Let me start by saying that the following statement is not intended to offend anyone. But if you have selected and implemented an accounting/ERP software system that did not meet your expectations, stop blaming the software, vendor, or implementation company. It’s your fault.
With that off my chest, I’ll add that it may not be completely your fault. Everyone involved throughout the project can be blamed for failure to meet expectations. It was certainly not the intention of the software vendor or implementation partner to arrive short of your expectations. If anything, I have found during my career that vendors and partners will bend over backwards to implement the system as they believe it should be implemented.
Software vendors, value added resellers (VAR) and implementation partners know their software very well but they don’t know your business. While they often include a discovery process as a part of their implementation plan, the vendor or partner can never know your business and processes as well as you do. Owners or senior management of a company must take responsibility for communicating the business processes, requirements, expectations, and measures of success to the vendor or partner.
Though it may come as a surprise, this communication should not be done during the implementation process. It should have already been done during the selection process. When a decision is made to change your accounting system, business requirements documentation must be one of the first tasks completed.
There are many decision levels involved in the selection of accounting software. The first one is, “Should I change and why?” The reasons for change are frequently related to the lack of features and functions that exist in the current accounting system. Often, employee needs and business requirements have changed because of business growth and changes in products offered. At other times, the company may simply be keeping up with the competition.
Typical Selection Process
The following is a typical selection process for many companies and their executives:
- The company will contact a few well-known business accounting software companies based upon advertisements they have observed.
- The software VAR or vendor will meet with company executives to discuss the reasons for change and desires of the new system.
- A software demonstration is presented and will focus on the features and functions of the software system, including business process areas specific to the company and industry.
- A fee proposal is provided and will include software and implementation costs.
- The new accounting software system is selected and purchased.
Next comes the implementation process, which unfortunately may not meet the business’s expectations. The software VAR or vendor will do their best to understand the needs and requirements of the organization. And the business executives will do their best to communicate them. Yet despite the effort put forth by both parties, there may still be missing requirements or an incorrect understanding of those requirements by the VAR or vendor.
Communicating business needs is a critical step in the selection process and should not be taken lightly. The best tool or method to achieve successful communication is a Business Requirements Document.
This document, when prepared correctly, allows the VAR or vendor to determine whether their company or software can meet the outlined needs and whether they should participate in the selection process. This will help narrow the quantity of accounting systems in your selection pool.
The Six Steps to Success
Here are six steps you can take to develop an effective Business Requirements Document:
1.) Identify a project owner
Whether you select an existing employee or hire an outside consultant, an individual must take ownership of the Business Requirements Document. This person will create the project plan, assign tasks, create accountability and report project status updates to company management.
2.) Provide a background of the company
Background items such as the company’s history, ownership structure, size, industry, locations, products and customers help the VAR or vendor to understand your company. The VAR or vendor may choose to decline to participate in your selection process based on the company’s industry or size.
3.) Business drivers of a new accounting system
Identify and communicate your business reasons for changing your accounting system. This will often reinforce management’s decision to make a change. Common drivers can be the reduction of manual (spreadsheet) tasks and processes, business analytics (business intelligence), database limitations and duplicate or non-integrated systems.
4.) Existing technology and systems
Describe the current technology and business applications utilized throughout the company. The listing should include custom databases or spreadsheets that supplement business processes. This should also include computer hardware (i.e., age, processors and size) and operating systems.
As part of the selection process, it is also important to consider any additional hardware and operating system investments that would be necessary as part of a new system implementation.
5.) Business requirements
Business requirements are the most important pieces of information you can provide. They describe how you and your employees perform essential business activities and duties.
The requirements should include desired changes to your current processes. Can the new system adapt to these? If you expect to maintain most of your current processes, you may be wasting your money. Changing software is a wonderful opportunity to evaluate how you do business. You’re already making a significant investment and absorbing the disruptions, so you might as well investigate what else needs to be changed.
So what’s different about your company and your business processes from a vendor’s last implementation project? The following are examples of functions and processes that should be included in the business requirements:
A. Industry requirements: accounting is accounting, but the process for a hospital is much different than for a distributor. Software that’s specific to an industry is critical, but don’t stop there. Get specific about communicating your business requirements. I have yet to find any two businesses in a single industry that account and maintain business processes identically. Every business is different. That will affect the expectations, the implementation and ultimately, the success of the software.
B. Core accounting: this includes general ledger, accounts receivable and accounts payable. Examples are your interaction with customers, vendors, invoicing, real-time or batch recording of transactions, deferred revenue, and warranty management.
C. Financial reporting, business drivers, dashboard, and trending key performance indicators. Examples would be shipping fill rates, sales indicators, inventory management, customer and product profitability, and segment information.
D. Production and manufacturing processes such as bill of material structure and components, planning, scheduling, cost factors, production workflow, units of measure and product tracking.
E. Quality control, warehouse management, receiving, shipping and inventory management. Examples of these are testing, scrap and rejection management, statistical and trend information, product movement and location, shipping and receiving automation, and warehouse optimization, and automation.
F. Customer relationship management, customer order entry and vendor relationship management. Some examples would be sales and marketing programs, proposal management, and vendor programs.
G. Resource scheduling: a professional service company will schedule projects, need to understand estimates to complete, and availability of resources and employees.
6.) Technology requirements
Selecting a business and accounting software system must also include any technology requirements. Your business environment may have certain technology needs that will play a major role in the selection of a business accounting software system.
Always ask yourself how you can leverage the business accounting software and technology investments to improve employee efficiencies and business processes. In our 24/7, anywhere and anytime business world, you need to consider how each accounting software system utilizes Internet capabilities, cloud computing, and all enhancements to technology that are on the horizon.
Doug Askam is a partner with EKS&H Business Consulting, providing management consulting services in the areas of business strategy, business technology and financial performance improvement. He can be reached at daskam@eksh.com or 303.740.9400.
www.eksh.com/businessconsulting
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