Integration of data is an on-going headache for finance. Creating accurate, up-to-date forecasts and plans requires today’s finance teams to extract data from many sources. The power this provides finance teams is immense, but so is the integration challenge.
Data Silos are bad for business
I remember, though, when silos were common in IT. Businesses bought a collection of point solutions that rarely, if ever, talked to one another. Some applications couldn’t access certain databases, particularly (though not always) if those products came from competing vendors. Left with few options, frustrated users resorted to spreadsheets as a way to shuttle information from back-end ERP and GL systems to CRM, HCM, or sales force automation platforms.
And when your systems don’t play nice together, there’s a good chance your work groups won’t either. Disjointed, disparate systems stand in the way of collaboration. They prevent you from knowing what’s happening with the entire business. They force you to make decisions on gut instinct instead of data-driven insight.
Just as bad, silos make it impossible for software providers to deliver a seamless experience across all the solutions a business runs, which is a problem because many business processes involve more than one solution.
The right architecture and integration
In the modern era, a closed ecosystem holds no future whatsoever. With the right architecture and integration framework, you can plan using any source data you want—from any ERP, GL, HCM, CRM, or other systems—and present it in an integrated experience that’s easy, intuitive, and seamless.
Size doesn’t matter when you have the right architecture. It’s hard to be open, and it’s just as hard, if not harder, to deliver a solution that companies of all sizes can afford and be delighted by. That’s why most solution providers tend to focus on specific segments and target their solutions at businesses in only those segments.
You will certainly want data from your own systems, be that General Ledger, HR, Sales or Production system, and probably external data such as latest exchange rates. Increasingly though, sources such as key industry databases might be as important; many NHS models use weather forecasts to predict future demand whilst car manufacturers can predict servicing volumes based on data sent directly from their cars. Even feeds from Twitter or the BBC might be critical to your business and forecasting. Whatever the source, if it’s important to you, you’ll want to connect your forecast to it.
When it comes to building a meaningful forecast you want to pull actuals into your model along with an integrated p&L, balance sheet and cashflow view of the plan. Whatever the format, data can be extracted, formatted and combined according to your business needs, then uploaded to your Planning, Reporting or Consolidation model.
You might want a monthly import of your trial balance to the Consolidation module, or an update from your Sales system to populate the Sales Plan or an API link to pull in the latest foreign currency rates and update your systems.
Make data integration a reality
To make data integration a reality you need to ensure whoever implements it has worked either with your particular ERP or is well versed in pulling information out from the right places in the source system.
At Formulate we've worked with clients with SAP, Sage, Dynamics, Netsuite and more. The start point is to understand what the business is trying to achieve with their planning model. Every business is unique and needs a solution that reflects that. The next stage is to ensure that the parameters match so you can compare like with like to get a holistic joined-up view. Finally, you need the ability to create outputs from this information, building different scenarios and being able to share these with the business in meaningful reports.
When building integration capability it is crucial to know where you want to end up - the business has to agree what unit of measurement should be used, and how they plan to use it. With connectors, experience and know-how, Formulate can pull data from any system and at the levels and detail you need to feed your budgeting models.
Today’s businesses are built around open systems. That’s because closed systems create silos, and silos don’t produce the right outcome where it’s essential to maintain agility and collaboration in your business.