How finance teams are driving enterprise resource planning evolution
November 2017 | SPOTLIGHT | FINANCE & ACCOUNTING
Financier Worldwide Magazine
November 2017 Issue
As every business evolves, it seeks out ways to better manage its growing operations. This evolution is often built on acquiring a complex array of applications – bought and used at different times for very specific business functions.
Do you remember when you invested in your first accounting programme, or inventory management or HR system? And the result? A disparate technology landscape that, as it grows and ages, inevitably introduces inefficiencies – leaving companies struggling to maintain clear sight of the bigger business picture and make the right informed decisions. The phrase ‘many hands make light work’ does not apply to the typical siloed business application infrastructure.
In our experience, too many employees are dissatisfied by the proportion of time they spend on manual manipulation of data. It causes delays and inaccuracies when it comes to reporting and analysis. They are all too aware that their time could be better spent on activities that would continue to support the evolution of the business.
But we are seeing the office of the chief financial officer (CFO) leading a change in the direction of travel for business applications – focused on greater efficiency, visibility and productivity. CFOs who exploit new ways of working, such as the use of integrated business applications in the cloud, are reaping benefits as diverse as increased speed and quality of analysis, lower costs and even better staff retention.
Cloud ERP delivers integrated business applications for all
So, why if we are talking about evolution are we still using the term ERP? ERP (enterprise resource planning) sounds old and, in our fast-moving digital world it is positively geriatric, having been around since the 1990s. But as a set of integrated business applications it too has evolved and is now within the reach of many more organisations.
But sadly, investment in ERP for many growing businesses is too often dismissed – still carrying the reputational baggage of big, resource-intensive IT implementations. This legacy has understandably led to a certain amount of caution at small and medium-sized companies. Finance leaders understand that integrated business applications could speed their evolution but are wary of the cost, resources and the disruption to their business of a lengthy implementation.
From our conversations with a growing number of finance teams, it is often the CFO who is best placed to make the case for change. Keeping an open mind, they take a fresh look at technology as they seek out ways to drive out complexity and cost from at best overlapping, at worst contradictory applications.
In a fast-growing business, decision makers need to combine all relevant data sources into one single source of truth. Data that exists in siloes is of little use to finance chiefs who need to make real time decisions based upon a range of variables in a comprehensive business context. Centralising data in an ERP system overcomes this obstacle and ensures all relevant factors are taken into account on any given day, or even hour.
By integrating data from across the entire organisation, ERP creates a basis for automating key processes. It removes the need for manual invoice processing, for example freeing up frustrated teams to focus on core responsibilities and value-added tasks. Automated controls, checks and validations in ERP also helps ensure the accuracy of information, catching data conflicts, errors and inaccuracies as they arise. But as well as delivering the process efficiencies you would expect from an ERP system, we have also seen how ERP implementation leads to new and innovative practices driven by a re-energised user community. When change can be implemented quickly, it can restore business agility. Business users can spend less time trying to make technology work and invest more time on work that makes a difference to performance and growth. A win-win for the business and its employees.
We have witnessed how cloud technology has allowed major ERP vendors like SAP to synthesise decades of market experience into solutions that scale to the requirements of fast growing small and medium-sized companies. As the cloud has matured, these systems have become just as powerful as the heavy duty on-premise systems large enterprises are using – but have become less expensive, more agile and with a lower total cost of ownership (TCO).
Cloud deployment minimises the capex required around IT investment and saves time on software maintenance. That means SMEs can acquire ERP without additional worries about managing hardware, software and installing upgrades.
But regardless of whether CFOs embrace on-premise or cloud, the benefits of ERP are many. It increases efficiency across many business processes, reduces financial reporting timescales and captures more and faster business insights from financial information, enabling more informed and faster decision making.
Evolution to integrated business systems happens even faster if the solution is implemented in partnership with specialist ERP consultants who ‘get’ the practical and procedural requirements of the office of finance, and will work with them to anticipate and avoid potential delays. While cloud implementations are almost always faster and less fraught than on-premise, it helps to have decades of market experience to draw from to get it right first time.
As reliance on CFOs as a source of insight grows, they increasingly find themselves with a voice at the top table about how best to continue the evolution of the business. And we are seeing them use this voice to drive an evolution in the effective use and value of the technology as ERP in the cloud becomes accessible to every business.
Kirit Patel is regional managing director (UK & Europe) at EOH International. He can be contacted by email: email@example.com.
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