For more than 15 years, I have been promoting projects in the area of consolidated accounting with my clients. Most projects of this kind start out with the same idea. The idea is: "We need a new consolidation system", followed by the question of: "Which system is the best one for us?"
Have you ever wondered the same thing? Let me tell you that it's the wrong question, or at least the wrong time to ask it. Instead, start out by answering a few other questions before deciding to introduce a new consolidation system in the first place.
The truly important questions are:
- "What do I want to improve about my financial statement process and its results?“
- "How to I want to achieve this?"
- "What requirements do I have for system support?" and only then
- "Which system support is optimal for me based on these answers?"
Of course, it's more fun to pick a new system right away and to buy it instead of going through the tedious analysis of the current processes and structures first. We like to believe in the provider's promises that a new solution alone will make all issues – no matter their kind –disappear. We will take the time to implement and process the above questions later. A consultant can do that. The author of these lines does approve of the latter.
So let us first deal with the question of: "Which system is the best one for me?"
The most frequent reasons for introduction of a new consolidation system
What is usually the catalyst for "we need a new consolidation system"?
In my experience, the most common reason is actually comparatively simple: most of the systems used in a corporate group have been used for a long time. They are consolidated and often have long ceased to be serviced and developed further by the provider. Of course, that is a mandatory argument to replace the system in a prominent process such as compilation of the consolidated statement. Important examples include SAP ECCS and Hyperion Enterprise. SAP BCS and HFM will probably soon join them.
The second-most frequent reason is dissatisfaction with the process of compilation of financial statements, which is characterized by many manual activities and secondary calculations in Excel and also often prone to errors. Where reporting is concerned, you will only receive static and bleak Excel reports from your system. The system providers promise improvement here. The consolidated statement will be automated or, as the spirit of the times now calls it, digitized. Digitalization can be sold much better internally as well.
I have already mentioned the last reason. Why start an exhausting process re-engineering project if all you need to do to avoid it is to buy some new software?
Let us leave it at this regarding the reasons for the questions to be asked, or not to be asked, in advance. Once the decision to introduce a new system has been made, it needs to be selected. That is best begun with an overview of the different system providers and trends on the market.
Trends on the market of the system providers
First generation
There have been multiple innovation waves since introduction of the first automated systems for the consolidated statement. Do you still remember systems such as PC Konsol by EY? At the time, Excel packages were emailed out for that and similar systems, completed manually, read in centrally and errors were coordinated by the group in consolidated accounting.
Second generation
The next system generation permitted online recording of figures, online validation, online IC reconciliation and automatic upload of the figures into the consolidated system. These solutions were a great step towards digitalization of the consolidated statement. Manual steps were removed. Errors were noted by the originator and group accounting no longer had to chase down every single error but would control and review only the process. All of this was already possible more than a decade ago with systems such as SAP BCS, HFM and Cognos Controller. These systems mostly automated the elimination and changes in the consolidated group.
If your processes can still offer this, your current system is not your issue, if you get my meaning. If you are still using old systems such as SAP ECCS or Hyperion Enterprise, please call me.
Third generation – the trends and innovations of the current system generation
The most obvious improvement is in usability. Modern systems simply look better and can be operated more intuitively than, for example, SAP BCS, which was presented to us with the usual and beloved old SAP GUI. What is the benefit of this? It's difficult to measure. But there is no question that users love a system with a modern interface that can be operated (more) intuitively and is designed well-structured. You may look forward to this!
High-performance reporting with Business Intelligence
The new options in reporting can be described more specifically. Today, all modern systems permit setup of online reporting in the web, to be used on any end device. This makes the board happy and the people in the engine room of group accounting even happier. They can now generate any analyses and answer any ad-hoc requests quickly and with little effort.
In order to provide this high-performance reporting, the providers rely on in-house business intelligence solutions (such as SAP with Business Objects) or are open for the market standards of the established BI world (e.g. Qlik, Tableau, Cognos, MS Power BI). The latter improves your freedom and enables you to use the BI tool strategically placed in your group. The CPM platform by CCH Tagetik is one of the few solutions that are open for all solutions on the BI side
