When data lives in many different systems, finance has to rely on spreadsheets and manual processes to fill information gaps. People end up spending more time searching for the right spreadsheet with the correct data (or even building their own, tapping into their own particular data sources) than actually analyzing and making decisions. This tendency (in turn) leads to bad decisions, maybe even catastrophic decisions.
Bad decisions are made in companies every day – from enterprise to small-to-medium businesses (SMBs) to start-ups. However, as departments, executives, and outside stakeholders begin to lose trust in the data, no one is sure if any decision is the right decision, or (even worse) they may put off deciding at all.
When multiple manual steps are used to supplement a flawed process (supported by a less-than-optimal infrastructure), employees have to rekey payment information, manually calculate discount percentages, reconcile customer information, or log into multiple systems to see purchase or payment histories. These manual steps inevitably chip away at trust, in terms of slow-downs, reporting errors, and bad decisions.
Trust is a very fragile thing. With spreadsheets, errors run rampant. Company size does not matter; industry does not matter. For example, during the 2012 Olympics, a single keystroke error caused tickets for 10,000 imaginary seats to be sold.
Keystroke errors, broken links, incorrect formulas cause delays, reporting errors, and bad decisions that are based on that incomplete and inaccurate data. And let’s face it, trust is destroyed if reports are filled with mistakes, potentially setting employees up for embarrassment (or worse) if they provide incorrect information to their management.
And this affects the entire company. Growth depends on companies being able to keep investors, regulators, and executives informed―with better transparency. Transparency turns data into a competitive advantage.
Chief finance officers (CFOs) and chief information officers (CIOs) have to work together to improve decision-making. CFOs and their finance teams can no longer wait until the end of the month (when IT runs a report) to get the data they need. The competition will already be too far in the lead. Getting access to consolidated views and up-to-the-minute reporting cannot happen if data is scattered across a variety of point solutions or spreadsheets, or if everything is held in multiple general ledgers (GL). And that can mean the difference between growth and shutting the doors for good.
The direct costs of inconsistent data include the support of multiple data sources as well as the systems used to manage them. Indirect costs are higher. They include all the labor required to connect these systems (and keep them connected). Any many of the costs are not quantifiable. Significant but hard to quantify.
Firms that invest in trusted data achieve a corresponding return, and those returns can be extensive. Trust brings peace of mind, and it helps reduce costs and improve efficiency. Trusted data streamlines any/all troubleshooting. A reliable data foundation speeds time-to-market for new products and time-to-entry for new geographies. Trusted data allows the executive team to make better, faster decisions about investments, risk, infrastructure, and resource allocation—all to pursue and realize new opportunities faster. They change from market laggards to market leaders. They become innovators instead of followers, and they get new products to the right markets quicker and cost-effectively.
Unlike fragmented spreadsheets, ERP cloud solutions provide that central source of truth—no manual aggregation and no waiting around for IT to deliver a report that is out-of-date on the day it is produced. But the journey for many companies is not complete. A recent survey reveals that only 35 percent of CFOs are confident that they have access to the financial and operational data that they need to make critical business decisions promptly. Over three-fourths (77 percent) admit that they have had to delay decisions due to lack of information.
This is where ERP Cloud can come to the rescue. With better reporting, complete integration, self-service features, and collaborative planning solutions, the right ERP cloud can provide the on-demand data access and the single system of record that CFOs want.
In addition, only 45 percent see their groups serving in strategic, thought-leadership role based on data analytics. In fact, 51 percent spend the majority of their time on transactional (vs. analytical processes). They seem to be working more on putting together the data vs. analyzing and acting on the data. Does this mean that some CFOs who started the process of migrating to the cloud have quit the process? Or do some finance professionals still hold lingering concerns about the cloud regarding security and data loss? Or do they view the migration to the cloud as cost-prohibitive?
But the news is not all bad. While some CFOs still struggle with the reality of putting financial and operational data in the cloud, the vast majority (73 percent) now say they trust the cloud for storing their sensitive financial and operational data. This reflects an understanding of the fundamental shift needed for SMBs (and their larger and smaller counterparts) to gain both timely access to, and trust in, their data.