Why Evaluating and Reconfiguring Your Financial Management Software is Critical
Why is everything so hard?
Things used to be great. The data entry made sense. The reports were all configured to give us exactly what we needed. Month end processes were efficient, routine and predictable. Now it seems like we’re doing more and more offline in Excel spreadsheets. Coding is confusing. Month end is painfully inefficient and reporting is time consuming compared to before.
When you make a substantial investment of resources in a new financial management system, you have a justifiable expectation that the technology and tools will continue to provide benefits for years to come. For some organizations that are on a relatively stable vector, this works out. However, for many organizations, circumstances create a material shift in the assumptions underlying the design of the finance system.
There are a lot of things that can disrupt the effectiveness of your current system design:
- Introduction of substantially more or different sources of funding
- Substantial growth or contraction in operating revenues
- Functional reorganization
- Mergers with similar organizations
- Introduction of substantially different programs or services
- Key personnel turnover
Besides these factors, the march of time also introduces external pressures on the organization such as new regulatory requirements, technology shifts and new funder reporting expectations.
A common logical pitfall is to assume that the software in place is no longer the right fit for your organization’s requirements. While this is sometimes true, most of the time it is not. In order to realize the full potential of the tools at your disposal, it is essential to periodically reevaluate how you have deployed the system including:
- Is the Chart of Accounts design optimized for your ideal operational and financial reporting structure?
- Are you fully utilizing the applications and components that make up your current system?
- Are there optional applications or 3rd party tools available that could materially improve your financial management effectiveness?
- Is the finance system working well and seamlessly in the context of the entire back office application environment?
- Is your team properly trained to take advantage of what you have?
JMT recommends that all organizations reevaluate their financial system at least every 3-4 years to ensure that the system is, in fact, optimized in the context of the unique requirements and business processes of the organization. We routinely help our clients through this process and what most have found is that it has breathed new life into their systems without having to go through the cost and painful process of evaluating and converting to another system unnecessarily.