Formulating and implementing a Global Data Governance model
Industry Vertical and the Company:
Several multi-location FMCG and Pharma companies
Many customers who grow globally end-up having multiple locations, multiple legal entities, multiple statutory compliance requirements including multiple accounting-practices (such as local GAAP and IFRS standards), and end up creating silosof information and localized IT implementations.
Consequently the top-management loses real-time visibility into the operations of different country-locations – with information lag ranging from few days to few weeks, with serious limitations with respect to granularity of information. Resulting issues include serious time-lag in declaring group-consolidated accounts to the market at the end of each quarter, and seriously limiting global consolidation of any data that needs to be collected from across the locations with the requisite granularity for the purpose of financial planning & analysis.
After analyzing the requirements from different locations, globally rationalized chart of accounts that caters to different Statutory-Reporting requirements, Internal MIS requirements, Statutory Compliance requirements, and Profitability Analysis requirements was prepared..
Transitioning the global processes to the newly rationalized Global Standard-Chart of Accounts was done in two stages. In thefirst stage the local CoA from each location wasmapped to the Global-standard CoA with a look-up table and a conversion algorithm. In the following stage each location wastransitioned to Global standard CoA.
A strong Data-Governance process was instituted where any change to CoA was tobe analyzed by a ‘Global committee’ which consideredthe ramifications of the change in the CoA as per a templated process before authorizing the change. An MDM module implementation followed.
Substantial reduction in the time lag for reporting Group-consolidated-accounts each quarter-end.Inmany cases the Profitability Analysis, Variance Analysis with granular drill-down to global locations has helped in quickly identifying and fixing the potential issues, leading to substantial improvement in financial performance of the company.
Qualitative measurement showed that Managers spentfar lesser time in ‘chasing the data for reporting’ allowing far more time for‘analyzing and acting on variances’.