What is the value of integrating your FP&A software with your current provider’s ERP suite? – BARC reports
Finance departments are increasingly expected to consistently provide detailed insights into organizational performance, closely monitor the development of key figures in real time, and quickly update plans and forecasts in order to respond to changing circumstances.
Up to the minute insight – and the ability to translate it quickly into action – is a vital ingredient of informed strategic decision making. Unfortunately, the kind of integrated data visibility required to deliver this is often not achievable with the tools that most organizations rely on. Many organizations still rely on Excel as the lowest common denominator to support their planning, financial consolidation, and data analysis, but this approach hasn’t been fit for purpose for some time.
Modern financial planning and analysis tools can provide finance and other controlling departments with the visibility to provide this kind of insight. But picking the right software for your organization is never an easy task.
So how do you find the solution that fits your specific needs? BARC’s latest research note explores this question from a unique angle: should companies buy their FP&A solutions from the same vendors as their ERP?
Click to read Increase service excellence and profitability with ERP Gated
After all, ERP systems are typically the operational data sources of record for all aspects of corporate performance management, and likely already contain a great deal of historic financial and operational data needed to support strategic decision making. A solution for both ERP and FP&A systems provided by the same vendor can carry significant advantages – particularly when it comes to superior technical integration.
But, as is usually the case, there isn’t a one-size fits all answer to the question. Here’s our 3 favorite tips on selecting your FP&A supplier from BARC’s research on the subject:
1. Functional and technical factors are important – but pay close attention to time-to-value
Mid-sized organizations are more dependent than large organizations on a solution’s ability to provide benefits as quickly as possible to ensure ROI is achieved as quickly as possible and the expense incurred implementing a new system can be justified. “Time-to-value” is therefore just as important a consideration in this segment as the technical specifications and functional capabilities of the solution.
Potential “project accelerators” (like integrations with your ERP system, predefined data models and processes for key use cases that come supplied with a solution as standard) can potentially make a decisive contribution to your selection.
2. ERP with integrated performance management comes with distinct advantages…
The ability to quickly and accurately analyze ERP data is becoming more and more important to financial planning in many organizations, and many ERP vendors now offer FP&A and performance management solutions to facilitate this.
These tools generally offer in-depth technical integration, as well as pre-defined workflows, processes, and solutions for typical customer use cases.
This produces a distinct set of both technical advantages, and business and functional advantages. On the technical side, ERP vendors that offer FP&A solutions as add-ons or parallel systems will be able to fully leverage their ERP’s data model and create logical connections for data access more efficiently. This means data can flow seamlessly between both systems as a single source of the truth, making analysis, budgeting, forecasting, and reporting a simpler process and allow planned and actual data to be compared directly within the ERP. Via direct integration, the need to switch between different environments to perform ERP and FP&A tasks can be completely eliminated.
From the organization perspective, because ERP vendors often focus on specific industry verticals, they are likely to have a much more in-depth understanding of their ideal customer’s requirements for performance management and financial planning and analysis.
This means many providers offer a comprehensive portfolio of prebuilt solutions and modules tailored to support common FP&A needs, meaning solutions can often be implemented in a “plug-and-play” approach that requires minimal customization. This can significantly cut down on implementation time – making for quicker time-to-value and ROI recognition.
3. … but this doesn’t take a standalone solution off the table
Many organizations rely on a huge number of source systems for the financial and operational data required for their FP&A processes. This means that they may require their FP&A to stand apart from their ERP to facilitate data capture from multiple source systems via defined data integration processes, or from a single data warehouse which pre-harmonizes data from their multiple source systems.
The benefits and utility of an FP&A solution ultimately depend on their ability to cover an organization’s unique requirements, but being able to integrate operational ERP data, with a dedicated financial planning and analysis tool can help organizations make more informed decisions.
Ready to learn more?
For a comprehensive overview of the pros and cons of an FP&A solution provided by your ERP vendor, download your copy of BARC’s latest research note on the subject here.
