeople with a certain level of understanding. When presenting data to the public at large, designers need to consider how to present data in a way that the casual public observer will understand, without diluting the value. “There’s a risk of oversimplifying,” says Epstein. “You have to make sure that information is clear and accurate, but you’ll need to include some explanatory language as well.”
Transparency also involves managing expectations on a large scale. “Transparency is a very efficient way to manage a business, but it requires trust and the leader to be confident that people will understand that the goal is to improve over time. You can’t be perfect from the beginning—you can only start where you are and measure progress from there,” says Epstein.
In both sectors, however, successful financial transparency efforts are ultimately about honesty. “Whether it be a business or a public agency, what you are ultimately doing is trying to build trust and confidence with stakeholders,” says Clayton.