Interview With Microsoft's Eric Hanson

Interview With Microsoft's Eric Hanson

As a $13 billion corporation doing business in 130 worldwide entities, Microsoft requires globally-integrated information systems to run its business. Microsoft relies on SAP R/3 to manage its financial processing requirements, and on Information Builders' SNAPpack Power Reporter to streamline financial reporting. Information Builders News recently spoke with Eric Hanson, a group program manager in Microsoft's Finance IT organization, to learn more about the challenges of financial reporting in complex R/3 environments.

IB News – What basic goals have you been working toward in designing your new financial reporting system?

Hanson – We have a very centralized finance organization. We run most of our finance from our corporate headquarters. This means we have to rely on the people in the field to be able to access and interpret financial reporting. Since our end users aren't particularly good at finding their way through a maze of report trees or hierarchy nodes to find what they need, the idea of reporting push is starting to take off here. In that sense, we wanted to implement a reporting system where end users would receive reports by e-mail. Whether it's an Excel report or an HTML report, it would only give them the information that they need. They wouldn't have to see a selection screen or a report menu tree. They would just get the information they need when they need it.

IB News – Does this system represent a new business model for Microsoft?

Hanson – We've been talking a lot about exception-based reporting and the Digital Nervous System at Microsoft. One of the basic principles of an effective Digital Nervous System is that bad news should travel quickly. You can make an analogy between a Digital Nervous System and the human nervous system.

The human nervous system is constantly processing massive amounts of information about the condition of your body. But none of this information gets brought to your consciousness until there's a problem. Your brain doesn't bother to tell you that your knee doesn't hurt or that your pulse is okay. Information is only sent when there is a problem. That's kind of what we're looking for with management reporting.

IB News – Is this where push technology comes into play?

Hanson – Yes. Ultimately, we are moving to an exception-based reporting model so we're not sending a ton of information out to people all the time. In the optimum situation, we only send information to people when it's relevant – you are over budget here, or did you know your T&E budget just got hit – these kinds of things. One of the key reasons we chose Information Builders products was their advanced report distribution capabilities.

IB News – What are the key business concepts that underlie this business model?

Hanson – There are a few principles that we think are key to leveraging a Digital Nervous System. The first is that bad news must travel fast, and that applies to exception reporting. Your knee hurts. That's when the brain sends you a message. Another one of the basic principles is that the Internet changes everything. It's a universal infrastructure with a universal interface. I can get information to somebody in Paris from a server in Seattle without them installing anything on their system. Third, the customer should be at the center, whether it's a business analyst or a marketing manager. Finally, every employee is a knowledge worker, and timely information helps them make good decisions.

IB News – Tell us a little bit about R/3 and your reporting architecture.

Hanson – Microsoft is running its worldwide finance, procurement, order management, and human resources processes through SAP R/3 on Microsoft Windows NT Server and Microsoft SQL Server. For financial reporting, we started by creating a data mart of SQL Server data. We extract data that has already been summarized in R/3 via some ABAP extracts, apply some business rules to the data, and do some allocations and transformations.

This particular SQL Server database is designed for OLAP reporting. We build formatted reports off of that and send them to users around the world. We have an Excel-based query tool, which allows people to query that OLAP database based on some predefined views, and select the fields they want. They can then build their own pivot tables and bring them down to their desktops.

IB News – Has this architecture given you all the functionality you need?

Hanson – This architecture was pretty popular with users. It was easy to use, and it gave them a lot of flexibility. But one of the problems was that it really wasn't designed to report down to transaction-level detail.

The architecture that we are implementing now with Information Builders will combine this OLAP engine with the R/3 transaction detail.

IB News – Can you give us an example of how the transaction-level detail might be used?

Hanson – If I were doing a monthly report of expenses for my profit center, and I saw that my T&E expense was $500 and I didn't know exactly what that amount repre-sented, then I would want to see the transaction-level detail. So then I would click a hyperlink on an HTML report or an Excel report and bring up the drill-down data from R/3.

The important thing here is that we don't have to extract all that transaction data into an external data source just to be able to report on it from this nice front-end that users like so much. So where there may be 8 million records in the SAP R/3 database at the transaction level, when it comes to actually drilling down on those, maybe 500,000 are the ones that anybody ever might have interest in seeing the details for. But because we don't know which 500,000 records they are, there is a temptation to just extract all of them into an external database. The architecture that we've designed allows us to extract at a summary level so our extracts are easier to maintain. They don't take as long, and we don't have as much data to deal with off-line, yet we still have the ability to get to the transaction detail when we need to.

IB News – How does Information Builders' SNAPpack Power Reporter help in this context?

Hanson – Native access to R/3 is the most crucial function that the Information Builders products give us. To address the R/3 database using ABAP through the R/3 application server was very important, especially in terms of keeping control over what's going on in our OLTP system. We want to give priority to database commits, such as invoices being booked, records being created, sales being recorded, and so on. Those activities should have priority over somebody querying the database.

IB News – Does SNAPpack Power Reporter integrate well with the Microsoft technologies?

Hanson – Definitely. We use Microsoft Excel and Microsoft Internet

Explorer as the front-end technologies for world-wide financial reporting.

Information Builders' SNAPpack Power Reporter works in conjunction with these technologies to access data stored in a variety of data sources, including SQL Server and R/3, to rapidly develop and distribute complex reports.

IB News – Do you have some sort of ROI you expect out of this?

Hanson – Yes. We are looking for a return on our investment in three major areas. The first is in the reduction of development costs associated with creating and maintaining reports, especially from R/3. Second, through the elimination of other reporting systems. Third, through improvements in financial analysis related to marketing and operating expense information.

A number of financial people are spending a lot of time creating and distributing reports for their organizations. By eliminating this kind of data jockeying, the finance resources will be freed up to do more value-added analysis.

IB News – Have you tested this with any of the end users yet?

Hanson – Yes, they are really happy with it. Some of them are saying it is a big improvement over what they had before. In fact, we just did testing with some users in Paris. It was funny because it's all Web-based, and one user said, "I don't know how I'm going to test this; I don't have anything loaded on my machine." He was surprised and really happy to find that in order to use the reporting system, nothing needed to be loaded on his client. All he needed was the URL. Right away he was able to get reports and he knew how to use them. Training costs are almost zero. People can use Web reporting very easily.

IB News – Do you have any closing advice you might offer to your colleagues in similar situations?

Hanson – The basics are almost clich�, but they're still relevant and they probably always will be. Know your customer, know your requirements, and plan well. Beyond that, every industry and every organization has unique needs.

David Baum is a freelance writer based in Santa Barbara, CA.