ERP and other IT based Solutions for finance function


Why Enterprise Resource Planning also called ERP is required?

To answer this, let’s examine this typical business scenario
·         Sales Team approaches the Inventory department to check for availability of the product.
·         In case the product is out of stock ,the sales team approaches the Production Planning Department to manufacture the product.The Production planning Team checks with inventory department for availability of raw material
·         If raw material is not available with inventory , the Production Planning team buys the raw material from the Vendors then Production Planning forwards the raw materials to the Shop Floor Execution for actual production.
·         Once ready , the Shop Floor Team forwards the goods to the Sales Team , who in turn deliver it to the client. The Sales Team updates the Finance with revenue generated by sale of product
·         Production planning Team update the finance with payments to be made to different vendors for raw materials.All departments approach the HR for any Human Resource related issue.
·         That is a typical business process of in a manufacturing company
·         Some Key Inferences one could derive from the scenario would be.
·         A typical Enterprise has many Departments or Business Units.
·         These Departments or  Business Units continuously communicate and exchange data with each other.
·         The success of any organization lies in effective communication, and data exchange, within these departments ,as well as associated Third Party such as Vendors, Outsourcers ,and Customers.
·         Based on the manner in which communication and data exchanged is managed



Lets look at Decentralized system  without ERP. In a company with Decentralized System of Data Management  - Data is maintained locally at the  individual departments; Departments do not have access to information or data of other Departments
·         To identify problems arising due to decentralized Enterprise management system lets look at the same business process again.
·         The Customer approaches the sales team for a product, but this time around he needs the product, on an urgent basis
·         The Sales Team do not have real-time information access to the products inventory.
·         So they approach the Inventory department to check the availability of the product.
·         This process takes time and customer chooses another vendor
·         Loss of Revenue and Customer Dissatisfaction.
·         Now , suppose the product is out of stock and the  Sales Team approaches the Production Planning team to manufacture the product for future use.
·         Production Planning Team checks the availability of the raw materials required.
·         Raw Material Information is separately stored by Production Planning as well as Inventory Department.
·         Thus Data  Maintenance Cost (in this case Raw Material) goes up.
·         A particular raw material required to manufacture the product is available in the inventory ,but as per the database of the production planning team, the raw material is out of stock.
·         So , they go ahead and buy the raw material. Thus, material as well inventory cost goes up.
·         Once the  raw material is available ,the shop floor department suddenly realize they are short of workers
·         They approach the HR , who in turn hire  temporary employees at higher than market rates. Thus LABOR Cost Increases.
·         The production planning department fails to update the finance department on the materials they have purchased.
·         The finance department defaults the payment deadline set by the vendor causing the company loss of its repute and even inviting a possible legal action.
·         This is just a few of many a problems with decentralized systems.



What is the best ERP ?
There are a number of ERP systems on the market today, so how do you know which one is right for you?
The ERP system market today is dominated by three platforms: Oracle E-Business Suite, Microsoft Dynamics, and SAP.

Oracle E-Business Suite

Oracle E-Business Suite has the ability to integrate several different modules seamlessly into one system for ease of use. Oracle E-Business Suite also allows you to automate many of the processes so that manual data entry is no longer required. This not only increases efficiency, but eliminates errors and ensures data is not lost.
One of the primary disadvantages for the Oracle E-Business Suite is that it can be less user-friendly than some other platforms—particularly for small businesses.
Microsoft Dynamics
Microsoft Dynamics, as the name implies, is built on Microsoft infrastructure and syncs seamlessly with other Windows business applications—allowing for an easy transfer of information across all systems.
Microsoft Dynamics syncs with other Windows applications, making the sharing and transfer of information simple. It provides exceptional collaboration features, allowing different parts of the company to share information effortlessly. Since it is built on Windows infrastructure, implementing Microsoft Dynamics takes considerably less time than other systems. It has the shortest implementation time of the top three systems.

