IDU | Budgeting Forecasting and Reporting Solutions: July 2015

Monday, 20 July 2015

A Best of Breed Environment

As business owners, we are understandably always looking for the “top” products and the “best” tools to optimise our ability to manage our companies. Until recently one of those choices was selecting between Best of Breed products and Enterprise Resource Planning (ERP) software. The environment has finally evolved to the point where it is no longer an either / or decision. We now have a real choice, with the ERP system being just one of the options available to us as opposed to the only choice, as some over zealous ERP salesmen would have us believe. 

Best of Breed products are dedicated products designed to be the best at what they do. Back in the day, our companies had to purchase software from an assortment of different vendors to get the best offering for each segment of our business – accounting software from one vendor, human resources from another, and project management software from yet another, for example. This resulted in a range of business needs being serviced by a plethora of applications running on a host of different databases on a variety of hardware platforms, creating an integration nightmare for all concerned. 

Out of this chaos, ERP software emerged offering us a single platform and a single database with all business requirements being met from a single application - great in theory and at the time seemingly heaven sent. There were of course issues, including a lack of flexibility, a lack of user-friendliness and an inability to meet niche needs. ERP vendors claimed their integrated systems offered all the business applications you might need, but it was extremely rare for all of these applications to be best of breed.

Over time the database environment became less complex, with less players (today Microsoft SQL and Oracle have become the predominant players), and the introduction of standard middleware that enabled simple integration between databases. Likewise, the platform environment became more streamlined with the introduction of virtual machines and communications protocols that enable real-time and easy connectivity. 

The result is a relatively seamless Best of Breed environment, where software packages need not be sitting on the same physical platform or running on the same database to deliver quality solutions to businesses. Companies can select the applications best suited to their business requirements, whether they choose to have an all-in-one system or a variety of individual packages. You can easily introduce new specialised products to your existing software and your core data processing engines without fear of drawn out integration complications. We can now have all the benefits of fast simple integration without being restricted by a limited choice of applications.

*As published in Accountancy South Africa magazine in October 2014

Monday, 6 July 2015

Visionary Corporate Performance Management

The difference between visionary corporate performance management and mere management often boils down to just one thing: having the right tools for the job.

True vision is founded in reality. To create such a vision and carry it through, you need to know what’s going on in every aspect of your business… you need quality information.

The bigger your business is, the more difficult it is to find that information, and to know that what you’re getting is accurate. Implementing a quality ERP system can help, but often the information it provides is hard to understand for anyone who is not a financial wizard. Other managers end up creating their own systems to try to make sense of it all, usually on their own carefully crafted spreadsheets.

I know we have been giving spreadsheets a bit of a beating lately, but the reality is that they can be dangerous to your business and leave you guessing on so many levels - Which version is the most recent? Which version is the “most” accurate? How many formulas across how many spreadsheets does that one corrupted cell influence? How do you manage your business at all, let alone with a sense of purpose or vision, when the best you have to work with is your “best guess”?

The answer lies in a central system where all your information can be stored — the ERP I hear you cry… But no, you need a specialised corporate performance management system; incorporating budgeting, planning, forecasting, analytics and comprehensive reporting, all pulling on your central store of information; forming a bridge between your ERP system and the rest of your business. 

Your CPM software needs to make your financial information easily available and easily understood by non-financial managers. When you know that your information is accurate, real-time and easy to communicate, your course becomes clear. Quality information helps you to set goals for your corporation and to make your expectations clear. It also helps you to make the best decisions for your business’s future. 

Equipping yourself with the right information tools is the first step to taking charge of the direction your business is headed, and making the leap from idealistic to visionary corporate performance management.