Feature: Getting a handle on the business

Financial management software is the information hub of any organisation

The scale of many New Zealand businesses means they prefer an off-the-shelf financial management information system (FMIS), believing it to be easier to use and maintain.

That was what construction company Fulton Hogan went to market for when it abandoned an outdated Hays system in favour of Oracle several years ago.

IT manager Rhys Gould says Fulton Hogan had outgrown Hays, so it went to tender for something larger that would grow with the business. Fulton Hogan liked Oracle’s “strong” job costing management program and the system was also well supported, he says.

Installing the system presented “all the normal change management issues” for the business, but a phased implementation across its New Zealand and Australian operations helped overcome most of the pain.

Looking back over its four to five years of operation, Rhys says the system has performed well and an upgrade is planned.

He advises IT managers planning similar projects to stick to a defined scope, note the “nice things to have” and complete these later, if they are beneficial, and to establish user groups early and keep them alive.

“Ensure business processes are updated and responsibility for those is well defined and understood,” he advises.

A lack of internal audit capability was the issue for Customer Loyalty New Zealand, which manages the Fly Buys loyalty card scheme. This led the company to abandon MYOB in favour of Microsoft Dynamics NAV.

Loyalty New Zealand also sought improved information flow and smarter reports in a better format. Deloittes helped with the selection process with system critiques, while Intergen was the implementation partner.

Finance manager Stephen Bayley says Microsoft Dynamics NAV was able to integrate with other parts of the business and Intergen also showed Loyalty New Zealand a successful implementation of Dynamics NAV at the Electricity Commission.

However, Intergen did not handle the invoice approval process well, he says, leading the company to appoint an inhouse business analyst. The company server was also unstable following the November 2007 launch, which was only cured when a software audit revealed there were two server management products competing with each other when only one was needed.

Looking back, Bayley says he would not have used Deloittes so much and he would ensure a business analyst was part of any implementation team.

“We definitely have a new ability to slice and dice information in a more strategic manner, and that will give more independence to business groups to manage their cost centres more effectively,” he says.

“We’ve been able to tighten up on processing at the front end, and we’ll start to see some real gains in processing times. We’ve got 100% data capture, quality reporting and a richer environment to work with. Some wins will be immediate, but the real intention was creating a robust platform that will provide what we need in the future, by bolting on more capabilities as required,” he adds.

Auckland warehouse company Bringans also had to replace a 1980s computer system recently, and appointed an independent consultant to help with the process.

Sage Pastel Evolution was the chosen solution, as inventory management was critical to the business, with the company managing some 42,000 stock items in its warehouses. Director Robert Bringans says single invoices can have over 200 lines, so ease and speed of invoicing was critical.

Sage Pastel was able to quickly configure the system to shortcut processes, with inventory management and stock tracking key functions. Evolution was also fast at supplying information either on an ad hoc basis or by using report-writer to create specific reports.

Over the years, the system has been upgraded to handle the use of barcodes, online transactions and web-based enquiries. And with support from distributor Passage Software, Bringans says it expects many years of use and value.

“It has brought an urgency into our workplace, a real appreciation of computer results in real-time — especially in accounts and stock on hand. It has saved time in that we can print reports that mean something rather than spend ages deciphering and analysing endless screeds of “computer paper” data, hoping to come up with a result,” Bringans says.

“Now we can send our customers their invoices (before they get their goods) via the internet using Microsoft Excel, saving paper in the meantime and allowing the customer to input the stock just-in-time, as the goods arrive in-store. Our suppliers even send us import docs in Excel, simply transfering costing info as we do it into the computer, saving time, money and paper,” Bringans adds.

While some firms go for larger tier-one systems, marketing company SellAgence switched from Oracle to Greentree, feeling such a large system was “overkill” for their needs. IT manager Mark Emirali says the company’s whole IT system was overhauled, not just ERP and switching to Greentree delivered more efficiencies.

On seeing some Greentree sites, company executives were won over by Greetree’s ease of use, ability to migrate from one system to another, and ability to drill down for information. Verde was chosen as implementation partner.

Greentree was delivered “out of the box” and since its implementaion in early 2007 has been cost effective, needing fewer staff to support it. It had similar functions to the old Oracle system and has also been able to expand to cope with major new clients, such as Kodak.

“The cost of ownership has plummeted,” Emirali says.

SellAgence is also integrating Greentree with electronic data interfaces and data warehosusing tools, with other modules planned for the future. It has also virtualised Greentree onto other servers, boosting its disaster recovery capability.

Emirali adds the ease of use and lower maintenance of the software means he can now focus on the wider business rather than just maintenance issues.

For Kevin Towart, owner of Canterbury Gas, being a local company helped him choose Chistchurch-based Chreos in place of MYOB.

“Basically, it runs our business,” says Towart. The Chreos system also offers a database, it handles orders, parts and deliveries and is “very user-friendly”, he says.

The system has run for seven years and has grown with the company, with Canterbury Gas receiving special help as one of the first Chreos customers. Radical changes can also be customised for the business.

