Cutting it

When trust has broken down so comprehensively between counterparties in the financial markets, then individuals and companies need the facts as they battle to carry on doing business.

The speed with which events are moving highlights the inadequacy of the timeliness and relevance of much of the financial information that underpins vital credit and business decisions. Some information, such as foreign exchange rates and share prices, is available in near real-time, but the speed of availability of much financial information has not increased in decades.

The good news about corporate data is that it is seen as reliable, even if out of date. While more frequent reporting is the norm for the globe’s biggest corporates, much of the action on the economy takes place in the medium and small sector.

Executives there have to make vital business decisions on data that could have been rendered irrelevant and dangerous by subsequent events. As we say in our feature on page 22: “Eight-month-old data just won’t cut it. Events are moving far too fast.”

Academic research has concluded that it is essential for small and medium-sized enterprises to take a strategic approach to their information needs. Today that includes the need to inform the market of their financial strength while receiving information on the position of others, including suppliers, customers and competitors.

There are no easy solutions for increasing the value, timeliness and relevance of corporate information. While suppliers are trying to respond with more up-to-date information, and increasingly sophisticated data tools, it is clear that much more needs to be achieved.

This should not become a question of relevance versus quality. At this moment of turmoil the modern economy needs both.

peter.williams@incisivemedia.com

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