SAP
SAP holds the largest market share in the ERP solutions industry. In 2012, SAP actually controlled approximately 25 percent of the market. Oracle followed with 13 percent and Microsoft Dynamics with 5 percent.
Although SAP is a very large company, they do not exclusively work with major commercial enterprises. They actually have a product that is very small business friendly, with thousands of customers that employ less than 1,000 people.
Their software is very intuitive and provides a number of business intelligence features including dashboards, report writing, and data storage.
SAP Disadvantages
For those that are unfamiliar with SAP, it can take a while to pick up compared to Oracle and Microsoft Dynamics, but once the basics are learned, it is an easy system to use.
Although prices can vary depending on the features you need, SAP tends to be more expensive than its competitors—which may make it a less than ideal solution for small to medium sized businesses with limited IT budgets.
OPEN ERP

Odoo, previously known as OpenERP, is an open-source Business Application Suite software actively programmed, supported, and organized by OpenERP s.a. Odoo is similar to many open source projects where customized programming, support, and other services are provided by an active global community and partner network. The community is comprised of more than 1,500 active members and has contributed more than 3000 modules to the ongoing enrichment of Odoo. The network of certified partners, established in more than 100 countries, deploys the solution locally. The software, with more than 1,500 downloads a day, is one of the most frequently installed business suites worldwide. 

All Odoo Apps such as Odoo CRM, Odoo Sales, Odoo Accounting, Odoo WMS (Warehouse Management), Odoo HR, Odoo Project Mgmt, Odoo Events, Odoo Marketing, etc. are integrated to each other. 

Odoo is an open source alternative to many softwares. It can be used in any retailer with its POS (Point Of Sales), and in any website with its CMS ( website builder) synschronized with the e-Commerce App. In the enterprise resource planning software field; Odoo is an alternative to SAP ERP, Oracle E-Business Suite, Microsoft Dynamics, Netsuite, Adempiere, Compiere, OFBiz, Openbravo, and others. 

Odoo has offices in Belgium, US, Luxembourg, India and Hong Kong.




Implementing the right ERP solution



Today, there are many ERP options available in the market. Selecting or making the right choice of ERP Solution for your business is one of the crucial business decisions. While many companies feel that any software or ERP will work and their organizations will simply adapt to the functionality of the software. The right ERP can propel your company forward while the wrong decision may potentially be catastrophic. This article will delineate key steps in the ERP selection process.  Thus, the decision shouldn’t be taken lightly or made with incomplete information. 
1. Selection of Committee:
This is first and most important step of Selecting the Right ERP System. Members of this committee should be decision makers in the organization representing all relevant departments.
· While electing the committee leader, most of the companies makes mistake that they select IT professionals only.  ERP solution is the Business decision and not an IT decision.  IT plays only support role in this process. Committee Leader must have a deep knowledge and understanding of your business and the Industry, and should have the authority to bring about change.
· Members of the committee need to understand the importance of the ERP selection process and make the required time commitment towards this.
· Final decision maker, who is going to sign the contract, should be part of committee. Selecting an ERP is a big decision for any company, it’s important to have the final decision maker involved as much as possible in extensive meeting discussions.
2. Conduct a Process Review and Analysed your Business Needs:
While selecting right ERP solution “Business Needs” is playing very important role and not what “You Want”. Wants are only important at the very end of the process if you have uncovered several potential products that meet your Business Needs.
Firstly define and document your current business process also highlight the pain/strength point. Also include the processes should look like in the future (”to-be” state) and the corresponding business requirements. These processes and requirements should eventually help while software demonstration.
Many company neglects to involve end-users’ requirement and eventually lead to the failure of the project. End-user must be involved in the project at the beginning of the project until the end.
3.  Evaluate the Technical Fit.
It is very important to understand how a potential ERP solution will align with your current infrastructure. Also, consider the availability of support technical resources in the organisation.
4. Local or Cloud
One more important consideration is whether to install locally or go with a cloud-based system. Both have its own advantages, a local installation will generally have a higher upfront const, but lower ongoing maintenance fees.  On the other hand, a cloud-based install, has much lower upfront costs, but higher maintenance fees. It is important to select the right option as per the business requirement.
5. Customization
Many companies are in niche industries not easily served by off-the-shelf software. You need an ERP system that is designed from the ground up to allow in-house customization and configuration to serve you a better result. Some ERP systems, such as Dynamics NAV, are specifically designed to allow easy extensibility and customization.
6. Integration
If your business relies on specific software, such as Microsoft Office/Outlook or any other software, picking an ERP system that integrates with your existing software can save you both time and money.
7.  Reporting
You need to be evaluating the reporting needs depending on business processes to decide the potential ERP solution.
Below are the important factors to consider when choosing the right system.
-   Which trends are going to monitor over next five years?
-   What kind of information, do you need to retrieve?
-   What type of analytics do you need to access?
 8.      User Training

ERP systems involve big change for people, and the system will not do you anything good if people do not understand how to use it effectively. Therefore, spending time on money on training, change business processes (if required), etc. is crucial to any ERP project. Without adequate training to end user, it is very risky to rollout the new ERP system.



