NEEDED: THE BIG PICTURE
Noel Gorvett is well aware of how an organization can miss the opportunities offered by speeding the close.

In 2002, Gorvett, the group business systems manager at book publisher Pearson, began exploring centralizing group reporting. The idea was to replace the more than 400 general ledgers and 80 ERP systems in use throughout the global publisher’s operating units in 60 countries to track $7 billion in annual revenue. The IT group’s goal was more efficient maintenance through a common technology base. But the focus on platform integration overlooked a key business need: a way to report the financial information flowing through the systems in a meaningful, consistent way at the departmental and executive levels.

“Each Pearson department was working off its own assumptions,” Gorvett recalls, such as the criteria for sales forecasts and profit margins. That made it difficult to create a consolidated financial report, much less to identify variations from plan so managers could act quickly while there was still time to do so usefully. It became clear to Pearson’s group CFO in summer 2003 that a different approach was needed, one that focused on fixing inefficiencies in the financial reporting process itself and standardizing processes across Pearson. That way, executives could work from the same financial assumptions, no matter what applications they used to manage their books. This in turn would enable them to quickly identify significant differences across divisions and adjust strategies if needed. And the processes would gather the information that would be needed for compliance, regulatory and stockholder filings—no more scrambling to retrieve this information at each close from buried Excel spreadsheets or by running queries against transaction systems.

So Gorvett—working as a liaison between the CFO and the CIO—led Pearson on a tack that determined standard financial transaction, auditing and reporting processes for the whole company—creating, for the first time, a standard chart of accounts. This provided a unified list of all accounting data tracked to ensure that everyone used the same definitions and categories and that the enterprise captured all the financial information it needed at all locations.

The next step was to set up the technical requirements for what data needed to be captured from what sources, how it would be presented to the central financial reporting tool and what processes had to be followed to generate the results. That way, no matter what technology platform a division happened to use, the data that management was receiving would be consistent, accurate and timely.
The result: Pearson was able to close its quarterly books in six days (down from about 20) and reduce its year-end reporting time from eight weeks to six weeks. And because everyone was working from the same chart of accounts, financial staffers no longer had to burn the midnight oil to translate their financial information into what the executive team needed.