10 Steps to Reduce Complexity, Increase Transparency, and Get Value from your ERP System

Thank you for Joining!
The webinar will begin shortly.
Presented by:

10 Steps to Reduce
Complexity, Increase
Transparency, and Get Value
from your ERP System

3 ©2022 eprentise. All rights reserved.
Who Is eprentise?
In 2007 eprentise was founded
on its original product, FlexField
 Enables customers to make unprecedented
changes to their financial chart of accounts
while maintaining transactional history and data
integrity.
In 2009 we introduced our Consolidation,
Divestiture, and Reorganization products
 Transformational software which can copy, change, filter,
or merge all elements of Oracle EBS financial systems to
address ever-changing business needs, such as
regulatory compliance and growth opportunities.
In 2020 we began expanding to new markets with our C Collection
analytics suite, and our Audit Automation software
 Automated Audit provides internal auditors and the
finance team with drill-down data from a balance
sheet report into the transaction-level detail. The
software covers hundreds of substantive procedures
for the entire enterprise domain and builds in
consistent audit processes and workflows across the
organization.
 C Collection analytics provides transparency and
identifies potential problem areas with transactional
data. This allows users to reduce costs, leverage
opportunities across the enterprise, improve business
processes, and increase the confidence level of the
users in their data, processes, and operations.
Transformation to Optimization
One-time usage to subscription model

Upon completion of this webinar, you will be able to:
 Objective 1: Identify how organizations data
becomes more complex as companies evolve.
 Objective 2: Explore how IT can add value to
the business and reduce costs, even within an
existing ERP system.
 Objective 3: Review 10 Steps that will help
your organization get the most out of your
data.
Objectives

 Information (data) follows the fundamental
law of entropy
 An organization’s complex IT systems, like EBS,
become more complex as a company grows
through the years
 Companies evolve
 The larger the organization, the more likely it is
that operational or reporting errors will cause
major problems or delays and impact the return
on the enterprise’s vision
 This is often due to a lack of alignment between the
ERP system and business process changes that have
occurred through the company’s development
Information Systems in a Growing Company

 What are silos?
 Silos are information locked in disparate databases,
separate ledgers, different operating units etc.
 They are the barriers to doing business efficiently and effectively that must
be overcome every day through complex workarounds, often resulting in
forgone opportunities
 How do silos originate?
 Constraints of available technology at the time of implementation
 Original configuration no longer support the current business – original setups
(including history) are abandoned for new setups with no way to communicate
between structures
 Mixing EBS configurations, hierarchies, ownership, and security as a
means of quick integration of acquired systems during M&A activities
 Incongruent standardization across the enterprise:
 Process level: corporate standards, governance, and controls
 Data level: data formats, naming conventions
Root Causes of Silos in EBS

Examples of Silos by EBS Structure
Silo
Impact
Statutory and
Regulatory (SEC)
Requirements
HR
Management
(i.e. Transferring
Employees)
Tax Reporting
Compliance
Customer
Relations
Supply Chain
Management
(Vendor
Relations)
Workflows
Separate
Instances
Separate
Business
Groups
Separate
Ledgers
Separate
Operating
Units
Separate
Inv. Orgs.
Multiple
COAs and
Calendars

 IT has a significant impact on the bottom line
 Operating, maintaining, and synchronizing an array of E-
Business Suite configuration items is time-consuming,
expensive, error-prone
 Business value falters with disparate data systems
that lack transparency
 Costs overrun (due to higher-than-expected IT service
delivery requirements)
 Valuations suffer, due-diligences become lengthy and sour negotiations,
operational overhead increases exponentially due to manual efforts
 Customers are lost (confidence in the business is lost
due to consequences arising from working with poor
quality data)
 Opportunities are missed (falling behind competitors in
the marketplace)
The Problem: Wasted Money

 Configurations that support one part of the
business may not support another part of the
business
 Misaligned interdepartmental communication and
collaboration
 Different departments problem-solving issues as individual entities
rather than implementing a global solution leads to fragmented
integration, interdepartmental complexity and further isolation
 Business and IT must cooperate
 Without collaborative efforts to mitigate these
challenges brought about by increasing complexity,
the business runs the risk of furthering a negative
cycle driving value downwards
The Problem: Wasted Effort

 Prioritize Data Transparency
1. Implement a global chart of accounts
2. Get rid of obsolete data
3. Eliminate Redundant Processes
4. Evaluate customizations
 Leverage Global Advantages
5. Operate a shared services center model
6. Normalize supply chain management
7. Coordinate technology availability and access
 Standardize Practices
8. Set guidelines for data stewardship, governance, and control
9. Identify data anomalies and potentially fraudulent activity
10. Ensure that financial records are correct
Add Value & Reduce Costs

