Enron whistleblower preaches ethics to SAS conference

LAS VEGAS — CFOs are stepping up to take on important role as trusted advisors, but they don’t have the technology they need to support them in their efforts, according to a recent survey of nearly 300 CFOs and other senior level executives.

While 81 per cent of senior business executives

believe the CFO plays a role as a trusted advisor within their organization, only 25 believe that business intelligence technology can support the strategic demands placed on the CFO, the survey found.

The results of the survey, which was conducted in September, were released Wednesday at SAS Institute Inc.‘s BetterManagement Live Worldwide Business Conference, being held here this week.

SAS announced the results of the survey as it launched its SAS Financial Intelligence portfolio of software solutions designed to help organizations perform predictive analysis. The suite is part of the SAS 9 Intelligence platform. The software collects and consolidates financial data from across the enterprise so that it can be used to make better decisions about the future, SAS said.

“”An end-to-end solution starts with being able to extract information,”” said Phil Strand, the global strategist and program director for SAS corporate governance and financial intelligence solutions. Once information is extracted, validated and put into a meta data repository, “”it becomes the single version of the truth,”” he said during a panel discussion at the conference.

This is essential, given today’s climate of distrust in the wake of scandals such as Enron, said Lynn Brewer, a former Enron executive who blew the whistle on the company’s financial reporting misdeeds. Though Enron is clearly the poster child for corporate corruption, its misdeeds were just the beginning of a tsunami of such cases, said Brewer, who was also one of the panelists.

“”The driving factors that existed when Enron imploded exist today,”” she said. Market pressures are forcing companies to show quick short-term gains, which drive some to falsify their financial records. It also means that long-term goals are often sacrificed for short-term profits, she said.

Though people originally thought the problem at Enron was an accounting issue, it actually went deeper, Brewer said. The problem was a lack of understanding of whether the Enron business model worked, Brewer said. Enron executives didn’t know if the business model was making money, or if it even could. Going forward, companies will be judged on ethical accountability, she said.

It’s important to look not just at the letter but the spirit of the law when implementing the changes necessitated by Sarbanes-Oxley, a new set of financial regulatory requirements put into place post-Enron, said another panelist, Lee Ditmar, a principal at Deloitte Consulting LLP.

At the heart of Sarbanes-Oxley is the need to improve the timeliness, reliability and transparency of information, he said. The best way to deal with compliance is to have good processes in place enabled by technology, he said.

One organization looking for a consolidated view of its data is CIBC‘s mortgages and lending division, said Paul Flach, the Toronto-based director of management information services for operations and services at the bank. The division is currently in the process of implementing SAS 9.

“”We’re going to use it for building a single source of the truth,”” he said in an interview. CIBC hopes to use the tool to do credit risk management and profit and loss reporting, he said. The company is in the process of tying in all of the data from its front-end applications into SAS 9.

In the end, Flach hopes to achieve a better understanding of the key drivers and profit factors of the business.

This is something he shares in common with Canada Post, which is also trying to gain a better understanding of its strengths so it can better offer services tailored to them.

As part of its efforts to transform and rationalize its cost modelling process, Canada Post is using the SAS Activity-Based Management tool. It pulls financial data out of the organization’s SAP enterprise suite in an automated fashion, said Jason Hergert, Canada Post’s general manager for corporate finance in Ottawa.

One of the benefits of this is now all of the information is kept in one place, where it is accessible to everyone, said Ted Kwiatkowski, the Ottawa-based general manager of profitability management at Canada Post. Before, the information resided, for a large part, in employees’ heads. And when they left, they took their knowledge with them, he said.

Comment: info@itbusiness.ca

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