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FROM TRANSACTION TO TRANSFORMATION:HOW FINANCIAL SOFTWARE KEEPS

PACE WITH BUSINESS

Technology Evaluation Centers

From Transaction to Transformation: How Financial Software Keeps Pace with Business

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Business complexity has increased tremendously in recent years, with the advent of total global trade and data-driven strategy. Finance departments are increasingly expected to play a more strategic role in a business’s development than they have in the past, with a direct impact on the stewardship of an organization.

To keep pace with new demands, financial executives need tools that are just as dynamic and modern as the environments in which they operate. However, too many organizations are hampered by aging technology that is an obstacle to progress, rather than an enabler of growth. That means an increasing number of businesses are considering upgrades to existing software applications or investing in new technology that is better able to support complex requirements.

In addition to providing core functionality, a financials suite must now also address new challenges, such as:

• Increaseddemands for real-time reportingandanalysisof largervolumesofdata. Vendors are addressing these needs by making business intelligence (BI) and other analytical applications, including dashboards and data visualization tools, a standard part of their offerings and by using in-memory technology to boost computation speed and process big data in real time. Think of SAP HANA, or Infor using Amazon RedShift cloud data warehouse. Industry-specific analytics are also a growing trend in corporate BI.

• Complexcompliance requirementsandescalatingcompliancecosts. Vendors are addressing these needs by enabling organizations to automate controls monitoring processes and streamline reporting. Cloud-based applications can also help by supporting fast, automatic technology upgrades that are required to accommodate new regulations.

• A rapid pace of change, caused by factors ranging frommergers & acquisitions to globalexpansion. Vendors are addressing the challenges caused by rapid change through a variety of strategies, such as improved integration technology, which simplifies the process of connecting new systems with other enterprise applications; and cloud hosting, which allows companies to scale server capacity up or down as business needs demand.

The good news is that financial executives have a wider range of choices than ever before for meeting their needs. Keeping both old and new factors in mind, let’s now take a look at elements that are a must for any modern financial and business management application and how some of the top vendors measure up.

From Transaction to Transformation: How Financial Software Keeps Pace with Business

From Transaction to Transformation: How Financial Software Keeps Pace with Business

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Finding a Financial Management Solution—Dream Functionality, Soft Factors, and the Contenders

WhatDoesaFinancialSuiteNeedtoLookLike?

The ideal financial management package includes not just reporting and transactional features, but also tools for financial consolidation, business intelligence (data visualization and forecasting), corporate performance management (CPM), business process management, and online user communication tools.

The CFO’s wish list may include even more in-depth functionality, such as cost analytics, revenue modeling, business portfolio management, investment modeling, capital structure and liquidity planning, mergers and acquisitions and business development planning, customer analytics, pricing and contracts, product analysis, manufacturing analysis, risk modeling, and workforce analytics.

An optimal financial management software package also allows mobile access and full flexibility in deployment options—cloud, hosted, on-premise, or a combination.

Although this is by no means an exhaustive list, an up-to-date global financials suite should address most of the following functionality:

Finance departments are increasingly expected to play a more strategic role in a business’s development than they have in the past, with a direct impact on the stewardship of an organization. ”

“NewStandardFinancialsFunctionality• Embedded and proactive controls monitoring• Built-in financial close and reconciliation automation processes• Built-in cash and treasury functions• Single repository for the main ERP and third-party ERP sub-ledgers• Automated intercompany transactions• Global chart of accounts and analytics• Multi currency support• Variable dimensions and calendars• Flexible general definitions and reporting• Hierarchy of management capabilities• Pervasive auditability, traceability, and extensibility with effective dating and attributes

BudgetFunctionality• Unlimited budgets and budget versions• Flexible budget modeling using shared dimensions and currencies with general ledger (GL)• In-context view of budgets

From Transaction to Transformation: How Financial Software Keeps Pace with Business

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FeaturesforIndustriesandUsers• Industry-specific functionality, such as grants and encumbrance accounting (for government,

research, healthcare, etc.)• Responsive mobile UI design• Shared data across the entire suite• Access to in-memory database technology• In-context documentation and help features• Social collaboration with contextual analytics, alerts, and prescriptive recommendations

ChoosingOnefromAmongEquals:SoftFactorsMatter

There’s been a big shift in many sectors of the enterprise software industry over the last several years, and financial management software has not been exempt. The shift is that virtually all full-suite solutions support the same core functionality—including many of the items listed above—right out of the box.

A quick look at the Financial Applications Comparison Chart at the end of this report shows that the major-player solutions provide full support for virtually all standard functionality. This applies across the board, from the General Ledger set to Cost Accounting, Cash Management, Budgeting, Accounts Receivable, Project Accounting, and Reporting and Analysis. The differences are few and sporadic: Epicor’s budgeting capabilities require some partner add-ons; Oracle, Sage, and SAP are not fully enabled for all delivery modes, necessitating add-ons for cloud or hosted delivery. Infor fully supports 100% of the criteria on this matrix, including complete support for on-premise, hosted and cloud-based delivery.

This is a great thing: we’re seeing high quality all around. But it’s a bit like an Olympic-level competition: one athlete wins out over the others by hundredths of a second on a particular day in a particular stadium. It’s not easy to determine which software solution is best suited to one’s own company when they’re all high performers.

