Given the recent attention paid to the financial reporting fiascos at companies such as WorldCom Inc. and Enron Corp., Zebra Technologies Corp. couldn’t have timed its upgrade to a more integrated reporting and business planning system any better.
The Vernon Hills, Ill.-based maker of printing products this week plans to go live with the expanded system, which is based on software developed by Hyperion Solutions Corp. Zebra’s audit committee wants the reporting system to do more than it could before, said Todd Naughton, vice president and controller at the company. Users will now be able to drill down into financial data at more finite levels and manipulate the information in more complex ways, he added.
The upgrade began long before the ongoing spate of high-profile accounting scandals did. But Zebra is one of several companies that said it now has a greater awareness of the need to ensure that its financial reporting and forecasting systems are top-notch.
“It’s absolutely a big deal,” Naughton said. “We’re making sure that if there are issues, we find them internally before anything goes out to anybody.”
Earl Newsome, CIO at Owens-Illinois Inc., a Toledo, Ohio-based maker of glass and plastic packaging, said IT should prepare for financial reporting changes that may be mandated by the government.
“Congress is going to act and most likely overreact to the situation that occurred in a few instances,” Newsome said. “What it means from a general business practice is that we need to continue our pursuit of excellence in terms of information management.”
Zebra uses Sunnyvale, Calif.-based Hyperion’s software to consolidate data from SAP AG and Baan Co. enterprise resource planning (ERP) applications in an Oracle database for reporting and budgeting uses (see chart). It also stores sales information in a separate Oracle-based data mart. But about 18 months ago, Zebra realized that it needed to upgrade the system to make it more scalable, Naughton said.
The company last September started installing a new Hyperion Financial Management module that integrates financial planning and reporting activities. The software is designed to handle more complex revenue recognition calculations while accounting for financial details like potential accounts receivable from customers, he said.
Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Daly City, Calif., said the problems at WorldCom, Enron and other companies will likely lead to “a whole new level of reporting that may not have been done before.” To make that possible, he added, many companies will have to install analysis tools that can reconcile sales reports with operational data, such as inventory transactions.
The current focus on more accurate financial reporting could create new sales opportunities for SAP and other business applications vendors, as well as for developers of data analysis software, such as Cognos Inc. in Burlington, Mass., SAS Institute Inc. in Cary, N.C., Informatica Corp. in Redwood City, Calif., and Hyperion, Greenbaum said.
Newsome said Owens-Illinois uses Hyperion’s software to extract data from homegrown mainframe applications and several ERP systems based on software from SAP and Denver-based J.D. Edwards & Co. Next year, he said, Owens-Illinois plans to roll out Hyperion’s Web-based budgeting and planning module to automate business planning.