A modern, integrated Enterprise Resource Planning (ERP) system is your financial and operational backbone and reaches into all areas of your business and value chain. Traditional, standalone financial systems automate only a single business function and not an entire, cross-functional business process; they demand manual, labour-intensive processes, such as re-keying data into separate systems. Legacy systems are also inflexible as they don’t permit organizations to change their business processes to adapt to changing business requirements nor do they provide visibility across the organization—let alone across the extended supply chain.
If your organization faces any of these financial issues, then a next-generation integrated ERP solution will be able to help:
• Do you need financial transparency across all of your business units or is your organization still using spreadsheets to manage its financial health?
• Do you operate in several countries and are you planning on adding new businesses by growth or acquisition?
• Are you subject to generally accepted accounting principles (GAAP), International Financial Reporting Standards (IFRS), Sarbanes-Oxley, or any other national or international financial oversight?
Financial Transparency and Visibility
First and foremost, an enterprise needs to have a finger on the financial pulse of the company, and as the pace of business continues to accelerate, you must move rapidly with precision and agility, reducing reaction time and optimizing financial performance. You can’t afford to miss an opportunity or delay a necessary course adjustment. That means that everyone in your enterprise who impacts the financial results must know how the business is performing on a daily basis. In a global business environment, forward-thinking and planning is vital. Critical financial metrics can’t be permitted to get lost in the information morass.
In response, a new breed of ERP has emerged that includes operational tools that measure performance as business happens; managing workflows, and alerting people as they work. Today’s information workers want decision support in real-time, and they want it deployed in the tools they already use, day in and day out. Today’s enterprise-level financial systems should also come standard with embedded executive dashboards and graphical KPIs designed to give executives and line of business managers alike the strategic financial data required to make critical short- and long-term decisions. Strategic use of these resources allows you to manage your company by exception, as opposed to micromanaging the increasing number of financial variables and demands being placed on your company. Some examples of standard financial dashboards and KPIs that you should include in your evaluation of vendors include calculation of days sales outstanding (DSO) and days payable outstanding (DPO) to determine your organization’s cash flow position, supplier performance metrics, sales order backlog and scheduled shipments, and so on.
Support for the Global Enterprise
There are unique challenges of running an organization that operates internationally and opportunities with respect to consolidation for tighter control and reduced operational costs, enterprise wide visibility, intercompany supply chain management, and financial consolidation. Integrated, modern ERP systems come with global support embedded, providing the centre-point for the organisation’s global transactional infrastructure.
Sound enterprise financial management practices should be designed to automate and streamline your financial business processes by providing the tools needed to create value through monitoring financial conditions for timely decision making. The enterprise application system acts as an integrated, single repository of data which provides an accurate view of all of your financial data including a 360-degree view of your customer – from customer specific credit information to consolidated order, invoice and payment history. These capabilities should almost be considered a ‘given’ – good enterprise financial systems should always do these basic functions.
Multi-country functionality surrounds not just having the applications screens appear in the localized language. A modern ERP system will include a financial management application that is both global in its deployment AND local in its configurability to meet local financial and tax regulatory requirements. You need to be able to deploy and manage master data to ensure that your company and disparate business site information meets local regulatory requirements and also provides the consistency needed for real-time distributed operations, leading to greater customer satisfaction, operational efficiency, and ultimately business performance.
Integrated Governance, Risk, and Compliance (GRC)
Achieving financial visibility and effective controls within the enterprise can be a formidable challenge when many of the processes and procedures in place remain manual and fragmented. Effective governance, risk and compliance (GRC) initiatives help companies and their employees stay compliant, and ensure that employees at all levels of the organization are aware of the associated risks of non-compliance. Expectations are rising among auditors, regulatory bodies, customers, and other stakeholders regarding the protection of corporate information against piracy, fraud, and sabotage concerns. ERP systems control the majority of the information that could potentially be at risk.
Next-generation ERP delivers GRC functionality through a combination of embedded capabilities, modules and related services. Compliance is at the heart of the applications and is consistent with published international standards and best practices. These include published standards in corporate and financial governance such as IFRS and GAAP while also incorporating support for international trade standards such as restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS), Waste Electrical and Electronic Equipment (WEEE) directive, and the North American Free Trade Agreement (NAFTA).
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