Accurate financials play a critical role in the smooth running of any business, whether small or large, hence, the selection process for an ERP or accounting system is very crucial to a business’ success.
You’ve probably heard or read about a spreadsheet or accounting blunder that ended a CFO’s career with a company. Last year, Walgreen’s Chief Financial Officer Wade Miquelon’s bad forecast projection may have forced him to resign from his position. But the sad reality is, spreadsheet errors happen all the time – and to some extent, manual entry spreadsheet errors are inevitable – after all, we are all human.
Currently most CFOs are doing their financials using modular ERP suites from a single developer (vendor) and filling in the gaps with Excel. A smaller number are using point solutions but also with significant gaps. And when an ERP or accounting package, fails to meet your business needs, what starts of as a single excel spreadsheet to solve specific business problems, can turn into a multitude of disconnected spreadsheets and workarounds, that maybe costly and error-prone.
Related: Top 25 Financial KPIs Every CFO Dashboard Should Have
The CFOs role in choosing an ERP system
Companies that are heavily reliant on error-prone spreadsheets, manual transaction and data management, may need to invest in an entirely new ERP system that meets their current business needs. However, making an ERP or accounting system purchase decision is arguably one of the most daunting business decisions you’ll ever make. To some extent, implementing an ERP is similar to getting married, if you want to get out of it, it’s expensive and gut wrenching, and in the case of an ERP implementation, it could be career limiting. All ERP packages insist that they are the best and deliver the most value; just ask their sales people. So how can you know?
Read Also: Calculating ERP ROI: What The CFO Needs to Know About ERP
To help you in your decision-making process, here are few key questions to consider:
- How important is scalability or adaptability to your business?
- Will the software I choose align with our strategic initiatives?
- Is the software able to flexibly and quickly analyze, measure and forecast my business as it grows and changes?
- How much will it improve accuracy and automate manual process?
Without the appropriate research, you may find out the ERP or accounting system that you choose may not live up to all its “bells and whistles” once it goes live. For businesses with process complexities, it’s especially crucial that you ask the right questions and see demonstrations of different scenarios using the new ERP system, to prevent any unpleasant surprises in the future. Be sure that your chosen software can handle your unique business needs once you start processing those hundreds of thousands or even millions of transactions upon your system going live. As they say, the devil is in the details. Or, if you don’t agree with this, then you’re obviously one of those dare-devil risk-taking CFOs.
Related: How Much Time Are You Wasting Manually Handling Deferred Revenue?
For those CFOs who don’t embrace this type risk, ERP technology options are exploding exponentially, albeit, further compounding the complexity of the selection decision. Do you go with a tried and true single vendor suite, or do you integrate the upstart best of breed packages? Do you move to the cloud or go with an on-premise solution? These are all questions that a CFO should carefully consider when implementing a new ERP or accounting system.
For instance, while best of breed SaaS or Cloud packages with a “pay as you go” model may be less costly at the onset, a full cost analysis can only be determined by taking into account the Total Cost of Ownership (TCO) for all variable and fixed costs associated with moving to the cloud or staying on-premise.
At the end of the day, whether you decide to go for a pre-packaged ERP system with different modules for sales and marketing, operations, and accounting, or if you decide to go with an accounting package that integrates with other pre-existing systems, the decision should be made taking into account where your business is now, and where you want it to be in the long-term. Because when it’s all said and done, choosing the best ERP system for your business could be your best career enhancing decision ever.