6 KEY CONSIDERATIONS WHEN CHOOSING FINANCIAL CONSOLIDATION SOFTWARE

PARTNERING YOUR BUSINESS WITH THE RIGHT SOLUTION & PROVIDER

There is a point at which companies with multiple cost centres or business units realize the benefit of adopting a financial consolidation solution.

Time is ripe to manage the collation, consolidation and reporting of management accounts, budgets or forecasts with these software solutions. It can be difficult to choose the most suitable solution from the many options available. Who do you partner with? What should the software solution cost?

In our experience, the best way to start an enhanced reporting process is to know what you want. Define the exact reporting output and project scope. When an organisation is not in a position to define its exact requirement, the solution provider should, along with the client, determine the scope of the project.

To help you choose the right solution and solution provider, we have outlined 6 tips for choosing a financial consolidation solution:

1) Local vs. International
When it comes to technology and software we are often inclined to look internationally.  The success of brands like Google, IBM, Oracle or SAP seems to validate this assertion.

But this does not mean that the best technology is only developed internationally.

In fact, many components on which many of the worlds leading software is based, were developed outside these regions from all over the world, including South Africa.

		Tip: Search for local service providers and technology companies that are well established and who maintain an impressive client list. Client satisfaction is the true tes
		Benefits: There are some obvious benefits such as purchasing a product in rands and dealing with a supplier that understands the South African market. The real value comes from a development and support perspective. Should you require specific functionality to be developed or even if you need a particular problem to be resolved, chances are you won’t need to go into an international queuing system.

2) Choose the right team
The software you choose is not the only variable that determines the success of your consolidation software implementation.
Question the credentials and ability of the team members involved in the implementation. Question their financial aptitude and their ability to properly understand your financial rules.  Do they possess the experience and education to easily grasp accounting techniques or are they pure software developers who rely on pages of detail to explain the logic in order to perform the specific calculations. It’s rare to find a software developer who is able to explain how one can reconcile PPE or balance a CashFlow.

An accountant with implementation skills will be far more effective and accurate and will not require detailed specifications explaining the logic.

It is essential that the team you select is flexible with a focus on simplicity and efficiency. Most important of all is to be sure of the team’s financial aptitude.

		Tip: Ask questions during the selection process that will give you a clear understating of the team’s proficiency and experience in accounting environments.
		Benefits: When you have the right team with a good foundation in accounting the advice they provide will be of a far greater quality. A good team will understand your needs and get things right the first time.

3) Implementation Time
A key factor to consider is the ‘User Adoption Rate’.  Faster implementation processes are more likely to be successful and quickly adopted. Keep the implementation process between 4-8 weeks especially when your reporting requirements are likely to change monthly.

Many software companies rely on additional out of scope charges derived from longer implementation projects. Requirement changes and reduced user input are some of the issues that cause scope creep and extended project time frames.

		Tips: Users need to start working and adopt the system as quickly as possible. There are well established local companies with consolidation and financial reporting solutions that can be implemented within a number of weeks. Make sure that the implementation includes training and that the system will “roll out’ within the proposed timeframe.
		Benefits: Major savings in terms of time, resources and cost. Users that accept and start using the system quickly, increase your chances of success as well as better overall utilisation of the reporting system.

4) Implementation Cost
Ask for a ‘Fixed Cost’ project fee and do not accept quotes based on ‘Time & Material’
Companies who bill based on a ‘Time & Material’ basis will naturally benefit more from lengthier implementations. Companies that work on a fixed cost tend to ensure that they utilise their resources effectively and sparingly in order to complete the project on time and in scope.

		Tips: Insist on a ‘fixed cost’ implementation fee and define the scope of the project.
		Benefits:  Implementation staff will understand and anticipate the complexities of a dynamic and ever changing financial reporting environment. Implementations are more likely to finish within time, scope and cost.

5) Licensing Fees
Three aspects must be considered in terms of licensing fees:
Coming back to our ‘local is lekker’ argument, your license fees are likely to be less costly and volatile if charged by a South African based business.

The license fee model for many financial consolidation software solutions will be based on a “per-user-per-module-basis” (as opposed to a ‘concurrent user’ basis). If this is the case, ensure that they have an ‘Enterprise’ license fee option available. This allows you to purchase a set number of licenses that can be allocated in whichever way you wish (each license can be allocated to any user regardless of module selected).

Ensure that the license fees at the very least include maintenance work as well as ‘updates’ (which can include the elimination of bugs, provision of fixes or patches as well as minor enhancements).  Consider the likely frequency of major upgrades as these may result in the re-negotiation of license fees due to a major shift in the functionality and capability of the software.

		Tips:  Ensure that license fees are fixed and not subject to currency fluctuations and ensure that the fees include maintenance and at least software updates.
		Benefits:  Cost control, flexibility and assurance that the software will at all times provide the functionality as promised.

6) Maintenance & Scalability

Imagine buying a tree from the nursery. Would you buy the tree if you were not able to plant, water or trim the tree yourself and if you were not able to add any more plants or trees next to it or even treat the soil around the tree? If you were forced to hire the nursery staff at a specific rate per hour to perform all these functions, would you still want to buy the tree?

		Tips:  Make sure you understand exactly how ‘self-maintainable’ the solution is. You do not want to contract consultants every time there is a change or scale-up in complexity, size or application of the system.
		Benefits:  Significant time & cost savings as well as flexibility to act fast when there are changes in your reporting requirements. You will also gain confidence in your solution, which will result in the full utilisation of its features and functionality.

In conclusion, the fewer unanswered questions there are when you commence a project of this nature, the greater the odds that the overall reporting solution will be a 100% fit to your organization’s requirements. Always remember to choose your solution provider carefully as the integration of human skill and technology will consistently lead to success.