As a controller or CFO in the financial services industry, you understand the importance of selecting a reliable Enterprise Resource Planning (ERP). Your ERP is at the heart of your accounting and finance operations, and serves as the backbone for everything from reporting to regulatory compliance.
It's no secret that regulatory compliance is a top priority for financial services organisations. A recent study by Protiviti and the Association for Financial Professionals found that nearly 60% of respondents ranked compliance as their organization's number one concern. And with good reason - the cost of non-compliance can be significant, both in terms of financial penalties and reputational damage.
What is an ERP system and why do companies in the financial services industry need one?
An ERP (enterprise resource planning) system is a comprehensive software suite used to manage and automate back-office functions. An ERP system provides organizations with the ability to store, track, analyze and report on information from many different departments. Financial services companies are increasingly leveraging ERP systems for their operations due to the significant benefits they can offer.
Some of these benefits include:
- Streamlining workflows and processes- particularly financial consolidation
- Increasing efficiency
- Reducing costs
- Optimizing data management
- Improving insights and reporting
Financial services companies that use ERP systems are able to quickly adapt to changing conditions in the market, while reducing operational risks associated with manual processes. This enables them to remain competitive within their respective industries by making strategic decisions based on real-time data analysis. An ERP system also simplifies compliance with regulatory frameworks such as Basel III or GDPR, by providing advanced features for tracking, monitoring and reporting on customer activity.
Finally, an ERP system provides a platform for collaboration between departments within financial services companies as well as external stakeholders such as vendors or customers. By integrating all of these entities into a single platform, stakeholders can access up-to-date information from multiple sources quickly and securely. This helps foster effective communication across departments which leads to improved customer service experiences and better business outcomes overall.
Top 5 Factors to Consider When Selecting an ERP System for Financial Services Industry
The ability to track and manage financial data
Most ERP systems will have the ability to track and manage financial data, but you should make sure that the solution fits your business requirements. For example, if you operate across multiple entities and subsidiaries, you need to ensure your system can facilitate the financial consolidation process.
Oracle NetSuite offers a comprehensive financial consolidation module called NetSuite OneWorld. The module allows you to operate in multiple countries and currencies, it takes care of inter company transactions, and ensures you are compliant with the tax regulations of your operating country.
The ability to scale with your business
It's important to consider the future of your organisation when choosing the ERP that's right for you. If you are planning on expanding into different regions and entities, then you need a solution that can seamlessly accommodate this. You also need to check that the solution will adapt to meet growing needs.
Cloud-based solutions are the best for this, as they allow you to add on modules and users as and when you need. They also have a better capacity for increase transactions loads, and won't need expensive maintenance to handle the extra pressure on the system.
The ability to integrate with other software systems
The ability to integrate with other software systems is an invaluable asset for businesses of all sizes. It allows for a unified, streamlined experience. It prevents the need for tedious manual data entry across platforms and enables businesses to use each system to its fullest potential.
Therefore, make sure to check whether your ERP system can integrate with other systems easily. If it will require extensive (and expensive) implementations with specialist developers, then it might be better to look elsewhere.
The ability to improve efficiency and compliance
Improving efficiency and compliance are essential for businesses to remain competitive in this ever-changing market. Utilizing modern technological advances, companies can use automation, predictive analytics, and data management processes to effectively own the task at hand while remaining compliant with laws and regulations.
Additionally, investing in employee development programs allows staff to learn new procedures that increase effectiveness, ensuring that businesses stay on top of their game. With the right combination of processes and people, organizations have a great chance of improving their efficiency and compliance in a beneficial way.
The ability to provide real-time reporting
It's said that knowledge is power, and this modern age has given us the ability to always stay informed. Real-time reporting has become essential to businesses in all industries, as having timely access to accurate data allows them to better target their customers, make decisions faster, streamline processes, and outpace their competition. Make sure your solution offers your comprehensive reporting capabilities that allow you to make timely decisions.
Evaluating ERP Options - Step-by-step process for evaluating potential vendors against your criteria
When it comes to evaluating potential vendors, there is no one-size-fits-all process. Every company is unique and the right vendor for one company may not be the right vendor for another. That being said, there are certain steps that should be taken to ensure that you are making an informed decision and choosing the best fit for your organization.
Assess your business needs
The first step in evaluating potential vendors is to make sure you know exactly what you’re looking for. Make a list of criteria that your ideal vendor should meet, including subscription pricing, deployment options, system integration requirements, response times, etc. This will help you narrow down your list of potential vendors and select ones that meet all of your requirements.
Research potential vendors
Once you have established criteria for selecting a vendor, start researching potential softwares and candidates. Check out their websites for information about their products or services, read customer reviews on third-party websites such as G2 Crowd or Google Reviews; and don’t forget to ask around in your professional network to see if anyone has used the vendor/partner before or can provide insight into their work ethic and quality of service. This will give you a better idea of who might be the right fit for your needs.
Carry out Requirements Gathering Piece
You will be able to spot a good vendor from a bad by whether they offer requirements gathering sessions. In order to price an ERP license accurately, you will need to sit down with the vendor and tell them about your current processes, their issues, things you'd like to streamline, and things you'd like to add. If a company does not do this and gives you a random figure, they likely want to hook you in on a lower price and will hike it up once you've signed the contract.
Make Your Decision
It's important to consider all the factors mentioned above, and ensure that your chosen partner offers post go-live support. Getting you live on the system is just the first hurdle, there will be many questions and issues that pop up, and you need a reliable partner that will be there to help you.
As always, make sure that both parties complete due diligence before entering into a contract agreement with each other. Take time to review contracts thoroughly so that everyone is aware of their responsibilities and obligations under the agreement prior to signing off on anything binding them together legally speaking. Doing this will save time, money, energy and frustration in the long run!
Making the right decision when selecting an ERP solution requires careful consideration and research into available options but following these tips should help guide you towards making an informed selection that meets both present and future needs of your organization.
Our team at Threadgold Consulting have significant expertise helping financial services evaluate and deploy NetSuite cloud ERP. Want to see if NetSuite might be right for you? With just one click, get started with your very own NetSuite trial!
