Live ERP Budgeting, What Is It?
This article will touch on the basics of budgeting with your ERP system.
The process of investing in a new Enterprise Resource Planning (ERP) software can be a daunting task. Where do you start? Do you find reviews online and hope they are in line with your company’s needs and goals? Let me break it down for you. We’ll explore the basics of ERP from software pricing to ERP utilization with third party budgeting solutions.
Gartner defines ERP as the “ability to deliver an integrated suite of business applications. ERP tools share a common process and data model, covering broad and deep operational end-to-end processes, such as those found in finance, HR, distribution, manufacturing, service and supply chain.” As many of you know, a budget is an estimate of costs over a specified period, reflecting a reading of future financial goals and company status. ERP Budgeting allows users to use input forms to add budget numbers directly into the ERP. It also allows an organization to automate and simplify their budgeting process, giving managers the ability to write budget numbers directly to the ERP through a third party solution. This enables managers, who are on the front lines and seeing the market trends, the power to easily budget their numbers, leading to improved accuracy and faster budgeting. ERP Budgeting provides many benefits to organizations, such as improving productivity, eliminating costs and efficiencies, and much more, but it ultimately helps business professionals make better and smarter decisions, without the cost and complexity of traditional budget systems that handles the entire budget process outside the ERP system. This article will focus on the relationship between ERP systems and budgeting.
There are key things to consider when looking at budgeting options for an ERP system, such as customizations, maintenance, implementation, and licensing costs. Customizations depend on your organization’s needs and goals. Maintenance includes minor updates, support, and training. Implementation will vary based on the number of users your organization has, the number of modules your organization chooses, and which hardware your company has in place. Lastly, licensing costs are based on the number of licenses using the budgeting solution. As you get into the cost specifics, more questions may arise. I suggest you take a look at this article on budgeting software costs to get a ballpark estimate.
Based on a study by AIS Electronic Library (AISeL), we see that ERP systems have limited impact on budgeting – and that third party budgeting solutions supplement them. The research in the study shows that ERP systems have limited effect because the systems have the potential to support only half of the budgeting activities. The research also shows that business controllers recognize these limitations, so they rely on other Information System (IS) technologies to accomplish their budgeting tasks and goals.
Whether you are running Microsoft Dynamics AX, GP, NAV, SL, SAP Business One, Sage, or a cloud-based ERP system like Intacct, Netsuite, or Acumatica, finding Business Intelligence (BI) tools can be an even more daunting task than investing in an ERP. Asking the right questions is precisely where one should begin. What solution(s) does the organization need right away? Does your company prefer working in the public cloud, locally or with a hosting company? How much can the company spend? These are preliminary questions to get you and your company started. I’ve mentioned this many times before: ease-of-use, flexibility and collaboration are so important when shopping for the right budgeting tool. If you are going to put in time and money into implementing a budgeting application, you should invest in an application that is not too difficult for you and your organization to use, or you will have to involve the information technology (IT) department to maintain the product. Because planning and budgeting in a company is a team effort, business user friendliness is essential.
Keep in mind that ease-of-use and flexibility are equally significant. For example, as with all other software out there, the most dynamic budgeting applications on the market are not necessarily the easiest ones. Similarly, a simple application with just a few screens and functions can be mastered in a few hours, but will not have the flexibility of the more complex software. Modern BI tools are designed for the end user to access the exact information they need when they need it without waiting on anyone. Flexibility is about how a user can access his or her company data on the go, whether it may be on-premises, mobile-based, and web-based. As for collaboration, think about additional products or purchases that are required to make the product run. Will it run smoothly? The tool should allow users to move away from lengthy back-and-forth email threads with discordant spreadsheet attachments that fill up your email inbox, and instead of trying to combine all of this information together, you can coordinate the budgeting collaboration with modern technology.
Budgeting solutions such as Solver’s BI360, IBM’s Cognos TM1, Oracle’s Hyperion and many others can assist your company with your ERP system. Most organizations are already familiar with Microsoft Excel and are accustomed to seeing spreadsheets. Home-grown Excel budget models may be business user friendly, but it does not come with a database that is conducive to teamwork. Business professionals can be confronted with several challenges when manually linking spreadsheets together for a comprehensive budget because of Excel’s static input forms. This is another great example of why ease-of-use and flexibility are equally important. When shopping for a budgeting tool, you should invest in a tool that upgrades your planning processes for more powerful analyses. Also, an expenses module allows your company to organize your projections for organizational and departmental expenses. Solver offers Excel and web budgeting user interfaces stand-alone or as part of the com
Solver enables world-class decisions with BI360, a leading web-based CPM suite made up of budgeting, reporting, dashboards, and data warehousing, delivered through a web portal. Solver is reinventing CPM with its next generation solution. BI360 empowers business users with modern features including innovative use of Excel in the model design process. If you’re interested in learning more, our team is excited to hear about your organizational needs and goals.