Is your finance application holding you back?

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1 Is your finance application holding you back? The risks and costs of relying on outdated or restrictive systems. White Paper

2 Is your finance application holding you back? TECHNOLOGY is an essential tool in today s economic environment. And - while it is possible to survive without the latest business applications - relying on antiquated, limited or restrictive systems could seriously threaten your ability to keep growing successfully. Typical problems are: either an inability of legacy software to handle multiple languages, currencies, companies and different reporting regimes effectively. or the inflexibility of enterprise-level ERP and finance applications that make them difficult to use to support specific business processes and the operational needs of smaller or more remote parts of the organization. Whether it s international trading, buying or selling new divisions, diversification, growing the business, setting up a new operation or adopting smarter process support, companies could easily find themselves losing out to competitors that have equipped themselves with more appropriate technology. Moreover, as the regulatory environment becomes more complex, and the call for good governance and sustainable value creation more powerful, relying on outdated or inflexible systems that cannot produce accurate, timely or reliable data offers little assurance. No matter how good an organization s growth strategy, there is a very real danger that it may simply become an empty promise, unless the right tools are in place to execute effectively. However, for many organizations, these serious risks are still outweighed by concerns over system implementation and the costs involved. Simple inertia is a major issue too - after all, if it isn t broken, why fix it? Inertia is costly But, in reality, sticking with a struggling legacy system is neither a cost-saving option, nor good business management. Kevin Roberts (Vice President of Business Development at cloud accounting specialists, FinancialForce.com) explains why: Migration from a legacy system based on DEC VAX to one on Microsoft SQL Server for example could mean the difference between paying out $75,000 in annual hardware maintenance to $2,000. At the other end of the scale, new or growing organizations that are still relying on spreadsheets or basic PC-based programs can also make significant savings by adopting an on demand or Software as a Service (SaaS) approach. This can make enterprise level tools both accessible and affordable, while freeing up valuable time and resources and offering a lower cost alternative to software and hardware purchase, implementation, training and maintenance. The immediate return on investment is obvious. Furthermore, reliable, timely and accurate data is essential for decision making and enterprise-wide control. Making decisions on inaccurate or old data could prove fatal for a business. Even otherwise effective enterprise-level ERP and finance systems can make you a victim of their size and complexity - creating barriers to process improvement and business expansion. It can often be just too costly and time consuming to provide the integration and customization to support smaller teams or specific operational requirements. As a result, your teams basic day-to-day processes and procedures have to be supported by inefficient work-arounds and manual systems, complicated spreadsheets and repeated rekeying of data that should be shared automatically across your systems. 2

3 TIME TO RE-EXAMINE YOUR FINANCE SYSTEM? The warning signs: Manually manipulating or re-keying data. Relying on meaningful information produced outside of the finance system. Cutting and pasting data in spreadsheets before you can use it Costly maintenance. Loss of system support. No spares or engineers with system experience or knowledge. Reliance on programmers or highly technical users to change reports. Unable to add additional currencies or companies. Bottom line: Do you know what the hard costs are of running your existing application? WHAT SHOULD A GOOD FINANCE SYSTEM LOOK LIKE? The key qualities: Single instance and web-enabled. Future-proof integration capability and open architecture. Able to handle multiple currencies, languages and companies. Smooth implementation. Choice of on-premise, on-demand or hybrid approach Finding the right solution Recognizing that you need to rethink your finance system is just the first step. Identifying the system that will best support your organization and its business is infinitely more challenging. Replacing your system - Should you choose best-of-class or ERP; on-premise or on-demand? For example, would your organization benefit more from a specialist finance package (best-of-class) or ERP a system that covers all aspects of the business? Should you use the latest on-premise technology or does a shift to the on-demand (software as a service / Cloud Computing ) model make sense for your business? First of all, you need to establish whether you re simply changing one outdated system or all of them, advises Roberts. For a company looking to update all its systems and preferring to deal with just one vendor, ERP is certainly an option. However, implementation can be lengthy, and there is the potential to be locked in, exposing the organization to rising maintenance or subscription costs. Most ERP systems also struggle to accommodate new or changed requirements without additional (expensive) development work (although UNIT4 s Agresso ERP solutions are a refreshing exception to this rule, as they are specifically designed for post-implementation agility ). Furthermore, if you ve got in-house systems supporting the processes that make your business unique, then scrapping them all for ERP would make a poor choice. Specialist finance packages can offer faster implementation, and are relatively simple to integrate with existing business systems. The vendor will also be more focused on helping you to meet accounting challenges and keeping up to date with changing fiscal and reporting rules. 3

