It's no secret that today's finance departments will need to rely on data going forward if they hope to remain competitive in today's market. Whether you've been attempting to transition over to a streamlined system that allows for a greater focus on data or you've already begun implementing the infrastructure that will make that possible, your enterprise resource planning (ERP) software is likely to be the most powerful tool you have in your arsenal. However, if you're like most finance professionals, that tool is one that will languish until and unless you find the time to put it to the best possible use. Learn how to best utilize your ERP with our guide below.
Overcoming Obstacles to Data-Driven Decision Making - Learning How to Best Utilize Your ERP
Data has become the object of attention for so much of the finance world thanks to the possibilities it unlocks in regard to data-driven decision making. As the CFO and other leadership roles within the finance industry rapidly evolve toward a more strategic focus, the individuals who can collect and interpret data have emerged as differentiators – using the information they have at their disposal to create more accurate budgeting and reporting models and enabling a proactive approach to the judgment-based accounting work that adds value to their respective organizations.
Unfortunately, leaders also find themselves confronted by an increasing number of obstacles to leveraging the data they need. These obstacles tend to be familiar, frustrating ones: an overburdened or understaffed in-house finance team, disparate processes further hamstrung by institutionalized knowledge and an overall lack of time available to do an ever-growing amount of work.
For some leaders, simply maintaining a status quo that already leaves much to be desired can leave them feeling like they can only tread water. Innovation can feel absolutely out of the question.
Future-Proof Your ERP Implementation - Best ERP Practices
The first step to making the most of clean data for strategic accounting with an ERP is simple – make sure that you've chosen the best ERP for your needs and then future-proof any implementation you undertake after you've chosen the software you'll use. Doing away with spreadsheet spaghetti in favor of clean, universal documentation is by far the biggest argument in favor of implementing an ERP and doing it in a way that will stand the test of time. The right ERP can operate at scale, able to handle any change or growth without requiring a full rewrite.
It allows for a full, clear documentation of any desktop procedures, and that documentation above anything else, is going to be the key to successfully pivoting toward a data-driven model. That's because messy or disparate processes – often siloed off due to tribal knowledge – consume a lion's share of the resources that too many finance departments don't have enough of: time and talent.
A lack of documentation that can easily be transferred from person to person and across business units can lead to the kind of bottlenecking that hobbles efficiency and the kind of burnout that quickly becomes turnover. To make sure that you future-proof your ERP implementation, there are certain steps you can take to facilitate exactly that:
Get a 360° view of your needs by creating an implementation team
Make sure that you get input from at least one person from every department that will be affected by the addition of an ERP. The valuable perspectives your implementation team can provide will help you determine the challenges you hope your ERP can help tackle, the goals you have for implementation and any objectives you may not have otherwise considered.
Choose the best ERP for your needs - Utilize it by Asking for a Demo
Based on the input you receive from your implementation team, look for an ERP that meets your needs, including your budget. To get the most out of a data-focused solution, you'll need to look for an ERP that:
Supports your current processes and provides pathways to improving them
Provides a way to eliminate process workarounds
Allows for collaboration across departments
Can grow with you
Start Here: We Ranked The Best ERPs For Midsize Businesses
Clean up your data as you migrate it
Once you've found the ERP that's the right fit for your organization, a best practice for data migration is to start the process with your end goal in mind. When a key goal is to facilitate data utilization, your initial migration presents a crucial opportunity to clean up your existing back end data.
Determine what naming conventions you will use for processes, customers and vendors and then document them. Eliminate redundancies, get shared data locations and access protocol on paper, and make sure that when you're ready to add new information, everyone sticks to this documentation. This keeps your data clean and analysis-ready in the future.
Create a robust onboarding and ongoing training process
Onboarding and training is the way that you'll keep processes efficient and safeguard those processes – and the associated data – against institutional knowledge. Before you go live with your new enterprise resource planning software, make sure everyone knows how to best utilize the ERP and can demonstrate that they do.
This is also the time to review your current processes and capture any tribal knowledge that already exists. Pay attention to how your team approaches your documented processes. Do they veer toward process completion that exists outside of the parameters your team has set? Now's the time to examine that. You may discover institutionalized knowledge and uncover the need to add to or change some processes.
Data Quality Issues on Your ERP & How To Improve Them
Data quality is so important to getting the most out of what your ERP can offer that it's important to address it separately. Redundancies, messy entry and gaps in information are all examples of poor quality data, but specific data issues are widely varied and depend on everything from the industry your company does business in, to whether the individual performing data entry was having an "off day" when they came into work.
Whether it's the price change you made months ago that was supposed to be temporary but persists for reasons unknown, "ghost inventory" at any point along the supply chain, or discrepancies that make account reconciliation practically impossible, dirty data has one major thing in common: it obstructs the path to data-based accounting strategy.
You'll spend so much time on workarounds that amount to duct-taping processes together that you won't have any time for anything else, and even if you did, you'd be starting with inaccurate information, making any strategy you are able to work up faulty from the start.
The best time to square up your data quality issues is always going to be before you make a major change. You want to start on your source platform and identify any potential issues in your data quality before it reaches its destination. For example:
Unfulfilled, ancient sales orders or negative stock
Outstanding invoices under a dollar
Duplicate customer identification information entries
Untidy miscellaneous entries that would benefit from their own processes
Record what you find as you clean up your data, any changes you plan to make, and any changes you actually do make before your implementation. Less is always more, so work with the goal of paring down and streamlining.
Take Full Advantage of Your ERP
With so many integrations, modules and features available across ERP software platforms, a lot of companies can feel overwhelmed by what they're working with. Add that to all of the technology that organizations deploy for everything from communication to customer relationship management, it can start to feel like too much to keep track of.
This tendency to be "oversoftwared" can lead to analysis paralysis and it illustrates why it's so important to bring the team members most likely to be affected by data issues into the fold – whether you're just beginning to look at your options or need to add to, make changes to or upgrade the modules you already have in place.
There's no way around it: ERP and change management require a substantial amount of time and effort. Even if there's plenty of enthusiasm to go around, time can be very hard to come by. It's worth it to bring a third party into the mix to serve as a guide and assist with the undertaking.
Outsourcing partners can straddle the line between consultancy firms and implementation experts, and serve a very important third purpose: the data cleaning and institutional process capture that's so necessary to making the most of your ERP are built into the knowledge transfer stage when you decide to move costly, labor-intensive transactional work offshore.
Using An Outsourced Accounting Partner to Address Data Concerns - The Key to Best Utilize Your ERP
Choosing a finance and outsourcing provider that has a proven track record of taking on the mantle of strategic partner could be the secret weapon your arsenal is missing. Not only do you free up valuable time for reinvestment by allowing your in-house team to switch from bookkeeping drudgery to value-added accounting strategy, you'll also enjoy cost-savings that can range from 50 to 75 percent less than what you're already spending.
By choosing one that's technology-agnostic and can work within your existing or planned ERP platform, you can streamline your processes as you document and leave the heavy lifting of data cleansing and migration to an experienced expert, all without relinquishing control of your valuable data. Learning how to best utilize your ERP is imperative for your business success, and having a partner that can transform that data for your growth strategy is vital to achieve short and long-term goals.
For over 35 years, Personiv has been the partner businesses trust to unlock new efficiencies in back office operations. Our solutions are customer-centric and completely customized, and our talented remote accounting professionals work side-by-side with your in-house teams. You can start with a team as small as just one and rest assured knowing that a solution with Personiv can operate at scale and grow with you. Get in touch to get started with data driven decision making today.