How to achieve business and financial-system implementation success White Paper

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How to achieve business and financial-system implementation success White Paper
White Paper
How to achieve business
and financial-system
implementation success
March 2010
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Overview
Organisations about to embark on a corporate-wide business and
finance IT implementation can look through history at any number of
projects that came in over budget, were late in being delivered and
which failed to meet the expectations of their users. But while scare
stories make headlines, there are many such implementations that go
smoothly, are delivered on time and to budget and do exactly what
they were intended to do from the outset.
So what are the secrets to successful implementation of business and
finance systems? What are the common mistakes that drag
unsuccessful projects into the mire? And what lessons can we learn
from both? In this paper, we will look at how organisations regardless of size - can achieve success in such projects. We will look
at what characterises success and what blights failure. And, ultimately,
we will look at the corporate benefits of a well-executed business and
finance systems implementation.
Focus on people and process, not technology
It goes without saying that, as business users, finance directors and
accountants are not the most technically-savvy people in the
organisation. However, a common trait in failed projects is that they
are led by the IT department with little or no involvement from the
business user at the early stages of project planning and scoping.
Finance directors must get involved at the very beginning, they must
be clear about what they want to get out of a new system and they
must communicate this clearly to both IT and other senior leaders.
Too often, projects are embarked upon without due and proper
diligence from the stakeholder.
Create a cross-functional project team
Before the first words are written on a scoping document, a crossfunctional project team should be put in place comprising of key
stakeholders from the organisation, including finance, IT and sales at
a minimum. Charge a senior finance professional who is enthusiastic
about the benefits of technology to lead this team in partnership with
IT and document a top-level view of expectations. The team should
meet regularly and act as the conduit between the relevant functions
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that will be impacted by the implementation, feeding back ideas and
concerns and, in time, developing a detailed scoping document which
must be signed off by all stakeholders.
By far the most common reason for project failure, is unrealistic
expectations and a lack of communication. This helps to nullify both.
Take a holistic view
The project team is responsible for looking at the current corporate
situation and should highlight existing issues such as informational
silos where data is hostage within individual business functions and
not available at a corporate level. Bad practice is endemic within
many organisations, by stepping back and taking a holistic view of the
organisation, the project team is able to highlight areas that a new
finance and IT system is able to address.
Key here is communication - the project team-leader must have
regular meetings and updates with all stakeholders of the new system,
especially if they do not have a representative on theproject team.
With a business and finance system potentially impacting finance,
sales, HR, procurement, supply chain, warehousing and distribution,
this is no easy task but is crucial to setting expectations and scoping
the project successfully.
Get your house in order
A common problem with IT projects is that good quality systems are
built on bad organisational processes such as the siloed-based
working talked about above. It is also common that different divisions
or functions within the same organisation will refer to the same data
in different ways, having different ways of referring to products or
customers.
Use this time to create policies and KPIs that support the type of
operational behaviour your business and finance system will rely on
in order to function correctly. Create a single version of the truth for
all data - sales, distribution, finance, etc. Remove any reliance on local
spreadsheet working and ensure that stakeholders understand the
implications and benefits of the future implementation.
This helps to improve stakeholder buy in at a user level. Nominate
champions within each business unit to communicate the benefits
and, equally, to pass back concerns to the project team.
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It’s all in the scoping
Before a supplier shortlist is drawn up, the project team must develop
a full project-scoping document which is signed off by all relevant
stakeholders. The document should include all high-level objectives,
timelines and budgets. The secret to a successful project is sticking to
this original document and avoiding scope creep, which so often
blights failed implementations. If the project scope does change,
budgets and/or timelines must also be amended to compensate.
The time and effort put into making the scoping document as
watertight as possible will reap huge dividends in the long run - but
it’s also worth saying that an over-complex and too-detailed job scope
will cause more harm than good.