On the other hand, this convergence of functional capabilities and all-around agility has upped the ante on all of the softfactors that surround software selection and adoption. These include the availability of a trusted partner, positive user experience, level of product support, access to other vendor’s technologies, and the overall cost and speed of implementation.

Software vendors are also increasingly verticalizing their financial offerings to meet industry-specific requirements, which can be a persuasive factor in selecting a product. For example, Infor offers grant and encumbrance accounting, which tailors nicely to the public sector, research organizations, software companies, and rental companies. Oracle delivers specific functionality for banking and insurance businesses, and SAP provides financial solutions for dozens of industries via stand-alone applications or as part of its larger ERP packages.

Convergence of functional capabilities and all-around agility has upped the ante on all of the soft factors that surround software selection and adoption. ”“

From Transaction to Transformation: How Financial Software Keeps Pace with Business

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Lastly, since financial functionality is but one component of a business’s software arsenal, integrationwith additional, disparate systems is essential and can be a key determining factor in picking one solution over others.

TheCurrentCropofContenders

Here’s a brief rundown of what’s on the market from the mainstay software vendors:

Epicoroffers a powerful mid-market financial application along with a range of other business packages. Apart from its broad functionality, the solution’s strong suits are its adaptability and simple user experience, deployment flexibility, and scalability. The solution performs best as an inherent part of the Epicor ERP suite.

Infor delivers industry-specific ERP suites as well as comprehensive administrative ERP solutions that include financial management, enterprise performance management, and human capital management capabilities for large organizations and mid-market companies. In recent years, the company has transformed itself from a conventional vendor into an innovative organization and has extended this dynamism to its software in the form of forward-thinking integration and collaboration platforms (Infor ION and Infor Ming.le).

Oracleoffers comprehensive financial and business management software packages that help manage a wide variety of business scenarios. The company is also one of the world leaders in enterprise performance management and financial consolidation solutions with its Oracle Hyperion product.

Sage offers several financial solutions, primarily for small businesses. Its strongest financial application is a part of its flagship X3 ERP product. It is capable of supporting companies with multilingual and multinational requirements, with multiple legal entities, and with a focus on the manufacturing and distribution industries.

SAPmay be the world leader for multiple financial applications for customers that range from large and complex multinational organizations to small businesses. The company is currently deeply focused on leading-edge SAP HANA in-memory–based technologies and applications. When dealing with large companies, using SAP software is considered a prerequisite in some countries.

While large enterprises tend to turn to Oracle and SAP for financial software, typically as part of a much larger enterprise management solution, Epicor and Sage are more suited to smaller businesses. Infor offers ERP suites that support both types of organizations – larger multi-national enterprises as well as mid-market organizations.

Now is a good time to consider replacing or upgrading financial management software. The major vendors have kept pace with business change and with each other. The result is a mature and competitive buyers’ market stocked with solid options that now include differentiators like industry-specific capabilities and solutions designed to meet varying levels of organizational complexity. These value-added offerings should be considered alongside the traditional functionality checklist and in addition to soft factors like product support and implementation services.

Financial Applications Comparison Chart

Epicor Accounting and Financial Management

Infor EFMOracle

E-Business Suite

Sage ERP X3

SAP ERP

Gen

eral

Le

dger

(GL)

GL Development and Management S S S S S

Chart of Accounts S S S S S

Journal Entry and Ledgers Control S S S S S

Multicurrency Capabilities S S S S S

Multicompany Support S S S S S

Multilanguage Support S S S S S

Acco

unts

Pa

yabl

e (A

P)

Supplier Master Data S S S S S

Invoice Processing and Aging S S S S S

Control of Payments S S S S S

Processing of Payments S S S S S

Processing of Checks S S S S S

AP Ledger Posting S S S S S

Fixe

d A

sset

s

Records for Fixed Assets S S S S S

Asset Transactions S S S S S

Depreciation of Assets S S S S S

Depreciation Books S S S S S

Tax Reporting S S S P S

Cost

Ac

coun

ting Cost Data S S S S S

Cost Allocations S S S S S

Cost Allocation Processing S S S S S

Management of Costs S S S S S

Cash

M

anag

e-m

ent Cash Projection Capabilities S S S S S

Payment Planning and Scheduling S S S S S

Electronic Banking S S S S S

Budg

etin

g Budget Control A S S S S

Budget Accounting S S S S S

Budget Development A S S S S

Allocation of Budgets A S S S S

Acco

unts

Re

ceiv

able

(AR)

AR Processing S S S S S

Customer Data Tracking S S S S S

AR Interfacing Capabilities S S S S S

Credit and Collection Management S S S S S

Proj

ect

Acc

ount

ing Project and Coding Structure S S S S S

Cost Coding Structure S S S S S

Project Transaction Processing S S S S S

Repo

rtin

g an

d An

alys

is Standard Reports S S S S S

Reports Consolidation S S S S S

Report-building Capabilities S S S S S

Dashboards S S S S S

KPIs and Scorecards S S S S S

Business Intelligence (BI) S S S S S

Del

iver

y M

ode On Premises S S S S S

Hosted S S S A A

Cloud-based S S A P A

S Supported | P Partially supported “out of the box” | A Supported via partner’s add-on or solution

You can evaluate these solutions and others according to your specific needs and business priorities in TEC’s Financial Packages Evaluation Center.

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