ERP industry giants SAP and Oracle have both recently rolled out their latest business solution platform implementations in HANA and R12, respectively. These technologies were both built to serve the higher purpose of increasing the productivity and profitability for clients using them. As with any new technology, the long-term viability of these platforms will be judged on their ability to boost an enterprises’ bottom line.

Multiple factors get thrown into the equation when determining the value of implementing any new technology. First and foremost, is the ROI (return on investment) worth the change? Undoubtedly there are costs involved with the initial implementation and ongoing maintenance once the new technology is up and running, but at the end of the day, streamlining HR, Finance, and other back-end processes is needed to maximize efficiency and increase company profits.

So let’s take a look at the early returns from both HANA and R12.

The new rollout from SAP, HANA, is essentially a brand new design from previous platforms offered by the company. From the outset SAP has been touting HANA as the platform of speed. The in-memory platform gives users exactly what they want, the potential of real-time analytics while not having the requirement for redundancy of data because of its unique architectural setup (HANA was built to run as a single operating database instead of multiple databases).

Along with increased speed, HANA offers users a bevy of other valuable features. These include, but are not limited to; increased functionality, less coding, and overall lower cost of ownership for the platform. For more tech-specific information on SAP HANA, visit their website here.

How has HANA been accepted by the tech and business community? According to SAP documentation, HANA has approximately 2,000 customers globally. Another advantage of this system is that applications from the HANA platform are adaptable, meaning certain elements can run on other platforms. That being said, their goal is turning as many of those current users and customers into fully vested users of the entire SAP Business Suite.

If speed is the name of the game, Oracle won’t yield market share quietly to SAP HANA. Not to be outdone, Oracle has recently announced their own “in-memory” option that will run analytical and transactional applications faster and will be available through their 12c database (TimesTen software has previously had in-memory capabilities as well).

R12 also offers Oracle users a long list of upgraded features and capabilities over previous releases (11i). Benefits of using this upgrade have been shown to increase platform stability, security, and overall performance of the entire EBS. All of that is one thing to tout, but Oracle also stresses the upgrade because R12 runs on the same stack as Fusion Applications (Fusion Middleware). According to Oracle, the Fusion Middleware platform is designed for the enterprise and the cloud and enables the ability to create and run agile, intelligent business applications while maximizing IT efficiency through full utilization of modern hardware and software architectures.

So which is better and are the new releases worth the upgrade? That’s a question of preference as the two platforms are considerably different in terms of architecture, software, hardware, and overall cost. To answer the “are they worth it?” question... any new technology will hold significant improvements over previous models aimed at simplifying and streamlining the way business is run in today’s environment.




FINANCE FUNCTION FAILING TO FULLY EXPLOIT TECHNOLOGY

Chief Financial Officers (CFOs) and the finance organisations they lead have yet to fully exploit emerging technologies to better support the business, says a new report from ACCA (the Association of Chartered Certified Accountants). 

The report, Is finance function technology delivering on its promise?, which gauged in-depth views from finance executives across a spectrum of businesses, including Shell, Aviva, Kimberly-Clark, Deloitte, Accenture and others, suggests the finance organisation is not using technology to its full potential and, in turn, could be missing out on bringing more value to the enterprise. 

Jamie Lyon, Head of Corporate Sector at ACCA, said: 'The problem is not necessarily that technology isn’t available, but there are many reasons why finance has not yet reached tech nirvana. The reality is for most finance functions the technology landscape is still complex and fragmented with multiple ERP, continuing work-arounds and bolt on applications. But this report suggests there are bigger issues too. It is about behaviours, vision and culture in the finance function to go that step further and really push for technological change.'

He adds: 'Of course it isn’t true to say that finance technology has been standing still for the past 10 years. Leading companies have deployed technology to improve finance service delivery to the business, but the primary focus has really been around cost, efficiency and quality in transactional finance, and driving standardisation and improving controls. 

'However, concepts such as self-service finance, or eliminating the need for people in transactional finance processes through greater technology deployment, continue to prove elusive. We’d also question whether there is a greater opportunity for business process outsourcers to bring more finance technology innovation to bear.'

The report suggests the real opportunity CFOs have is to champion the adoption of transformative technology and predictive capability tools to support decision making. However, for all the aspirations that finance may have around the value and insight agenda, this remains a work in progress for most. 