 Accounting policies are standardized across the entire enterprise
 Common account definitions
 Fosters consistency while remaining flexible to different requirements
 Improve enterprise governance with commonly defined metrics and
reporting structures
 Reduce complexity of configurations and eliminate redundancies
 Ranging your values logically promotes streamlined reporting, security,
and maintenance
 One type of information in each segment facilitates:
 Cross validation rules
 Security Rules
 Eliminations of overlapping information
 Data has full drill-down and roll-up capability, auditability, and
visibility into all activity for the entire ledger set
 Maintain compliance with statutory and regulatory requirements in
performing financial reporting consolidation
 No conversions necessary for third-party systems, data warehouse
queries, ad-hoc reporting
1. A Global Chart of Accounts (COA)
11

 Add an intercompany segment – take advantage of AGIS
 Add a segment to accommodate local requirements
 Ranges, rollups defined for each country to use
 Local bank accounts
 Statutory reporting
 Location segment (optional) but helps with security, cross
validation
 Implement other modules for detailed tracking at a local
level (through an OU)
 Project Accounting
 Collections
 Implement Multiple Reporting Currencies, secondary ledgers
to report in different currencies
 Don’t rely on spreadsheets
1. Global COA Design Recommendations
| 12

2. Get Rid of Obsolete Data
 Over time, as companies grow by acquisition and sell parts of their
business, EBS accumulates data that the current business does not need
 Historical data from an acquired system that does not belong to the current
company
 Data from divisions that have been divested
 Modules that are no-longer in use or have been replaced by another system
 Localizations that are not needed for the new company
 Ledgers, operating units, inventory orgs are redundant and make EBS
more complex
 Data that exists after a “start-over” when a new ledger or legal entity or
operating unit was created and the old, historical data is beyond the required
retention period
 Migration is more complex when there are duplicate business processes
 The “garbage-in”, “garbage-out” means that reporting and operations in the
new system will inherit the same issues that you had within your EBS
environment that made your close cycle longer, reconciliation more complex,
and required extensive use of spreadsheets and third-party systems
 Data in the new system will not be complete, consistent, and correct

 Standardizing processes enable a global team to:
 Reduce duplication of administrative efforts
 Simplify reporting processes
 Consistent financial reporting
 Faster close
 Increased regulatory compliance
 Streamline supply chain
 Leverage supplier relationships
 Identify inventory valuation problems
 Focus R&D efforts
 Respond quickly to business changes such as acquisitions
or divestitures

 Customizations are often the result of a need to quickly
adapt the data to a specific business need
 They can be problematic for the following reasons:
 Transparency is limited, thus workarounds must be put in place
to manage reporting
 They were implemented to solve a current business problem,
but often hinder long term data agility
 Identifying and eliminating customizations that the
business has outgrown is an excellent way to:
 Standardize processes
 Generate savings
 Position the business for future growth
 Evaluate the customizations to determine whether the
customizations can be replaced by out-of-the-box
functionality of the application
4. Evaluate Customizations
15

 Reduce costs and improve efficiency
 20% to 40% annualized cost reductions with a payback generally in >2 years
 Use low-cost locations, consolidate repetitive data-centric processes, leverage
economies of scale, and reduce headcount
 Eliminate redundant efforts that were common when many corporate procedures,
such as month-end close and expense reimbursement, were regionalized
 Reduce operating/maintenance costs to improve bottom line
 Enable revenue optimization when/wherever possible to improve top line
 Simplify audit requirements, align finance operations with corporate strategy and
create a single source of truth to improve business processes and intelligence
 Create additional capacity for growth
 Reduce operational complexity and implement processes from a centralized
authority
 Improve cash flow with better visibility and cross-selling opportunities
 Generate financial reports directly from the system of record
 Capitalize on enterprise-wide synergies to leverage purchasing and better
understand customer demand
 Obtain access to new markets and scale opportunities
5. Shared Service Centers (SSC) as a Solution

 Identify the information that exists.
 Determine what information needs to be shared.
 Determine what information needs to be maintained
separately.
 Identify common business processes.
 Must be championed from the top.
5. Getting Started with a Shared Services Center
All of the data
must be
consolidated into a
single instance.
There must be a
single Chart of
Accounts that
meets all of the
legal and reporting
requirements of
the business.
All of the data and
business processes
must be complete,
consistent, correct,
and accessible to
those who need it.

