ERP implementation in Finance

Authored by  Casey Caram and Gavin Kostoglian

Disruption is here to stay. Adapt with strategic ERP implementation.

The events of the past few years have solidified a new reality: Disruption is an enduring facet of the new normal. Change is constant—be it from innovation, social and political instability, a pandemic, the Great Resignation, inflation, supply chain shocks, or a multitude of other factors (often compounding together). While predicting every economic shock is an illusory goal, building an agile and adaptable organization is possible.

For many organizations, an enterprise resource planning (ERP) system forms the backbone of the operation—managing financials, supply chain, operations, human resources, and much more. Historically, these systems have been rigid constraints on organizational workforce agility. That began to change about a decade ago as computing power, the cloud, and new software architecture unlocked an exciting new future. Many organizations have embarked on the ERP implementation journey, but in most cases, that is where they stop: implementation.

While turning on a new system makes new technology and capability available, it does not guarantee its value will be realized. Just as ERP is the backbone of an enterprise’s technology, people are the backbone of value creation—making decisions and spurring the organization to action. To fully unlock and realize value, an ERP implementation should strategically become a business transformation. Work, workforce, and technology need to be jointly reinvented to transform into a finance organization built with the agility to handle any disruption.

A missed opportunity: ERP implementation without transformation

Any organization that implements a new ERP without taking a hard look at its structure, organization, talent, workflow, and behaviors is likely not getting the maximum value possible. The business case for an ERP program is broad, but fairly simple: greater transparency, reduced manual effort, single source of truth, and increased productivity—typically all in service of moving faster and at a lower cost. Process and technology changes are fundamental to achieving those outcomes, but they are not the only ingredient. Just as critical is an evaluation of the function’s work, structure, roles, skills, and interactions.

True business transformation occurs when people strategically leverage new tools and processes to create new value (often doing more with less). Absent intentional and proactive change to the work and workforce, the organization is left spending its time figuring out what it should be doing rather than attacking the future with confidence. The readiness of the organization to navigate disruption will likely be hindered. The return on the investment will likely be lower as a result.

Four key ERP implementation strategies for business transformation

ERP implementations are a perfect opportunity to transform the finance function. In seizing this opportunity, Finance  can create or strengthen its strategic seat at the table, catalyzing business strategy and guiding the business to improved results. Consider four critical areas to integrate into the ERP journey to enable strategic business transformation:

1. Redesign  the work: Historically, the work of Finance has been predicated on a complicated, manually intensive data assembly line to generate retrospective reports for leaders, regulators, and investors. For much of that time, most work in the function was oriented around entering, checking, and reporting data.
   
   Modern ERP technology has the ability to remove much of the error-prone manual effort involved—the work that defined traditional Finance. In its place, new work becomes possible with frictionless and real-time data. Reports that took a month to generate—and another week to debate—are more instantaneous, accurate, and trusted. Rather than chasing down errors, manipulating spreadsheets, and getting involved in other time-intensive and low-value (but required) activities, the finance workforce can instead elevate to surface, evaluate, and support strategic decision-making (be it navigating market disruption, entering new markets, or other priorities for the business).
2. Evolve finance roles: With new work, evolved finance roles will be needed. A financial analyst evolves from a data manipulator to an insight generator. Roles previously dedicated to looking backward and reporting history (a task now performed by modern ERP) will look forward and project possibilities. Senior business partners will be equipped with more accurate and more timely data and supported by the ranks of analysts in delivering special analysis for business decisions. Together, these new roles will be catalysts in guiding the organization through rapid change and constant disruption.
3. Upskill your talent: Powering new work, evolved roles, and a future-focused organization is talent—the people. Some traditional finance skills may fade in favor of rising skills such as business intelligence, scenario planning, artificial intelligence (AI) prompt engineering, and more. Acquiring those skills requires intentional choices and a robust talent strategy. The typical financial analyst, accustomed to spending their day merging and editing spreadsheets, will need upskilling to broader business fundamentals, so that they can run forward-looking projections on decisions that directly impact revenue and profitability (and all pieces of the value chain feeding into them).
4. Design for efficiency and agility: With new ERP simplifying and streamlining the finance assembly line, the traditional design for most finance organizations is less relevant for the future. While finance operations and compliance-related teams will largely stick to the traditional model (with greater efficiency), the rest of the function becomes more dynamic and flexible. With work becoming more mission-driven (based on the needs of the business or the dynamics of the world at any given time), teams can convene across reporting lines to bring the right expertise and capability to the specific need. Traditional boundaries between Finance and information technology will blur as Finance takes greater ownership for developing and running the tools it leverages. Implementing a new ERP without updating the organization structure can be likened to buying the latest smartphone but installing a year-old operating system. Don’t miss the upgrade.

Ready for strategic business transformation?

There’s no time like the present. For finance functions embarking on an ERP implementation, don’t wait to broaden the ambition. For those already on the implementation journey, the second best time to get started is now. Start by assessing the organization and uncover what will be required to turn the implementation into a transformation to build a future-ready organization—powered by next-generation technology and talent—to navigate disruption and change.

Authors:

Casey Caram
Principal, Organization Transformation
Deloitte Consulting LLP
ccaram@deloitte.com
+1 415 783 6802

Gavin Kostoglian
Senior Manager, Consulting
Deloitte Consulting LLP
gkostoglian@deloitte.com
+1 212 436 2286