Organizations give many reasons for replacing their Enterprise Resource Planning (ERP) or financial system: corporate expansion, lack of functionality, outdated UI, rigid scenario simulation, hard to use, cumbersome data analysis, problems with user deployment, system communication issues, and so on.
Any one of these reasons can get an organization thinking about replacement. But, are they all equally valid? Will simply changing the system address all of these issues?
The right reasons for deciding to replace your financial system
Before replacing your system, you need to decide what the issues are, what features are missing, and what benefits you're looking for, as these will be key factors in deciding whether you want to replace your current system - or not.
If your reasons for replacing it have to do with the system’s data integrity issues, data security, or its ability to support a certain number of users, this should tell you that it may indeed need to be replaced.
Similarly, if basic general ledger functions, purchasing, accounts payable, billing, and accounts receivable are either not integrated or lacking, you will most likely be looking for ways to correct this, and may even be considering replacing your system.
However, if your system does support financial accounting, and can record purchasing and invoicing processes, but some features are lacking around these processes, your first step should be to decide: does the system need to be replaced, or does it just need to be supplemented with additional software.
Financial system add-ons
These days, all kinds of software can be connected to different financial systems: HRMSs, client management systems, consolidation systems, budget systems, and analytics software that has cost analysis and/or reporting and dashboard features.
Because they can be used to improve very specific functions within the organization, identifying the need is a key step. Add-ons with the right features can supplement your existing system, making life easier for all concerned, and enabling you to keep, rather than replace, your current processes and systems.
With today's open systems, integration processes that were once a nightmare are now relatively straightforward, as long as the IT teams check that the systems they will be integrating have the necessary connectors to work together.
Missing feature for Finance
In our experience, financial accounting systems often perform their core functions well but fall behind when they are required to process data to generate management information. For example, the system could have limited functionality in terms of generating reports or providing access to dashboards.
Data mining, budget iterations and monthly monitoring, scenario analysis, and medium- and long-term planning are other areas where even the most advanced of the basic financial systems can prevent you from efficiently doing your work.
With add-ons, you may not have to replace your integrated management system after all, which can be expensive and will not necessarily give you the full potential of a best-of-breed, niche software solution. Also, attempting to acquire a core system with all the desired features could mean spending a lot of money on a system that the organization may not have the resources to manage. By integrating with the organization’s core system, add-ons like the Decimal Suite support Finance and add real value to the organization.
In conclusion, while the features in some ERP systems may provide users with a basic level of performance, in many cases, the only way to meet the needs of the entire organization is to acquire add-ons to address those needs, or else purchase a very expensive solution.
This takes us back to the single system/best-of-breed system debate, with proponents of the former claiming that a comprehensive, all-in-one solution is the best way to address an organization’s issues, whereas defenders of the latter prefer to add specific best-of-breed add-ons to generate critical management information, often at a much lower cost.
So, before embarking on a massive project to change your entire financial system, first take the time to identify your needs and make sure your new system will address them.