 Data and Process Standardization
 Calendars, Charts of Accounts
 Standardize key flexfields
 Similar processes (matching, cutting checks, payroll processing, closing process,
depreciation, costing, etc.)
 Single instance
 Automated end-to-end processes
 Governance
 Different parts of the organization may not be accustomed to sharing their data
 Data accessibility
 Understanding local and statutory requirements of each location
 Supporting infrastructure
 Volumes
 Time zones
 Maintenance windows
 Escalation management
 Training
 Communication
 Setting up organization structures for visibility and transparency
(ledgers, legal entities, operating units, business groups, inventories)
5. Critical Success Factors of a SSC

 Minimize number of suppliers
 Maintain a single item master
 Periodically review the item master to be sure it is updated and
correct
 Use the same items in and among various operating units, as
appropriate
 Periodically perform analysis of purchases specific to
identify unintended purchase price variances
 Leverage discounts and purchasing power across the
organization
 Reassessing pricing and costing models should be done
regularly, and globally
 Have a single inventory organization configured as the
item master
6. Normalize Supply Chain Management
19

 Types of unintentional purchase price variances
 Same item, same supplier, different price(s)
 Same item, different suppliers, different price(s)
 Same item, same supplier, same price(s)
 Analyze vendor pricing by item
 Analyze pricing by item for the same item, different
suppliers
 Uncover cost-savings or recovery opportunities
with periodic analysis of price fluctuations among
suppliers
6. Purchase Price Variances

7. Coordinate Technology Availability and Access
 Availability
 Prearranged level of
operational performance
during a period of time
 To a user, it means the
ability of the user
community to access the
system
 Scheduled vs.
Unscheduled downtime
 Access/security
 Governance and processes
 What is an “allowable”
system change, and who
can implement
21
Types of Availability
Support
Change Request
Release Management
Types of Security
Governance
Controls

 Data Stewardship is akin to accountability
 Maintain accuracy of data
 Validates that data in a source is consistent with a target
 Responsible for the creation, updates, deletion, and
reconciliation of data
 Three steps to formalize data stewardship roles
 Create a system of record of the names of the people and the
data that they steward
 Write the steward responsibilities into their job descriptions
 Evaluate the people on their executed ability to be responsible
for the data
 Data is what makes your company unique and gives it
it’s competitive advantage
 Data is the new currency in valuation of the company
 Common definitions, standards, formats, and domains
8. Data Stewardship, Governance, and Control
22

 Governance
 Effective management of shared enterprise assets is necessary
for an effective global strategy
 Collaboration
 Implementation of effective controls
 Idea of the “benevolent dictatorship”
 There can be no wavering about where the finish line is
placed (a single global instance)
 Anything less than success or short of completion is not
acceptable (no special exceptions)
 Obstructionism is not tolerated
8. Data Stewardship, Governance, and Control

 Internal control approaches
 Prevent
 Access control
• Vendor master file
• Invoice and payment processing
 Three-way matching
 Multiple approvals required based on thresholds
 Duplicate payment controls
 Segregation of duties
 Detect
 Reconciliation with third party documentation (bank statements)
 Analytics
• Duplicate payments
• Unauthorized changes (vendor, customer, and other master data)
• Ghost vendors/employees
• Other analytics
9. Data Anomalies and Potentially Fraudulent Activity

 Make sure that the financial records are a fair and accurate
representation of the transactions they claim to represent
 Produce assurance around the numbers to support the assertion that
there are no material misstatements in regard to completeness,
correctness, and consistency
 By utilizing standard procedures with a controlled review
and approvals workflow companies can get a complete and
accurate view of their financial data
 Automate the substantive procedures to assert existence,
validity, completeness, occurrence, accuracy, etc.
 Reconciling subledger to general ledger
 Reconciling and verifying physical inventory count
 Searching for unrecorded liabilities
 Confirming calculations on inventory valuation reports
 Matching customer orders to invoices billed
10. Ensure That Financial Records are Correct
25

 As companies grow and evolve, their data and ERP
practices must too
 Business value and cost reductions can be obtained by
implementing IT solutions within their ERP
Complete, Consistent, Correct!
Prioritize Data Transparency
1. Implement a global chart of accounts
2. Get rid of obsolete data
4. Evaluate customizations
Leverage Global Advantages
5. Operate a shared services center model
6. Normalize supply chain management
7. Coordinate technology availability and access
Standardize Practices
8. Set guidelines for data stewardship, governance, and control
9. Identify data anomalies and potentially fraudulent activity
10. Ensure that financial records are correct

Thank You!
Jointly hosted by eprentise & Crystallize Analytics
www.eprentise.com | www.CrystallizeAnalytics.com
- One World, One System, A Single Source of Truth -
Keep the conversation going by joining the eprentise LinkedIn group,
EBS Answers, for discussion and all Q&A.
Access to the recorded session and CPE credits* will follow the webinar
by email.
*attendees must participate in all poll questions to qualify.

10 Steps to Reduce Complexity, Increase Transparency, and Get Value from your ERP System

More Related Content

What's hot (18)

Similar to 10 Steps to Reduce Complexity, Increase Transparency, and Get Value from your ERP System (20)

More from eprentise (20)

Recently uploaded (20)

10 Steps to Reduce Complexity, Increase Transparency, and Get Value from your ERP System

Editor's Notes