Schedule A Demo

How to Achieve Real-Time Planning and Reporting From Your ERP (…AND Other Data Sources Like It)

ERP | 23 March 2018

Companies can spend millions of dollars going from one ERP to another, only to find out that it doesn’t satisfy their needs. While all ERPs fulfill the same essential function - to track and measure transactions - they lack the planning and reporting capabilities a finance team needs to thrive. In this article, we’ll be going over the challenges faced by companies trying to extract data from their ERPs, the pain points of using Excel to analyze this data and solutions for overcoming these barriers.

ERP in a Nutshell

The history of the modern ERP system can be traced back to its origins as Material Requirements Planning (MRP) software in the 1960s. MRPs were used to control inventory and production for the manufacturing sector, largely to make sure that all raw materials and manufactured units were accounted for. With the advancement of technology and the switch from manual to electronic processes in business, the MRP gradually evolved into the modern ERP.

Here are the top three capabilities of a modern ERP:

  • Directly tracks and stores financial data
  • Offers modular access for employees at all levels
  • Allows financial data to be exported in bulk for analysis

Some examples of today’s top ERP systems include Oracle, SAP, Netsuite, FinancialForce, Vertafore, Sage Intacct, Microsoft Dynamics, Workday, JD Edwards, PeopleSoft and many more.

Aside from processing transactions that support business operations, ERPs were not designed to perform budgeting, reporting and forecasting. Some ERP vendors added limited planning capabilities into their platform, but with a massive influx of data and no easy, flexible way to work with it, many companies turned to a tool already well-known - Microsoft Excel.

Examining Microsoft Excel

The Role of Excel in Finance

For most financial analysts, a large part of their day to day tasks involve pouring over hundreds of Excel worksheets. Finding the right cell, tracing formulas, managing linked sheets and books, manipulating pivot tables - these are part of the daily challenges faced by any financial analyst.

Despite its power and flexibility, there are many reasons why Excel isn’t exactly the perfect FP&A tool. While there’s definitely more, we decided to center in on three key pain points FP&A teams experience while using Excel, below.

Three Key Challenges When Working in Excel

  • Consolidation - the process of aggregating financial data for budgeting, planning and forecasting and manually making sure it is accurate can be exhaustive and time-consuming.
  • Collaboration - being able to share, edit and update key files together is extremely tedious and leads to “duelling spreadsheets”.
  • Security - the ability to control access to sensitive financial information is insufficient or absent.

Consolidation

In most organizations, different groups of users (departments, functional areas, etc.) will have their own spreadsheets. These sheets need to be gathered and aggregated to create a consolidated report for expense and revenue item. Excel doesn’t have a built-in process to consolidate this data in real-time. This means that a single number can take anywhere from one to several days to consolidate, especially if they involve several departments, each with their own timelines.

Example: Sales information and forecasting future performance needs to be green-lit by direct sales and e-commerce team leads, managers and directors - all of whom need to be contacted via email or phone. Since all parties have different schedules, this can prove to be a very difficult task in itself, aside from actually analyzing and reporting on the information they provide.

Collaboration

Involving more than one user in an Excel sheet can quickly turn into a chaotic case of “duelling spreadsheets”. Coined by Robert Kugel from Ventana Research (Source), this phrase refers to the phenomena that occurs when one Excel is sent out to several people. When the Excel sheet is returned to the original owner, some numbers have remained the same while others have been changed, without clear explanation. Since you can’t simultaneously track users for all the different versions, it takes a very long time to examine the spreadsheets and understand which numbers have changed and why.

Example: Take the following scenario involving John, the CFO, Marie the Controller and Mark, the Assistant Controller. Mark sends Marie an Excel report and Marie approves it, forwarding it to John. Soon after, Marie questions what Mark sent to John because it didn’t have the changes she sent back to him initially. After going back and forth several times, it turns out that Mark and Marie have different versions of the Excel workbook, and because the changes she made were not tracked, Mark didn’t know what she had done.

Security

Keeping Excel files used for reporting, budgeting and forecasting secure is a huge source of stress for Finance professionals. Since there isn’t an in-built system to make sure that files cannot get into the wrong hands, security is entirely reliant on the ability of the team to make sure that no file, among hundreds or even thousands of folders, is misplaced or accidentally shared. The strain of having to handle the security of the Excel files means that team members can never fully focus on analyzing the data.

Example: While consolidating the departmental expense reports for review, Vincent (the HR manager) needed to send a spreadsheet to the executive team. This sheet contained detailed, highly confidential information such as salaries, social security numbers and other private employee information. Accidentally, Vincent CC’d the entire company directory when sending the attachment, compromising very sensitive information.

At this point, we can agree that Excel is not the ideal FP&A tool to bring your team forward - but what is? Our next section covers how to compile the definitive wish list for a tool and how to find it.

Create a FP&A Tool Wish List and Find a Software that Delivers Them

Making Your FP&A Wish List

It’s much easier to point out what’s wrong with Excel than to phrase exactly what you’d like in a new tool. Part of the reason is because there are so many ways of describing the same features - is it visual reports or reporting templates? User-friendly dashboard or a self-serve platform? Coming up with a good wish list may seem at times like pulling teeth. But it doesn’t have to be a solitary task - call a team meeting and decide together what core functionalities would benefit your team the most.

Here are six potential wish list items to kick start the conversation:

  • Unified platform: a single front-end platform for all your reporting, budgeting and forecasting. No need for multiple sign-ins, modules, or complex processes.
  • Excel look and feel: the platform should allow you and your team to continue using the same formulas and methods you used in Excel, but without the downside.
  • Automated data consolidation: there should be absolutely no need to consolidate data manually - your financial data should be compiled and consolidated in real-time by the platform.
  • Clear audit trail: any time a user makes a change, it is clearly tracked and time-stamped. No changes can be hidden or swept under the rug.
  • Tiered access for users: each user’s access can be customized to the reports that they should have access to. User access can also be changed as needed.
  • Seamless integration into your ERP: connecting this platform to your current ERP should be easy and quick. You won’t need to depend on IT to access up to date information.

Once you have a sense of which features would improve your FP&A workflow, it’s time to find a product that overcomes your pain points and provides additional benefits. Once again, don’t worry about the exact phrasing - a vendor who’s right for you will be able to understand your wish list and better yet, show you how their software can deliver exactly what you’re looking for.

Finding a Tool and Team that Meets Your Wish List, Without Compromise

When it comes to finding a company who can work with you to lead the conversation and give you a tool that can eliminate you and your team’s FP&A pain points, Limelight is unparalleled. Take the hassle out of working in Excel and let us show you how you can achieve real-time reporting out of your ERP - fill out this form to book a demo with us today.

""

Other Posts You Might Like

ERP
Why Are Businesses Moving Away from Excel? Manually exporting data from your ERP into spreadsheets...
ERP
When accurate data is accessible to all stakeholders in real time - something that is extremely...
ERP
https://www.ibm.com/us-en/marketplace/limelight-financial-performance-appAs a long-time IBM...
subscribe-background
Enter your email to receive timely financial
articles and tips, delivered straight to your inbox