Organisations that follow the procedure above and avoid over
complicating the issue will give themselves the best possible chance
of achieving a successful business and finance system
implementation. It lays the foundations upon which a nextgeneration platform can be built on. Doubtless, the causes of many
failed projects can be traced back to performing one of the above
tasks badly, but it’s still only the beginning of the journey.
Supplier selection: Do your research
There is a huge array of business and finance technology solution
providers selling software, from major enterprise players to best-ofbreed software providers like Access. By successfully completing a
watertight scoping document, organisations will be in a position to
determine what type of solution provider best suits theirneeds.
At this point, a shortlist of potential suppliers should be drawn up,
including outsourcing providers should that be a preferred route. This
is without doubt the most critical stage in any implementation organisations that choose the wrong partner for their needs face a
difficult, expensive and time-consuming process to extract themselves
from a contract.
The three Cs: culture, capability, cost
It’s important not to fall into the trap of going with what you know
because it appears the safe option. The old adage of ‘nobody gets fired
for buying IBM’ might be true to some extent, but with software that
plays such a fundamental role in the operations of a company the
three Cs of culture, capability and cost must be satisfied.
There is little point entering into a long-term relationship with a
supplier if there is a potential conflict of cultures. While the
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capabilities of competing software products are often similar, some
are certainly superior to others and will be a better fit for your
organisation. Finally, while cost certainly shouldn’t define your chosen
supplier, it will certainly have a strong influence.
Choosing the right supplier
If your cross-functional project team is satisfied that the scoping
document is complete and it has been signed off by all relevant
stakeholders, a supplier shortlist should be drawn up and a Request
for Proposal (RFP) submitted to potential partners. This is a crucial
stage in the process and should be treated as a two-way collaboration
where the scoping document is used as a starting point for
negotiations.
The scoping document is likely to change during this process as
potential vendors will have their own views on what is realistic, what
works and what is cost-prohibitive. This is an important stage in the
tendering process, as suppliers will have a great deal of experience in
similar implementations and will know where common problems are
likely to occur.
It makes sense to reach out to as many different suppliers as possible
during this stage, including best-of-breed software providers and
enterprise-class ERP vendors. While it is tempting to be swayed by the
promises of existing software partners and the potential of a single
vendor providing all business software needs, this can become a false
dawn. Specialist business and finance packages can often be
implemented quicker, are more tailored to the specific task at hand,
with experts to help deal with complex - and changing - finance and
accounting issues, and are simple to integrate with existing legacy
systems. Neither should the promise of a single vendor be taken for
granted, as future merger and acquisition activity is likely to put paid
to that.
Regardless of the supplier ultimately chosen, rigorous due diligence
must be performed into issues such as help desk response times, past
disputes, future development plans and so on.
Avoiding the problem supplier
There are many things that should sound alarm bells and be avoided
when selecting business and finance systems. In some instances,
these are obvious, in others not so much.
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Proprietary databases and limited integration
There are many ways in which users might want to view and analyse
data, so selecting systems with proprietary methods of storing that
data can cause problems in the long term. Similarly, system should be
included with middleware which allows straight-forward integration.
Sole distributors
Packages that are only available through a single distributor can lead
to problems with price increases or changes in support options. Make
sure that your chosen partner also has access to the source code.
A lack of third-party verification
Systems that don’t have accreditation from bodies such as the
Institute of Chartered Accountants may not be truly fit for purpose.
Similarly, those products achieving independent recognition - such as
industry awards - should float to the top of any selection process.
Equally, look at the client lists of your potential suppliers.
A lack of flexibility
While part of the reason for implementing such systems is compliance
with rigorous legislation, there should be a degree of flexibility to
allow users to correct wrongly entered data. That way, an accurate and
robust audit trail is created.
Contract terms – the devil’s in the detail
While selecting the correct vendor is a complex process, if done right
it will get your business and finance system off to an excellent start.
