[IMGCAP(1)]Despite being highly sophisticated and capable, ERP systems are so often under-optimized and not used to their maximum potential either due to busy CFO leadership, expensive consulting costs, and the never-ending budget constraints on IT investments.
The underlying idea for any ERP system deployment is to bring all users to a common platform, automate business processes, avoid duplication in data entry/processing, and to support all users with a seamless, behind-the-scenes integration of various enterprise functions on ERP modules.
A key reason for deploying ERP platforms is to absorb best practices implemented by other leading corporations, yet without realizing this projected benefit, albeit long term, the finance department finds that it has neither the time nor the resources to get more from its existing ERP environment.
The following are four areas that offer great potential for companies using ERP platforms to maximize GL-user productivity and improve ROI.
Use GL and Month-End Toolkits
Most of today’s ERP platforms offer special GL functionality that allows subsidiary ledger posts to roll up to the lead ledger without the need for a separate reconciliation. It also enables accurate tracking of subsidiary ledger transactions to ensure that they are always reconciled within the general ledger with a reliable audit trail.
For example, posting of goods receipt is processed by the materials management module team and for customer down payments this can be flagged by a unique special GL indicator. Other similar transactions can be bills of exchange payable/receivable, guarantees, reserves for bad debt, security deposits and so on.
For recurring processes like month-end closing, another common pain area is the need to continuously coordinate with team members so that all the necessary steps are performed in the right sequence and in a timely manner. Also, the checklist of process steps is frequently quite obsolete and likely a legacy of a former colleague who left no supporting documentation. ERP tools like ‘Closing Cockpit’ come in handy at such times as they facilitate better collaboration among team members and are stored within the ERP environment.
The templates created in other ERP/non-ERP systems can be integrated using the remote function call functionality. This can be further customized to meet region-specific IFRS requirements.
Deploy Tools That Improve User Productivity
Enterprise-wide systems like ERP are designed for cross-functional use and have inevitably ended up being excessively complex for an ordinary user. It is quite common for a user to navigate through dozens of screens to complete a single transaction. Training a new user who has no prior ERP exposure is a nightmare as the learning curve stretches for weeks.
One solution here can be the more modern workflow and document management systems, which offer standard connectors that communicate directly with the underlying accounting platform database.
Many finance and accounting (F&A) departments have also created their own custom front-end interfaces via MS Excel that avoid direct processing on ERP. These tools help to significantly cut-down processing time and simplify new user training as they now deal with fewer screens and data fields.
Improve Reporting with Business Intelligence (BI) and Analytics
It is not enough to just capture data, the challenge also lies in how meticulously we use the collated information (e.g., where is the customer’s cash locked up or which product or region is dragging down the overall net margins?). Using Business Intelligence (BI) tools can enable managers to have a big picture view, as well as gain the ability to delve deeper into finer details.
With rapidly evolving in-memory processing, web-based, secure access BI reports can be run from anywhere, anytime. Fixed Asset modules can be bolted to the existing ERP GL module setup and can help monitor asset productivity, uptime, quality, maintenance, and even project future performance. If you are a midsized business with a limited budget, you can opt for tools like say QlikView and others on the market to get the feature-rich BI capability with pre-built reports and dashboards, thus saving on expensive consulting costs of custom-built reports. Specialized service providers with their experience in designing and implementing F&A reporting solutions can play the anchor role to intensify the adoption of BI/analytics tools leading to quicker and smarter decision making.
Consider an Outsourcing Partner
Many specialized outsourcing providers today, with their strong IT/ERP capabilities, combined with F&A domain expertise can offer a great option to maximize finance productivity and minimize expenses. In fact, outsourcing to a third party “expert” can be crucial, as it provides time bound results, makes costs more predictable and has the ability to manage system-related risks and redesign/build reporting/analytics that may have been missed in the initial implementation. Specialists and consultants at outsourcing firms can offer a combination of both finance and accounting knowledge as well as ERP, IT domain and business intelligence technology skills.
Use of an outsourced service provider can act as a catalyst in introducing such technology innovations, helping improve F&A team productivity and accelerate transaction processing throughput.
As there is increasing demand for F&A function leaders to evolve from being book keepers to becoming more strategic business partners, there is a need to consider avenues that improve user productivity. If you have already invested significantly in your ERP deployment, this is the right time to explore how your ERP team can spend less time mired in cumbersome data processing and more time evaluating data output, and helping you drive better decision making.
With a strong focus on process standardization built around Six Sigma and lean frameworks, global delivery footprint, and deep domain expertise on F&A processes, an outsourcing provider can offer just the one-stop solution you need.
Hitesh Dixit is the vice president of finance and accounting operations at business proceess outsourcing service provider Aditya Birla Minacs. He is responsible for all service delivery operations, solutions and knowledge and consulting services. In this role, he also leads sales support, transition, quality and process improvement functions. Dixit has 17 years of post-qualification experience, including 12 years in global BPO operations, transition management, IT consulting and systems/ERP implementation.