Deborah Kops, principal at Sourcing Change and co-author of the report, said: 'Finance can, through technology, eliminate its preoccupation with processes. Harnessing technologies that mine data for patterns means the function can become a game changer for business. Finance leaders have tended to rely on their technology colleagues rather than members of their own teams to plan their technology ‘roadmaps’. 

'The Chief Information Officer’s team is either consumed with implementing the latest version of ERP, or with identifying and installing the newest customer-facing social and mobile technology that isn’t really touching finance. This means the technology needs for finance get little attention when it could transform the function for the better. 

'We should also acknowledge that the application of technology has the potential to change further what a finance career means. If technology increasingly automates transactional finance and is also able to mine insights at the same time, it will change what it means to be a finance professional as well as the capabilities needed.'
Source : accaglobal.com

BIG DATA

Dealing with the data : 

First we felt great to capture data , then found tools to manipulate data. Latest focus is on data visualisation softwares

Challenges faced by today’s businesses is around identifying the information that is valuable and turning it into ways that any stakeholder, whether business user or data analyst, can use it to maximize productivity.

 The various data related terms are as below:

Data analysis

Data analysis is the process of studying and summarizing data with the intent to extract useful information and develop conclusions. Data analysis is closely related to data mining, but data mining tends to focus on larger data sets with less emphasis on making inference, and often uses data that was originally collected for a different purpose. In statistical applications, some people divide data analysis into descriptive statistics, exploratory data analysis, and inferential statistics (or confirmatory data analysis), where the EDA focuses on discovering new features in the data, and CDA on confirming or falsifying existing hypotheses.

Data governance

Data governance encompasses the people, processes and technology required to create a consistent, enterprise view of an organisation's data in order to:

·         Decrease the risk of regulatory fines

·         Designate accountability for information quality

·         Improve data security

·         Increase consistency & confidence in decision making

·         Maximize the income generation potential of data

Data management

Data management comprises all the academic disciplines related to managing data as a valuable resource. The official definition provided by DAMA is that "Data Resource Management is the development and execution of architectures, policies, practices, and procedures that properly manage the full data lifecycle needs of an enterprise." This definition is fairly broad and encompasses a number of professions that may not have direct technical contact with lower-level aspects of data management, such as relational database management.

Data mining

Data mining is the process of sorting through large amounts of data and picking out relevant information. It is usually used by business intelligence organizations, and financial analysts, but is increasingly being used in the sciences to extract information from the enormous data sets generated by modern experimental and observational methods.

It has been described as "the nontrivial extraction of implicit, previously unknown, and potentially useful information from data" and "the science of extracting useful information from large data sets or databases." In relation to enterprise resource planning, according to Monk (2006), data mining is "the statistical and logical analysis of large sets of transaction data, looking for patterns that can aid decision making".

Data transforms

Data transforms is the process of Automation and Transformation, of both real-time and offline data from one format to another. There are standards and protocols that provide the specifications and rules, and it usually occurs in the process pipeline of aggregation or consolidation or interoperability. The primary use cases are in integration systems organizations, and compliance personnels.





What is Big Data?
The basic idea behind the phrase 'Big Data' is that everything we do is increasingly leaving a digital trace (or data), which we (and others) can use and analyse. Big Data therefore refers to that data being collected and our ability to make use of it.
The big thing about Big Data is in the kind of data we can analyze. It used to be that data fit neatly into tables and spreadsheets, things like sales figures and wholesale prices and the number of customers that came through the door.Now data analysts can also look at “unstructured” data like photos, tweets, emails, voice recordings and sensor data to find patterns.
How is it used?
Most people have some idea that companies are using big data to better understand and target customers. Using big data, retailers can predict what products will sell, telecom companies can predict if and when a customer might switch carriers, and car insurance companies understand how well their customers actually drive.
It’s also used to optimize business processes. Retailers are able to optimize their stock levels based on what’s trending on social media, what people are searching for on the web, or even weather forecasts. Supply chains can be optimized so that delivery drivers use less gas and reach customers faster.


But big data goes way beyond shopping and consumerism. Big data analytics enable us to find new cures and better understand and predict the spread of diseases. Police forces use big data tools to catch criminals and even predict criminal activity and credit card companies use big data analytics it to detect fraudulent transactions. A number of cities are even using big data analytics with the aim of turning themselves into Smart Cities, where a bus would know to wait for a delayed train and where traffic signals predict traffic volumes and operate to minimize jams.

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