However, it’s also just the beginning. There can be a minefield of
issues in a standard software contract which, if not managed correctly,
will come back to haunt the buying organisation. Below are some
common traps to look out for.
Licence limitations
Make sure that the licence does not limit the usage of the software.
For example, limitations by region are relatively common but should
certainly be weeded out of any contract before signing. So too should
platform limitations, corporate entity and job function.
Maintenance limitations
Make sure that similar limitations in maintenance are not included in
the standard licence. Support is regularly limited by region, by time
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zone or by territory and in some cases remote support may be the
only offered maintenance in the standard contract. Also look into
what the vendor classes as an update versus an upgrade, as these can
have huge consequences.
Duty of care
If your supplier is an expert in business and finance systems, it has a
duty of care to qualify how it will meet your business objectives, what
it is unable to address and what the effect on your business will be
because of this. The net effect is that responsibility for fitness-forpurpose of the software package lies with the supplier and not the
buyer.
Commitment to development
Business and finance systems are, more than most software packages,
hostage to changes in regulatory requirements and legislation. It is
crucial that commitments to these are written into the contract. In a
similar fashion, software vendors can and should be expected to keep
pace with the wider industry and regular updates and upgrades be
forthcoming.
Vendor management
Signing a contract is just the beginning
With so much work having gone into the preparatory aspect of
embarking on a new systems implementation, it’s important not to
lose sight of post-contract vendor management. Performance metrics
and indicators should be jointly developed, measured routinely and
often and reported back to the supplier in order to prevent small
issues snowballing into major problems.
Again, cross-functional reporting on the success or otherwise of the
system is a crucial component in ironing out problems and concerns.
Relaying these to the supplier early can be the difference between a
straight-forward resolution and significant difficulties.
The end game
Successfully implemented and well thought through business and
financial systems can make an immediate and material difference to
companies. There are many benefits that can be had from adopting
leading edge technology, including not just an improvement in
process and compliance but also a fast return on investment.
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It’s important that organisations fully research what different
suppliers have to offer - while, in the short term, an organisation may
only be interested in updating compliance and reporting tools, in the
longer run they might be interested in some of the more value-add
options that feature-rich packages are able to offer.
Such features can include web-based interfaces, mobile support,
document management and dashboard business intelligence systems.
Web-enabled systems
With web-enabled systems, users are able to enter, view and approve
information regardless of where they are. This can have huge
workflow benefits, allowing projects to remain on track regardless of
the location of key stakeholders. Timesheet and expenses information
can also be captured through such systems, resulting in far greater
control and compliance.
Improved credit control
By reducing debtor days, cash flow can immediately be improved
leading to an increase in liquidity and a reduction in working capital all key issues regardless of the economic environment. Systems that
increase visability of aged debt and make the best use of the credit
controller’s time, such as late-payment reminders and flags for
debtors who breach credit limits can significantly improve the cash
position of any company.
Better cash-flow forecasting
Good cash-flow forecasting is a crucial part of financial management
and should include inputs from all areas of the business, such as
procurement. Successful forecasting demands robust and wellmanaged data, and much hard work. Software packages designed for
just this type of application are available that greatly cut down on the
hard work involved in complex forecasting models. Done well, it
provides an unequalled view of future scenarios and helps FDs plan
for any eventuality.
More streamlined budget process
Operating to budget is the watchword of a well-governed business,
but the process can be long and drawn out. A good business and
finance system will help to streamline this process. Two-way
integration with Excel allows users to crunch the numbers in a
spreadsheet and fine tune the numbers before updating the ledger.
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Integration with third-party software
Successful integration with other elements of your business can
significantly cut down on duplicate and errant data, with subsequent
benefits for the organisation. By integrating with popular workplace
software, such as Microsoft Office, business and finance systems can
become part of the corporate way of life. PO authorisation and
outstanding invoice information can be provided within Outlook,
Excel will also be part of everyday life. Integration is about letting staff
work with the tools they feel most comfortable with. However, good
software packages should also be able to integrate with third-party
systems, protecting previous investments and making investment
decisions easier.