4 These days there is also a wider range of platforms on which to run your applications. It s no-longer simply a case of selecting different operating systems, databases or hardware. Now you can choose between business models for delivery of the systems you need. If you have the resources in place and the risk profile that requires an onpremise system you can select and implement software in the traditional manner. However, for start-up businesses and those that are comfortable with outsourcing, treating software as a service allows the use of applications hosted by service providers who can offer various rental models that allow you to use and pay for software on demand. Indeed, some applications, such as Salesforce CRM (customer relationship management) from salesforce.com, have proved so popular that many businesses are now looking for ways to build their whole IT strategy around key on-demand applications. This in turn has encouraged established on-premise vendors like UNIT4 to offer on-demand applications - in fact, UNIT4 went a step further by founding a completely new, dedicated operation - FinancialForce.com - to take its cloud accounting applications forward. There is also demand for technologies to allow integration across approaches so that businesses may take advantage of, for instance, on-demand CRM applications AND on-premise finance applications. UNIT4 offers this option in addition to the pure on-demand route of its FinancialForce.com operation. Future-proof integration It is the open architecture and integration capability, however, which best-of class systems offer, that represents a winning combination for Roberts. An open architecture means that you have a choice of what platform to run your system on, and the opportunity to migrate. As a result, the system is future proof, he explains. IBM, Microsoft or Linux for example may be platforms of choice today, but that could change. Much the same applies to the on-demand approach. Having an advanced integration capability means that companies can plug-in other systems using standard supported tools. With many systems, integration means hacking into the database, or companies being forced to re-engineer or re-invent their systems every time software is changed. This is clearly not desirable. Integration is also a key consideration when considering software-as-a-service (SaaS) applications. Whether you adopt a purely on-demand approach or a hybrid on-premise and on-demand one, an important differentiator between vendors is the cost, quality and flexibility of the integration between your core systems. In the case of FinancialForce Accounting - the on-demand accounting application from FinancialForce.com - the company has worked in close partnership with SaaS market leaders, salesforce.com. The result is an application that does not simply link into the Salesforce CRM application but which is designed, built and delivered on the same shared platform-as-a-service to work as part of Salesforce CRM, with a single, shared database. This approach ensures immediate, seamless, joined-up working across the two applications, including shared customer account details, extended process support (for example: invoicing directly from details of closed deals, without rekeying customer and purchase details) and built-in reporting tools. Extending your finance system a more flexible approach to business requirements Cloud computing is also a very attractive option if replacing your existing system is out of the question but you still need better support for key finance processes or individual parts of the operation. Instead of the high up-front costs for hardware, software licensing, setup and maintenance, on-demand accounting applications (like those from FinancialForce.com) offer an affordable pay-as-you-go subscription model that is quick to implement, offers enterprise-quality tools and scales to suit any size of team. Once again, integration capabilities are crucial to success, as your on-demand accounting solution will not only need to work well with process-focused applications (such as Salesforce CRM) but also integrate seamlessly with your main finance system for group accounting and reporting. For example, FinancialForce applications are built upon the CODA Financials team s experience and 30-year track record of creating and delivering applications specifically designed for interoperability with customers other business systems. 4

5 Conclusions Organizations especially those facing fast growth or change need to recognize that keeping an outdated or restrictive finance system can be a false economy that will impede growth and reduce responsiveness. Not only could investing in newer systems prove less expensive than first thought, it could deliver direct cost savings plus numerous downstream benefits once users get better, more up-to-the-minute data and a solid understanding of the dynamics of the business and the market in which it operates. Globalization has led to the opening of new markets, customers and leaner outsourcing opportunities and in a competitive economy, all businesses, no matter how big or small, need to be able to take advantage of opportunities that arise before their competitors. Applying the most appropriate finance technology and tools will enable you to do that. And, thanks to the advances offered by on-demand applications, these benefits are not restricted to larger firms. Organizations of all types and sizes can now benefit from the most complete and powerful business solutions to support their day-to-day processes but delivered in a straightforward, flexible and more affordable way than ever before. More information FinancialForce.com offers a library of background information to provide broader perspectives on the benefits and drivers for on-demand accounting. These help put our new cloud accounting tools into a broader context of customer experiences, as well as covering the issues and trends in business and technology. To view/download the current pieces, please visit: 5

6 About FinancialForce.com FinancialForce.com is revolutionizing the future of accounting by doing for finance what salesforce. com has done for CRM. FinancialForce Accounting is a unique online cloud accounting solution the only one to be built natively on the Force.com platform from salesforce.com. It allows finance teams of organizations using Salesforce CRM the world s most successful online solution to truly Speak Salesforce in a way no other cloud accounting system can do, dramatically simplifying processes like invoicing, collecting cash and servicing customers. Having created the only financial management solution that Speaks Salesforce, FinancialForce.com does for finance what salesforce.com has done for CRM it gives organizations a complete understanding of their financial and business performance that is 100% up-to-the-minute and accurate. FinancialForce Accounting s unique real-time design is always in balance and up to date, delivering the confidence of reliable figures from secure systems, looked after by the world s most trusted enterprise cloud computing platform. It is aimed at organizations outgrowing their original accounting applications and looking for a simple yet powerful accounting solution with the capability to support them as they expand locally and even internationally. FinancialForce.com was funded with an investment from UNIT4 (parent company of the award-winning CODA Financials on-premise global accounting software) and salesforce.com. It combines the 30-year successful track record of designing and building CODA financial applications, with the salesforce.com platform s decade of dependability, availability and security. The result is a range of cloud computing applications, including FinancialForce Accounting a full Software as a Service (SaaS) accounting application delivered on a subscription basis; the first international SaaS accounting system developed on salesforce.com s cloud computing platform, Force.com. 6 Copyright FinancialForce.com, inc. All rights reserved. The information contained in this document is intended for general information only, as it is summary in nature and subject to change. FinancialForce.com and FinancialForce Accounting are trademarks of FinancialForce.com, inc. Any other brand names and/or trademarks referenced herein are either registered or unregistered trademarks of their respective proprietors. WP0038ff3