Architecting Insight

What Finance Leaders Must Get Right Before Designing Dimensional Reporting

🕒 6-minute read | Tony Crandall, CPA | July 2025

If you’ve been tapped to lead the design and implementation of a new ERP system—or just as challenging, to fix a broken management reporting environment—you already know that you’re dealing with a tremendously abstract business problem. Following is the blueprint on how to proceed with clarity, speed, and confidence.

You’re staring down a global chart of accounts that’s wildly inconsistent. Executives can’t agree on how they want to view profitability. Income statements look like they were cobbled together from a dozen different companies. Nobody trusts the reports. Nobody uses the reports. And somehow, there are 10,000 of them in your inventory.

Meanwhile, the AI capabilities in your new or existing ERP system may sit unused—because the underlying data is too dirty and fragmented to make use of them.

Welcome to one of the most overlooked, yet high-risk parts of finance transformation: dimensional management reporting.

It’s not plug-and-play. It’s not well defined. And when it’s not designed properly, it undermines everything else including your ability to make strategic decisions and manage costs that optimize profitability on an ongoing basis.  The very reason for the program can be easily compromised.

So What Is Dimensional Management Reporting?

It’s the internal-facing side of finance reporting—built not for regulators, but for decision-makers. Dimensional reporting cuts performance across three critical perspectives:

• Function (e.g., business unit, business function, sales division, manufacturing division, service division, plant, cost center)

• Product/Market (e.g., brand, product, customer, channel)

• Geography (e.g., region, country)

When you apply these dimensions close to the transaction level—meaning they’re captured as part of the source data—you minimize allocations and improve transparency. That, in turn, makes it easier to hold managers accountable and enables faster, smarter decision-making.

The Real-World Challenges

Designing a dimensional strategy isn’t about buying a new reporting tool or implementing dashboards. It’s about solving these very human and organizational issues:

• Stakeholders don’t know what they want – You’ll hear “we need better reporting,” but few can define KPIs or reporting dimensions clearly.

• There’s no ERP template for this – Unlike transactional processes, management reporting lacks a prescribed solution.

• Everyone built their own version – Across countries or business units, reports, hierarchies, and KPIs are inconsistent and hard to compare.

• Data definitions vary widely – Is freight “in” part of COGS or SG&A? What’s the standard for a “customer”? These basic questions go unanswered.

• Complexity creeps in fast – Especially with allocations, granularity feels accurate—but it often creates more cost than value.

Laying the Right Foundation

A solid strategy connects reporting design to business intent. You’ll need to:

🧠 Align with Performance Philosophy

Understand what profitability detail is needed at a given level in the organization- what people can control under their purview for which they will be held accountable-  this maps to their goals and objectives and drives the right behaviors.  Define what margin depth is meaningful to each stakeholder. For example, product managers may only need gross margin, not EBT. This informs whether to allocate SG&A and how deeply.

🔄 Map Trade Flows

Understand how products and services move across entities. This helps you define intercompany eliminations, transfer pricing impacts, and what data must be tagged and where.

🧱 Define Cost Views

Use both:

• Organizational views (who owns the cost), and

• Functional views (how cost is used),
  to improve control, comparability, and benchmarking.

Data, Systems, and Architecture—In That Order

🔍 Start With a Reporting Matrix

Survey existing reports. Map who uses what, how often, and why. Consolidate and rationalize.  Cross-walk this analysis to the analysis of the performance management philosophy of the business to draft a first cut at the overall reporting requirements.  Workshop this and iterate as needed.

🧾 Standardize the Income Statement

This one document becomes the template for reporting design, account rationalization, and source data strategy. Get agreement here early.

🧭 Build Your Data Strategy

Form a source data hypothesis: for each reporting element, know where the data comes from. Is it direct? Allocated? Legacy?

Design your allocation strategy with discipline: identify senders, drivers, and receivers. Simplicity improves maintainability.

🏗️ Architect Last, Not First

Once requirements are defined, you can diagram the system architecture. Clarify:

• Interfaces and staging

• Planning/reporting tool integration

• Data governance

• Visualization platforms

Conclusion

Dimensional management reporting is not merely a systems problem; it is a strategic enabler that requires coordination between finance leaders, IT architects, and operational stakeholders.

Its successful implementation depends on understanding performance philosophy, aligning on dimensional structures, simplifying where possible, and connecting reporting requirements to core business processes.

When designed and executed well, dimensional reporting provides the insight needed to manage today and predict tomorrow.

Lessons Learned From the Field

• 📌 Start with the corporate and business unit CFOs. Get their vision for profitability clearly articulated.

• 📦 Map how goods/services move. This impacts valuation and margin tracking.

• 🎯 Define depth of margin per level. Know where allocation adds value—and where it doesn’t.

• 🧠 Develop a “70% complete” hypothesis and refine through iteration.

• 🔁 Involve business process owners (GL, Sales, Procurement, etc.) to test design feasibility and data availability.

• 📣 Communicate design changes early and often.

• 📊 Harmonize the income statement up front. It becomes the backbone of account rationalization and dimensional structure.

• 🧭 Lead with credibility and resilience. This is high-stakes work requiring strategy, diplomacy, and technical fluency.

• 👥 Hire a well-credentialed expert. Don’t make this a purely technical task—your lead must know process, data, and systems. Invest accordingly.