Data and its Complexity in ERP Deployments

A large-scale implementation of any Enterprise Resource Planning (ERP) systems like SAP or Oracle is prone to risks due to the inherent complexity. Of late, there has been a surge amongst Finance and Accounting (F&A) shared services to deploy ERPs and realize process efficiencies. So what should you know about this? The process of deployment is complex and its success depends on numerous factors. In this article, the focus is on embedding the right set of data during the transition to ERP in the F&A shared services environment. A lot of existing data within the shared services currently resides on legacy systems or in-house applications. The migration of data is a cumbersome process and is fraught with many risks which later impact the return of investment (ROI) on the ERP. As a first step, the shared services needs to map the landscape of existing applications, clearly detailing their features, servers and the type of data residing in them. For example: If the invoices are being currently uploaded into an in-house tool these need to be clearly documented. There is tremendous merit in creating process maps/flowcharts, which explain the process of upload. These documents will be handy to the ERP experts later on, by enabling easy transfer of data and act as a reference guide. Another vital factor is the prevalence of desktop applications or macros in the shared services, which interface with large tracts of data sets stored in spreadsheets. A lot of processes in F&A depend on these macros to process financial transactions real-time. In this context, many finance processes lack the right level of documentation pertaining to the creation and deployment of these macros. This increases the risk, as there could be a potential loss of data while migrating to the ERP. Furthermore, it does not provide clarity to ERP experts as to which macros could be decommissioned or are suitable to interface with the ERP. As a result, a lot of time is invested to secure these details and conduct multiple pilots – thereby extending the timeline for deployment. Plus, the lack of detailing is a potential high risk going forward as the intrusion of any unwanted macro could impair the data sets or warehouse in the ERP. The right level of data to be migrated in the ERP is of paramount importance. The F&A shared service centers should prioritize cleaning up the pending backlogs in terms of unpaid invoices or posting of receivables in their existing systems. A clean transfer of data to the ERP is a qualitative input in the books of accounts post migration to the ERP. To enable this, shared services centers should educate their employees and vendors to clear ageing items within the specified timelines. A recent example pertains to a project executed in my current organization to clear the posting of accounts receivables in a legacy system at a global level, and thereby secure right data in the forthcoming deployment of SAP. The shared services was able to leverage the services of process excellence or transformation teams to conduct periodic checks to secure the accuracy of the data. The same discipline could be extended to the onshore finance teams to avoid complexity in the future state. To prevent any leakages, the F&A shared service centers should create a data governance framework with the right level of process and security controls. These controls should govern the data sets largely categorized as process, employee and vendor, and thereby store the appropriate data in the ERP. The process of data validation in the legacy system, as per defined business rules, is mandatory. For example, if the payment terms stand at 60 days then the same target should be embedded in the ERP. The creation of a team of specialized resources having functional knowledge on legacy and ERP systems further lessens data complexity. In the context of staggered ERP transition, where both legacy and ERP systems co-exist, this knowledge base will wipe any disruptions in terms of data feeds. Summary The implementation of a new ERP system is a time- and cost-intensive process, so, understanding of the value of feeding the right level of data will avoid potential delays to deployment, and save money. For the ERP system to be easily accepted by the end users and vendors, data complexity must be evaluated and addressed during the migration. Clean data will further provide additional benefits by harmonizing the finance processes and deliver customer delight. [inlinead]

Data and its Complexity in ERP Deployments

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