The finance technology landscape has evolved dramatically since the last ERP upgrade cycle. It’s moved away from a rigid strategy toward a postmodern ERP world where accounting and finance get value early.
But accounting organizations often don’t have time to take advantage of the latest technology or reimagine their processes. Even when an ERP upgrade is a top priority, they can be reluctant to make substantive changes in the new system. There’s usually concern about increased risk, little free time to test thoroughly, and worry that a vital step in their close process will be missed.
As a result, legacy structures, old approval workflows, and manual processes are ported over into the brand-new environment. That’s like putting your old car’s engine into your new car’s body.
Build your foundation
The ERP upgrade process is a journey, and preparation is required to ensure its success. Finance automation is the essential foundation that frees your people to be the subject matter experts and super users that are critical to a massive initiative like an ERP upgrade. A foundation of accounting excellence should be in place before you get too deep into an enterprise-wide upgrade.
When your people are tied up with manual close activities, they don’t have the time and energy to invest, and they often don’t make it to the table for the most important discussions.
Sure, you can bring in consultants or outside resources, but not only is that costly; they are missing the institutional knowledge you need. Beginning an upgrade initiative with an accounting automation solution in place ensures that the right people will be invested in this journey.
Design the desired future state
A critical part of every ERP upgrade should be modernizing your processes and redesigning them as “desired state” rather than replicating “current state.” When organizations implement an automation solution, moving toward impactful best practices is a natural part of the implementation process.
Defining the end goal is equally important.
Do you have a clear picture of what you’d like your accounting and finance landscape to look like when the ERP-upgrade is complete? This may seem like a tall task, but unless you define it, how will you know whether you’ve been successful?
Expedite testing cycles and mitigate data migration risk
Before you go live with your new system, you’ll go through multiple integrated testing cycles to ensure that processes are working as intended and financial postings are accurate. Once it’s time for cutover, you’ll have to migrate a large amount of historical data. Before that data goes into your new ERP, it should be tied out in detail.
Testing and validation require a lot of heavy lifting, especially when it’s done on spreadsheets. That leads to a lot of macros and pivot tables, and a lot of room for error in this critical risk-management activity.
But if you already have a finance automation solution in place, you can leverage the sandbox environment to mock up your post-go-live financial data structure. You can test and compare the new to the old, getting comfortable in a consistent environment before your new system is live.
The right technology platform eliminates the risk associated with validation—because you already know that the data in your new ERP system is complete and correct. As the system handles a lot of the validation for you, there are significant time savings as well.
Relieve your auditors
Process automation also reduces audit hours and revolutionizes the nature of discussions with auditors. Internal and external auditors will require some of the same validation, and when this is done on spreadsheets, it can result in more audit hours and work.
But when your auditors are already comfortable with your platform and can see how the data is getting from the old system to the new, they can focus on the audit historical balances and testing the controls around the cutover process.
And with the right solution, audit discussions can focus on the status of PBCs and other requests, instead of actual financial statement questions.
Read this white paper to dive deeper into the smarter way to upgrade, and learn how to free your accountants’ time by 50%.