Procurement and supplier management
Good procurement doesn’t just mean raising purchase orders –
managing supplier relations well can create real bottom-line value for
the organisation. To do so successfully, FDs must have an accurate
and up-to-date view of suppliers, including payment terms and
debtor days. Such information can be used to take advantage of offers
such as early payment discounts as well as group-level volume
discounts. Flags can also be raised for unpaid invoices.
Better Management Reporting
Any good business and finance system must have excellent
management reporting capabilities. The ability to configure reports
easily is important as it allows decision makers to focus on what’s
important at any particular time.
The benefits of business intelligence and analytical tools
An extension of good management reporting capabilities, a wellselected business and finance system will come complete with a huge
array of business intelligence tools. By presenting complex financial
metrics as easily understandable charts and dashboards, better
decisions can be made quicker. Huge amounts of data go into such
systems - ensuring that data is presented as meaningful information is
hugely important. Interactivity with Excel is an important
consideration and the use of data cubes allows non-technical users to
extract meaningful information from complex databases.
CRM
No organisation would be able to function without a good customer
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relationship management system. However, when a CRM system
successfully integrates with other systems to create a full profile of
existing and prospective customers, it becomes a truly powerful tool.
Document management
Good document management is a key component of business
software, and can lead to a huge reduction in paper use, a reduction in
storage requirements and subsequent cost savings. Having a central
repository of documents can also benefit the productivity of and
collaboration between staff.
Accounting for Carbon Emissions
An increasingly important issue for business is carbon reduction and
sustainability. Software packages that allow organisations to analyse
their carbon footprint as simply and as logically as they do their
financial performance are key in helping business leaders make real
headway in this area. Only by having access to this type of
information can the right decisions around how to reduce emissions
be made.
Payroll
Payroll applications that integrate seamlessly with timesheets,
expenses as well as third-party applications such as key-card entry
systems can drastically simplify the payroll process. All statutory
requirements are covered, while automation of everything from
directors’ pay and NI contributions to student loan calculations
reduces complexity. Other staff benefits, such as season ticket loans or
payments of benefits in kind can also be handled.
It’s a long list of additional capabilities, which leading-edge business
and finance systems are able to bring to organisations today. The
potential benefits are huge and the return on investment quick. And
while all of the functionality listed above may not be immediately
relevant to everyone, choosing a system which is scalable and which
integrates with third-party software means that FDs can make buying
decisions now safe in the knowledge that additional functionality can
be added when needed, easily and cost effectively.
Conclusion
There is no doubt the implementation of a new business and finance
system is no easy task. With so many stakeholders in the business
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being affected by the decision you make, it’s almost impossible to
please everybody. However, with the right preparation and by
choosing the right software partner, organisations can significantly
improve their chances of achieving a successful project.
As we point out in this paper, preparation doesn’t just mean
researching software providers. The hard work begins a long time
before that with stakeholder engagement, expectation setting and
project scoping required before potential suppliers are even
considered.
However, by following this straightforward process, by resisting scope
creep as much as possible, by including key stakeholders in the
system design process and by feeding back concerns and ideas to
relevant project leaders the chances of achieving a successful
implementation are greatly improved.
But make no mistake, those organisations that implement a leadingedge business and finance system, will steal a march over the
competition. The benefits listed above are proof of that.
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About the sponsor
Access will give you the advice, tools and clarity you need to make
effective decisions, quickly and with certainty.
As both a business-focused consultancy and a specialist software
developer, we combine our innovative award-winning software with
practical experience to deliver a solution that’s exactly right for you
and your business.
Access UK head office
The Old School
Stratford St Mary
Colchester
Essex
CO7 6LZ
United Kingdom
T: 0845 345 3300
F: 01206 322956
E: [email protected]
http://www.theaccessgroup.com/
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