Chief financial officers (CFOs) are increasingly asked to get involved in more diverse projects within their organizations, using their skills and experience to contribute to strategic growth. This creates various challenges for finance leaders, who need to use all the tools at their disposal to make sound decisions based upon quantitative evidence.
Investment in enterprise resource planning (ERP) systems can make a difference for CFOs. From small to larger enterprises, many businesses already rely on ERPs to gain insight and exercise control over business operations. Yet many more are still to launch integrated solutions, citing fears over implementation, training, and budgetary constraints, among other issues.
As such, many CFOs are missing out on an array of potential efficiency, information accuracy, and cost benefits. Finance leaders should consider how ERP systems can add value to their organization by making their job easier.
ERP solutions provide a single view
With ERP at their disposal, CFOs can gain real-time insights into precisely what is happening within the finance function and within other business arms. This means it is possible to manage income and expenditure more effectively, monitor customer orders, and control the business’s stock. The finance chief can see what is coming into and out of the company, where and when, and budget and forecast accordingly.
Ideally, CFOs need to have access to all relevant information in a single location, and this is where ERP solutions add value. Data that exists in a silo is of little use to the finance chief – they need to make decisions based on a range of variables, each of which is impacted by the others. Centralizing data in an ERP system overcomes this obstacle and ensures all relevant factors are considered.
These solutions also help ensure the accuracy of the information since anomalies and errors can be flagged. This is crucial for cash management – mainly as the CFO is likely to be responsible for sizeable budgets. Even minor mistakes in the data used to support decision-making can prove extremely costly when scaled up.
In terms of organization costs, implementing an ERP system allows CFOs to identify potential efficiencies, enabling costs to be reduced across organizations. In addition, integrating data can render some systems and processes redundant. This means they no longer need to be supported, helping to preserve valuable budgetary resources.
ERP offers value to CFOs
Whether organizations embrace on-premises ERP, software-as-a-service, or cloud-based solutions, the same principles apply. ERP solutions offer a more cost-effective way of collecting, managing, and analyzing data, allowing it to support decision-making in the boardroom.
When called upon, CFOs need to ensure they can add value to the debate based on a clear view of the finance function and the organization as a whole. ERP systems can provide this, ensuring CFOs can have courage in their convictions when critical decisions need to be made.
Information used in this article was provided by our partners at Sage.