As companies grow, systems and business processes are often not the first concerns of top management. Typically, the CFO office and IT team are responsible for sorting these issues out — frequently with very limited resources and budget, against a backdrop of complex legacy issues.
When companies acquire businesses, enter new markets, or launch new ventures, this just adds complexity to the puzzle the CFO office and IT teams need to solve. The landscape becomes cluttered with systems from different eras and a variety of differing processes to manage.
Then there's the "people element". People tend to like doing things their own ways and often resist change, leading to diverse ways of doing things — sometimes with a defined process, but often without. This can result in key personnel having even less time to "sort it out" as they chase after people, information, and numbers just to manage the basic operational tasks.
As if that weren’t challenging enough, legislation and market requirements also play a crucial role, setting ever-changing demands—especially now, when new requirements for e-invoicing and tax reporting are constantly emerging worldwide. This may necessitate new integrations, reporting to authorities, and specific invoice formats, among other things. Not easy!
CEOs and board members typically don't focus much on systems and administrative processes—and rightfully so. Their time is better spent driving the core business. However, they do care about competitiveness, scalability, and profitability, which directly tie into the administrative processes and systems that the CFO office and IT need to solve. At times, they also become excited about new technologies like AI to ensure future competitiveness, potentially leading to additional projects for the organization!
So, we face a myriad of demands: running operations, staying compliant, improving scalability and competitiveness, and implementing new technologies. This often occurs against a backdrop of a tight budget, substantial legacy issues, and severe resource constraints. Where to even begin, especially when you might lack the necessary knowledge about all the legal and compliance requirements, possibilities, and available technologies?
Changing anything in the current ERP and business systems landscape has proven to be incredibly costly, slow, and risky. Even colleagues in other companies and the news confirm it's extremely challenging, and many have failed. "Don’t take on an ERP upgrade project; it can risk your entire career!" is not an unheard advise.
Fortunately, there are strategies to try and tackle the challenge, each with its own issues and benefits. The table below summarizes three common approaches companies can take:
|
Approach |
Typical key benefits |
Typical key issues |
|
Select a global ERP vendor to “sort it all out” |
Ability to harmonize everything. Potentially just a single vendor to manage. Broad set of features for various needs. Consultants & knowledge available (for a big fee though). High long-term potential to develop. |
Potentially a multi-year project with high risks. High-cost to implement and to change anything in the future. Average solution for most things, but not great at anything. May not bring the needed process knowledge to the table. |
|
Hire an experienced consultancy to help you out |
Can evaluate what best fits your needs and propose a tailored approach. Brings in knowledge you don’t have (solutions/ markets/processes/ compliance). |
Can be very expensive approach in terms of total cost. You still need the solution vendors separately. Incentives not always perfectly aligned with your needs (you may end up buying a lot of hours). |
|
Let each country/ unit just deal with their issues and try to build some visibility on top of that |
Typically lower cost solution in short term. Local expertise utilized to solve local specifics. “Out of your mind”. Existing elements (processes/systems) may be utilized without big changes & investments. |
Builds a lot of complexity in long term (just becomes harder to solve later). Scalability suffers. Visibility & control suffer. Difficult to utilize new technologies or get on-time business visibility. |
Actually, there is something close to that! It is often overlooked but is also becoming an increasingly popular approach to flexibly meet the changing demands of country capabilities & compliance, improved visibility, and more automation. It is based on extending almost any ERP's capabilities with best-of-breed solutions that integrate easily and cost-effectively to the existing core ERP infrastructure, regardless of its complexity, age, or brand.
There are also multiple providers operating in this market of "ERP extensions," some offering spot solutions and others providing more comprehensive process solutions, such as the entire Invoice-to-Pay (I2P) and Invoice-to-Cash (I2C) layer on top of the ERPs across multiple countries.
This approach has already helped many companies extend ERP capabilities and lifecycle, and meet changing demands in an easier, more cost-effective, and less risky way.
|
Approach |
Typical key benefits |
Typical key issues |
|
Multi-country ERP extensions as a service |
Typically the lowest cost option to implement & maintain. |
Only a few providers who can offer a wide set of features and country coverage. |
Read more on why it might be a better approach to combine your ERP with best-of-breed AP & AR solutions and how it also decreases major business risks.