Category Archives: ERP

The Power of Software Integration

 

ERP Software Integration
Maximize the impact of your CPM software with automatic integration to your ERP

Users of popular consumer software applications, especially mobile ones, are used to performing daily tasks such as scheduling activities on their calendars in their e-mail applications, either from their home or office computers, or most often, from their mobile devices.  In fact, many take the results of these activities for granted, not giving much thought to how data moves from one application to the other.

With a push of a button, or, more accurately, a touch of the device’s screen, your e-mail meeting invite creates an entry into your calendar with all needed details. These activities would not be possible without integrating two or more applications, either locally or in the cloud, to create a seamless workflow, with minimal user data entry, promoting accuracy and completeness of data possible only with automation.

Business software applications are no different. Their users perform daily tasks such as processing receipts of inventory into warehouses, guided by existing and approved purchase orders and suppliers’ packing lists with bar-coded bags or boxes of items that upon scanning automatically update inventory records, PO records, inventory sub-ledgers and GL control accounts. Posting a customer payment on an open invoice causes this invoice balance to be eliminated or reduced, while automatically updating the AR sub-ledger and the GL control account balance.

These automated activities are possible because of integration between the inventory and accounts receivable programs in an ERP solution and the system’s general ledger. There is minimal data entry users must perform, and with that, accuracy and completeness of data and other information improve dramatically.

CPM (corporate performance management) software is a good example where integration is important in achieving the desired results, with minimal user interaction and no data input errors.

Here, the data from the ERP or accounting software is integrated with the CPM solution and periodic account balances, or even transaction activity, in each period are automatically provided. The planning and budgeting software is integrated with the reporting or analytics solution, and both the actual and budgeted data is displayed and analyzed as soon as a financial period is closed. Gone are the days of exporting GL data to a text file that must be uploaded to the CPM solution, mapped to the solution’s databases’ various data fields, and then independently mapped to the analytics software to obtain the desired reports and formatting.

A good example of integration between popular SMB (small and medium-sized business) GLs and a CPM solution is Centage Corporation’s Link Maestro. With Link Maestro, a user can obtain all GL account balances, and even transaction activities, for many popular GLs.  The process is entirely automatic and accuracy and completeness of data is guaranteed every time the process is run.

Once the GL data is in the Budget Maestro CPM application, analysis can take place immediately using Analytics Maestro. Actual accounting data and budgeted data automatically flow to the analytics application and are displayed in the predetermined format for every accounting period. This, again, is possible with integration–two software applications, the ERP and Budget Maestro, tightly integrated by Link Maestro.

Now even SMBs can achieve that level of automation afforded by integration, previously available only to very large organizations and through lengthy and expensive customization of the company’s software. Let your computer and software do all the tedious work in an error-free environment while you spend more time analyzing the data which ultimately allows management to make timely and informed decisions.

Why Out-of–the Box Implementation and Integration is Important for SMBs

ERP related concepts in word tag cloud isolated on black background

The solution should allow users to do most of their own implementation and setup with minimal outside help

Two of our larger clients went through system conversions in the last five years in the hope of implementing an all-encompassing enterprise ERP solution.  What was supposed to be a straight forward project with well-defined deliverables and a reasonable timeline turned out to be the exact opposite for both companies:  Major budget overruns, long delays in achieving practically every project milestone and seemingly endless amount of customization and software code modification in order to accommodate everyone’s needs.

One thing in common to both implementations was the fact that all planned integration of the new software with existing pieces of software and sub-systems still had issues after the implementation was complete and some still don’t work as expected to this date.

What was evident was the large number of outside consultants and the extra stress on company employees having to interact with the consultants and participate in testing and other project activities.

Even though our firm was not directly engaged in these implementations, our work in helping with consolidated financial statements and disclosures was greatly impacted as the data available to us to do our work was at times unreliable and insufficient due to poor integration and questionable report writer scripting.

I imagine many readers of this blog don’t find this experience particularly unusual.  Most people with enough experience in accounting or finance, working for even mid-sized organizations experience this from time to time, especially with company acquisitions, mergers and other drastic changes to their business organizations, where existing systems are determined to be insufficient or lacking in certain areas, or perhaps not able to deliver on the reporting requirements of management.

Unfortunately, such projects are not limited to only very large companies where there usually is a legitimate need to implement a better solution or perhaps more efficiently integrate existing systems with a centralized accounting and finance package. It is also not surprising that in smaller organizations this can be very taxing on the company and its employees (and indirectly customers and vendors) and will pose a long term financial burden at best.

Often, smaller companies get caught between legitimate needs to improve their information systems, streamline operations and improve reporting capabilities and delivery, and IT and software solution vendors and their partners / consultants who manage to give these prospective buyers bad advice. It usually ends up with the customer making purchase agreements and engaging the vendors in projects that at times seem will never end, all to the detriment of the customer. Once the software is implemented the customer is usually committed to it for a length of time (SaaS solutions) or is so involved in the new implementation and conversion of the old data that no reasonable changes are possible for a long time.

The costs sunk into such projects can be significant, even for a smaller company. In the case of ERP software implementations, I’ve seen consulting costs to fully implement a system exceed the initial perpetual license fee by 400%-500%. In the case of SaaS delivery, although there is no large up front licensing expense, consulting expenses can still be sizable and often exceed the original budget.

Planning, budgeting and analysis software is sometimes as difficult to implement as ERP solutions and the integration to the ERP software accounting GL can be difficult and almost always requires outside consulting.

SMBs should choose to go with a more reasonable approach and maximize the out-of-the-box installation experience, with minimal customization. When it comes to CPM class software for SMBs I really like Centage Corporation’s approach with its Budget Maestro suite. The entire package can be installed by the customer (on premise version) or is ready to implement and use immediately for the Cloud version. With a solid GL link like Link Maestro, many of the more popular actual accounting GLs are available to automatically link to the Budget Maestro built-in GL. The overall implementation time and expense are minimal and you can be up and running and productive within days or weeks and not months or years.

The best part is that users don’t have to give up functionality with this approach because the system was designed to be adapted to almost any business type. With its built-in business rules available to users in every budget area, and built-in, GAAP compliant accounting rules, you get a system that uses the budget to drive all required financial statements in perfect synchronization with one another.

To me this is the best of both worlds: Quick and inexpensive out of the box functionality and immediate integration with the actual accounting system (automatic for several popular GLs, or through an export-import step for all others). This quick, predictable and inexpensive implementation is something I think SMBs cannot afford to not consider.