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Empowering the Information Enterprise:
Harnessing the Power of Exception Reporting

  Column published in DM Review Magazine
September 2005 Issue
  By Jonathan Wu

Exception reporting is used sparingly, probably because it is not well understood, but it is a business intelligence (BI) function that provides tremendous benefit to professionals and organizations that take advantage of what it can offer. Most BI applications contain robust features and functionality that provide individuals with timely, accurate and relevant information for monitoring, analysis, reporting and decision-making purposes. The greatest focus is on the delivery of information in the form of dashboards, standard reporting and analysis capabilities. Yet sometimes, BI applications can be too robust for most professionals to use or appreciate, unless they are  business analysts or their role is dedicated to analyzing information. While the ability to apprehend these capabilities may exist for non-business analysts, most individuals do not spend a great amount of time learning the extensive features and functions of their BI applications. Instead, they only focus on what they need to know because they are tending to their direct areas of responsibility. This is a common and natural occurrence. However, most professionals don't realize that exception reporting and alerts can help them do their jobs more efficiently. Beyond just saving time, exception reporting can even assist with major organizational objectives such as increasing customer satisfaction or aiding with Sarbanes-Oxley compliance.

Before exploring these benefits, let's first define our topic. Exception reporting is an automated means of monitoring predefined conditions that occur as a result of an organization's transactions and events. After the conditions are defined, exception reporting operates without direct human observation. Because an individual's ability to monitor the transactions and events of his or her organization is limited due to individual capacity to retain information and attention span, exception reporting enhances that ability while decreasing the burden of observation.

Defining Business Rules. In order for exception reporting to work, predefined business rules need to be established. These are typically conditional statements such as IF, THEN and ELSE. For example, a store manager wants to ensure that she has an appropriate amount of the inventory for product XYZ because it is one of the best selling products in her store. Thus, the business rule would be as follows: If the number of units of product XYZ is less than 50, then place an order for 500 units of product XYZ with supplier or else do not order. A correlated business rule is needed to monitor how long inventory is held in the stockroom and displayed on the floor to identify slow moving product or overstock. A series of these business rules for replenishing inventory allows the store manager to focus on customer service, retail displays and supervising store staff as opposed to monitoring inventory by product. Thus, she can actively monitor inventory levels by executing her own reports or queries.

Technical Approaches to Using Business Rules. The two most common approaches to applying exception reporting are to create database triggers with stored procedures and SQL statements that are executed at frequent intervals. While database triggers provide close monitoring of transactions as they are committed to a database, the resources it consumes can be significant depending on the activity and other in-progress processes. The overhead cost to the database may outweigh the benefits of creating numerous database triggers, and an appropriate balance will need to be achieved. Your database administrator most likely will have a strong opinion on this subject. The other approach is to create SQL statements that are executed at frequent intervals. While there is an inherent latency associated with this approach, the overhead cost to the database will be less than database triggers. Most BI applications will offer you a choice of both approaches.

Delivery and Usage of Exception Information. Because exception reporting serves as an active monitor of transactions and events, several delivery methods can convey this information expeditiously, such as phone calls, text messages, pages and e-mail messages. At the consumer level, you may have already experienced the benefits of exception reporting. If you are a frequent air traveler and receive information about flight delays or changes to your itinerary via wireless e-mail or an automated call to your cell phone, you recognize the value of exception reporting - especially if your flight was delayed or canceled. Another common example is electronic bill pay services. By subscribing to the service, you can define payees and the corresponding business rules for payment. When paying electricity bills, business rules can be set up so that if the monthly bill is less than $100, the bill is automatically paid. Otherwise, an e-mail can be sent, notifying customers that the amount is greater than $100 and that they should review the statement. The net result for customers is a few saved hours each month, thanks to exception reporting capabilities with their electronic bill pay service.

Exception reporting is now even helping organizations stay apprised of operational activities, helping to meet reporting, internal controls and operational integrity requirements to adhere to compliance standards. Retailers and manufacturers are turning to exception reporting to reduce shrink and lost shipments. The variety of applications is limitless.

Exception reporting delivers specific information as a result of a condition being fulfilled. The information is limited and serves as a call to action. It is not used for analyzing transactions or for research purposes. While it provides a specific function, the application of this form of BI can be extremely beneficial if used correctly.

Utilizing exception reporting requires defining business rules that contain conditions and actions. However, the investment of time is small in comparison to the long-term value that it delivers. The greatest benefit that exception reporting provides is the ability to monitor transactions and events without direct human observation, thereby enabling individuals to focus their attention on other areas of their responsibility. How can you and your organization harness the power of exception reporting


For more information on related topics visit the following related portals...
Business Intelligence (BI) and Query & Reporting.

Jonathan Wu is a senior principal with Knightsbridge Solutions. He has extensive experience designing, developing and implementing information solutions for reporting, analysis and decision-making purposes. Serving Fortune 500 organizations, Knightsbridge delivers actionable and measurable business results that inform decision making, optimize IT efficiency and improve business performance. Focusing exclusively on the information management disciplines of data warehousing, data integration, information quality and business intelligence, Knightsbridge delivers practical solutions that reduce time, reduce cost and reduce risk. Wu may be reached at jwu@knightsbridge.com.

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