Canterbury Gas says the software has coped with the rapid expansion of its business over the years, with it also being able to better plan deliveries of Rockgas for drivers.

“There’s endless amounts of reports. It’s knowing what you want to see and analyse,” Towart says. “We can also go to the company and say we want you to enable us to do this and nine times out of ten it happens.”

FMISs work harder, integrate better

Financial management software is more than just tarted-up accounting software. Not only does it include traditional functions such as accounts payable and accounts receivable, it may also offer financial management and compliance consoles which, if well implemented, can provide an intuitive, multi-layered interface that delivers customised views of financial metrics.

With it users can quickly assess financial and compliance performance, drill down to supporting data, identify potential issues and take appropriate action.

Financial management information systems (FMIS) have grown in importance in recent years, as firms grapple with issues of market volatility and business agility, higher performance expectations, regulatory reform and the need for high quality business intelligence.

Users seek manageability, low cost of ownership, ease of integration, scalability, reliability and availability, security, cost and skills. They also want to integrate their FMIS with typical supply chain management and/or customer relationship management systems and maybe other specialist best-of-breed systems.

Major players are there to cater for that demand: Oracle, SAP and Microsoft. There are also smaller specialist suppliers such as Sage Pascal and Cognito. There are New Zealand-based suppliers such as Greentree and Chreo; and even open source offerings.

Geof Nightingale, of Sage Pastel distributor Passage Software, says companies are seeking an all-in-one solution for different functions, including retail business, e-business solutions, customer relationship management, and enterprise resource planning functions.

Businesses also seek FMIS systems that can manage documents, and its no longer a case of just debits and credits.They also want FMIS to integrate with many applications.

“Many clients are happy with the obvious items such as contact management, online website and e-banking. However, with more knowledge about what is actually on the market, clients are asking for instant invoicing; billable activities; inventory update; foreign currency handling, and automatic messages being fired to staff involved in a particular activity,” he says.

Companies often have a set budget and it is up to a supplier to show value and not over-sell a product, Nightingale says. Where a firm seeks more than they have budgeted for, suppliers must be honest. This is another reason why partnerships matters, as often new systems will need to interface with a client’s existing or bespoke software, he adds.

It is the issue of integration that led Greentree to see FMIS as just part of the wider business landscape, which includes financials, distribution, project costing, and so forth, with nothing seen in isolation.

Director Peter Dickinson says users want an FMIS that includes business intelligence capabilities, such as stock managing and reporting. As New Zealand companies have pushed more into overseas markets, foreign currency capability is another function in demand.

Internationally, there is also a trend for smaller businesses to manage their finances online, using a software as a service model, something Greentree will launch shortly.

Dickinson says he has a “bugbear” about integration, saying rival FMIS suppliers typically have loosely coupled interfaces. But true integration is different, he says. Often rivals will use the word integration when they really provide an interface and too many interfaces can create a mess with a “nightmare” of separate processing runs.

Instead, Greentree promises a 360 degree view across all of the business with its single Greentree product and various modules. There is a homogenous database and there is no redundant or duplicated data in the system, ensuring reliability and simplicity, he says.

Christchurch-based Chreos also aims to ease integration issues through its modular accounting software. Managing director Steven Wild says his product performs the same functions as other medium or large-scale products.

“We don’t have sub-modules. We have a client management system, debtor modules, creditors, inventory, POS, ledger, job management. Then, there are other specialised modules, such as an Apparel overlay, to deal with colour, size, style and delivery. We have modules for employment agencies and lots of industry specific applications,” he says.

Chreos is able to adapt to a company’s existing system rather than them having to restructure their business to fit the software, he says. Consequently, Chreos can fit market niches extremely well, he says.

Internally, the software is completely integrated, Wild continues, and the interface allows developers to write third-party applications.

Wild adds that customers are seeking interaction with the web and looking to automate staff-intensive processes, including not using paper or needing data re-entry.

“Because we have a focus on businesses streamlining processes, users get efficiency in our systems,” he adds.

Cognito also promises ease of integration for its Moneyworks and Cashflow products.

Support manager Simon Brown says FMIS systems often bring together various best-of-breed offerings. Cognito, which supplies “your typical New Zealand business” with a third of clients offshore, says its software can also handle a variety of platforms and hold vast amounts of information.

One of the larger vendors in the FMIS space, Oracle, says its JD Edwards Enterprise One Financial Management system helps firms respond to changing environments, streamline their financial operations and improve the accuracy of financial reporting.

Enterprise One is aimed at high-growth businesses and the traditional midmarket, Oracle says. Oracle believes it differs from rival systems in its flexibility. It can handle changes, such as re-organisations, adding new distribution centres and new product lines and it can be folded into existing financial operations, without compromising the integrity of historical data.

It is also pre-integrated, with all its financial and accounting solutions linked with other Enterprise One modules. It also offers Collaborative Capabilities. Oracle claims users can easily extend business processes to interact with business partners.

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