In 1798 Samuel Taylor Coleridge famously wrote “water, water everywhere and not a drop to drink” (The Rime of the Ancient Mariner). Then, in 2014, over 200 years later, the author Jay Baer summed up the modern-day equivalent of the challenge faced by many shared services and businesses today when he posted on X “we are surrounded by data but starved for insights." This could be paraphrased as “data, data everywhere and not a drop of insight to consume”.
The Finance ERP is the heart of the Global Finance Technology Ecosystem. It is the essential foundation for effective financial accounting not only as the point where all financial transactions are processed and captured but also the primary source of the most critical data required by almost all other finance applications within the ecosystem, including financial planning, budgeting, forecasting, and both internal and external reporting. It is also a key enabler for effective Finance Shared Services.
If the Finance ERP is the foundation, the robust base upon which everything gets built, then the data is the building blocks with which finance and the wider enterprise can build robust structures for internal and external reporting. The extent to which the data is standardized, harmonized, complete, reliable, and consistent will determine the ease with which it can be used to generate more consistent, accurate, and meaningful reports, analyses, and insights.
So, looking first at the Finance ERP...
As mentioned above, this is the foundation upon which the services provided by finance to the rest of the organization and other external stakeholders rely. It is the primary source of the majority of the data that almost all finance reporting, analysis, and insights depend upon and is therefore crucial to the value that finance delivers and critical to get right.
Just as it is difficult, if not impossible, to build a house on unsteady, uneven, disparate or multiple foundations, it is difficult to build an effective finance reporting and data ecosystem on multiple disparate ERPs due to the differences that commonly occur between the different systems:
- Different and non-standard data structures, requiring manipulation and/or reformatting to successfully collate and consolidate into a standard dataset.
- Inconsistency in the level or extent of data held in each system, resulting in the content of any consolidated dataset being only as good or as complete as the lowest common denominator.
- Multiple different codes for the same thing – eg: product, customer, natural account, business unit – requiring mapping to align and harmonize it as well as the effort required to maintain mapping tables and to address potential one-to-many mapping challenges.
- The same codes for different things, needing resolution to avoid mixing “apples and oranges."
- Different and non-standard processes, policies, and controls are applied within each system, leading to potential data quality, integrity, consistency, and compatibility issues
- Different and potentially incompatible platforms and technologies, present potential challenges to successfully collate and consolidate the data and also require the development and maintenance of the integrations necessary to do so.
Having a single or, at least, a more harmonized ERP environment helps to mitigate and reduce the impact of the above, enables greater standardization and consistency of the critical finance data elements, reduces system maintenance and support overhead, and simplifies data collation and consolidation. It is also a fundamental enabler for establishing Global Finance Shared Services.
It creates the opportunity for centralized regional or global teams to become experts at operating a common system and a standard set of processes, policies, and controls across all countries and businesses, eliminating the need for training and support on multiple different systems and providing a pool of trained resources that can more readily cover for absences and leavers and include acquisitions and new businesses.
It also facilitates a more effective and efficient security, control, and compliance environment by standardizing access controls and segregation of duties, which are increasingly important for external compliance (eg: SoX/ICFR), and creating the potential for a more centralized “hub” audit approach.
In 2010, as part of a wider global finance program, Experian successfully established a global Finance ERP, developing and implementing a single global instance of Oracle EBS Financials and subsequently migrating all countries and businesses from the numerous different legacy finance systems to it.
As part of that same program Experian also
- Designed a Global Chart of Accounts (GCoA) and other core standard data elements and embedded them into the global Finance ERP.
- Developed a global single instance of Oracle EPM (Hyperion applications) - fully integrated and aligned with the ERP and also utilizing the GCoA - for consolidation, planning, budgeting, and forecasting.
- Built a set of standard global finance reports – mainly based on Oracle EBS transactional data, as the only standard finance system at that time – which has, with the single global instance as a solid foundation, combined with upgrades and other advances in technology, significantly matured and evolved into a comprehensive data-enabled capability for global reporting and analysis.
- Created a Finance Shared Services organization comprised of 4 regional offshore hubs with teams trained in the use of Oracle EBS, Global Chart of Accounts, standard processes, etc – the beginning of a Shared Services journey that has continued to evolve and grow with additional services and capabilities and which now comprises around 75% of Experian’s Global Finance organization.
- Established, within the Finance Shared Services organization, a master data management team for Oracle EBS, responsible for managing and maintaining the 8 components of the Global Chart of Accounts, the Customer and Supplier master files as well as other standard global data elements including asset categories, purchase categories, customer/supplier types, expense types, etc which were essential to ensure standards, data quality and consistency in Oracle EBS. This too has evolved into a much wider Enterprise Data Management function within Global Finance Shared Services that includes master data management for Global Salesforce and other enterprise applications.
All countries, businesses, and any subsequent acquisitions have been successfully integrated into the Global Finance ecosystem with Oracle EBS, Hyperion EPM, Global Chart of Accounts, standardized data, and reporting owned and operated by the Global Finance Services organization.
The next article will outline the next stage of the journey to Enterprise Data Management and data-driven global reporting, built on the robust foundations established through the initial global finance program.
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