The world is becoming a single market where organizations make it their daily priority to be globally competitive. Our volatile economic climate requires that companies are able to address customer demands at the earliest possible opportunity (or at least before their competitor does). This means there is a demand for an elaborate and close coordination between company, customers, vendors, suppliers or contractors.
ERP system is that piece of technology that all organizations feel the need to have in order to become or stay globally competitive. Many companies hope to use ERP system as a vehicle in order to improve their coordination and strategic decision making.
ERP systems´ biggest advantage is that it consolidates site-wide information and makes customer information available to everyone in the entire organization. This means it can improve the ability of the business to personalize their products and services based on the information on hand. It can also enhance their real time planning, equip their front liners with necessary information to improve customer satisfaction, improve collaboration among the branches, and address the legal and tax needs of the company.
However, ERP systems no matter how revolutionary have limitations. Quite many of them actually. Below are the top 7 reasons why financial software systems or financial software solutions serve as the perfect complement to ERP system usage.
- ERP system is solely focused on Manufacturing and Materials Planning
ERP systems is an evolutionary product of MRP focused on manufacturing and materials planning. Therefore, it was built with the idea of integrating all business management functions including planning, inventory, materials management, engineering, accounting and finance, order processing, manufacturing, and HR.
If you may notice, accounting and finance is but a portion of it. ERP systems were not meant primarily to be an end to end accounting and finance tool. ERP systems did not take into consideration external relationships of the organization which it had when it ran independent entities. ERP systems cannot handle interactions or transactions with suppliers and customers.
- ERP system cannot recognize trends and patterns needed for decision-making
Even after a successful ERP implementation, many managers are met with the problem of not being able to find trends or patterns. They can only check current status of say – purchase orders which do not really help in more strategic decision making.
- ERP system could not meet all of the analytical and reporting needs of the organization
While the compiled data in ERP systems can be designed to match a company´s personalized requirements, utilizing the reporting capability of the ERP system is not enough.
Having an add-on performance reporting software includes activities of decision support systems, query and reporting, online analytical processing (OLAP), statistical analysis, forecasting, and data mining. Using ERP system as the foundation with an add-on financial software system can help organizations predict the future by identifying trends, preferences, market variations. It even improves the speed of reports generation as well as improve the lines of communication between the finance department personnel and the lines with the other departments of the organization.
- ERP system´s implementation disrupts business
ERP implementation not only demands huge monetary investment on the side of the business, it is also expected that implementation of an ERP system takes a very long time. We are talking years before completion. This means business can be disrupted momentarily in order to give way to a more consistent way or working.
With an add-on financial reporting software like Performance Canvas Financials for example, implementation of this reporting, budgeting, forecasting, and consolidation solution takes anytime between 4 days to 3 weeks. This means it is a significantly faster way to make sure that the reporting and budgeting of the finance department is not disrupted while waiting for the completion of the ERP system implementation. Once the ERP system is in place, all that is left to do is to integrate the add-on budgeting and reporting solution with the now running ERP system for a more in-depth and real time reporting and analysis.
- ERP systems can run on compatibility problems with other systems
The reality is that majority of the companies or departments within companies still run on legacy systems. ERP systems therefore run into compatibility issues in various departments. Conversion of all these old systems can result into another significant investment from the company and another set of time and resources needed to be allocated.
Having a financial solution that is flexible and powerful enough to connect to legacy systems is the key. If integration is not an option, having a financial solution that allows manual importing of figures via Excel into the system from the legacy system serves as a good alternative.
- ERP system can pose security issues
While ERP system´s strength is making information available in the entire organization, it also poses a significant security and confidentiality risk. Especially when it comes to accounting and finance, there are figures that are meant exclusively for certain people.
A separate financial budgeting and reporting solution introduces extra layers of security by making sure certain people only see information that are relevant to their line of work. It also offers security both on the sheet level and the server level which consequently minimizes errors.
- ERP system uses industry standards
ERP systems are built based on industry standards so when a certain organization wants to implement the system, it will require changing their way of working to meet the standards. While this can be beneficial, this may also be catastrophic in that businesses may lose their competitive advantage.
The good thing with having a supplemental solution to your ERP system is that solutions like Performance Canvas not only prevents over-engineering, it also ensures that you can model your business into the solution to make it more relevant to the finance department.
Real time reporting, identification of trends and patterns, accuracy of figures, transparency of the accounting process, and added layers of security are few of the many advantages of having an add-on solution to ERP systems.
If you currently have an ERP system (MS NAV, AX, SAP, Hyperion, Epicor ERP, iScala, Epicor Enterprise, etc.) and you are looking for the best financial analysis software or you are looking for a unified platform to improve the way you do financial reporting, analysis, budgeting, planning, and consolidation, visit www.performancecanvas.com or email email@example.com for a free online demo of Performance Canvas Financials.
DSPanel offers cutting edge technology platform for business analytics, planning, and visualization. DSPanel designs, builds, and operates with the end users in mind. Performance Canvas was created by DSPanel to answer the unarticulated needs of the market not addressed by previous available solutions. With Performance Canvas, information is transformed into valuable business insights for the business executives to utilize in their decision-making process. DSPanel currently has over 2500 organizations deploying their solutions.