As your company’s CFO, your goal is to be a strategic partner with the CEO and the rest of the C-suite by bringing expertise in the areas of risk management and capital allocation. When finances and risks are under consideration, you’re at the forefront providing options that not only mitigate strategic risks but also enable your company to grow. An ERP system can be the best, most supportive ally you can have as you do your work as CFO.
Here are some of the ways an ERP system benefits CFO data collection as you engage in your strategic role as CFO:
CFO-ERP System Benefit #1:
Data Silos Get Busted and You Can Leverage Data Across Your Entire Organization
An ERP system is a must-have for the digital transformation of your company. At the foundation of any digital transformation must be a single source of truth, not multiple, disconnected systems. If you as CFO have your own systems and separate databases related to finance/risk management, and the production manager has her own systems and separate databases related to production, and the HR manager has . . .well, you get the picture. The result is confusion, inefficiency, and a lack of actionable business intelligence available for fast, data-driven decision making.
Having 25 different systems that aren’t integrated and can’t report data in real time is a major headache, not just for the CFO, but for everyone. Simply collecting, compiling, and reporting all the relevant data from all these silo’ed systems takes an army of people and a long lead time. An ERP system benefits CFO data compilation so you can avoid these hassles and have the data you need, when you need it to make great, data-informed decisions.
CFO-ERP System Benefit #2:
Making Your Data Actionable
An ERP system, especially one that integrates Business Intelligence (BI) software, can offer a CFO what a cockpit on a 757 offers the captain: full visibility into all relevant data and KPIs right at your fingertips. Not only will an ERP system provide you a real-time dashboard for all relevant financial KPIs, but CFOs can also gain transparency into the operational KPIs that are driving those financial indicators. When issues and concerns emerge, an ERP system allows the CFO to quickly perform a deep dive into relevant data, enabling the identification of root causes of issues. Moreover, the availability of such data helps the CFO perform the role of strategic partner within the C-suite, facilitating data-informed collaboration and collective decision making.
CFO-ERP Benefit #3:
Process Improvement Gets Unleashed
An ERP system offers immediate visibility into your financial and operational KPIs, across the entire organization, and this visibility allows you and anyone else in the company to make short and long-term process improvements when things aren’t going according to expectations. A machine operator, for example, can see how the machine is performing and make adjustments, without waiting for his manager to order corrective action the next day. Data analytics, which an ERP system makes easy to perform, are also becoming increasingly predictive, enabling you to identify historical patterns and proactively take advantage of them.
For instance, your ERP system may uncover that your company sells 15% more of your inventory in one region of the country in June. Having this data allows you to plan accordingly, perhaps by producing more inventory or experimenting with a price increase. In short, you can use your data to track performance trends and make improvements in how you work.
CFO-ERP Benefit #4:
Reducing Costs Related to IT Infrastructure
Few things will make a CFO more frustrated than large investments in IT infrastructure that aren’t being used to full capacity. With Cloud ERP, your company need not buy and maintain expensive hardware and software. All of those costs get externalized and absorbed by the outsourced ERP provider. Even better, with Cloud ERP, you only pay for what you use, as you need it. So unlike legacy, on premise IT infrastructure, you’re not losing money because of unused IT capacity that’s simply taking up space. The word for all this: cost-optimized.
CFO-ERP Benefit #5:
Reducing Costs Related to Expensive IT Projects and Hiring/Retaining Talent
As every CFO knows, it isn’t just IT infrastructure that’s expensive to bring in and maintain, IT talent is exactly the same. An in-house IT team can be an employee retention nightmare, as competitors seek to hire away your top IT talent. In response, you’ll need to increase salaries and benefits to maintain the status quo. When you work with an ERP partner, the costs related to maintaining the system and IT talent belong to the ERP provider, not you. Again, you pay only for what you need and use, without the need for expensive, long-term investments in hardware, software, and IT talent.
CFO-ERP Benefit #6:
ERP Makes Your Business Scalable and “Expandable”
Is your company is expanding geographically, perhaps looking to purchase other competitors via an M&A (merger) strategy? If so, the CFO’s essential role is to evaluate and mitigate the many risks connected with such acquisition growth. If you have a Cloud ERP system, your IT capabilities are easily scalable no matter where you go, across town or around the globe. No need to install hardware, software and IT people in a new location, because your ERP system and your data are securely accessible via the Cloud. Instead of being frustrated by the many IT complexities of growth, your ERP system easily grows and goes with you.
CFO-ERP Benefit #7:
Keep Up With the Latest Tech Trends
Since you’re working with an ERP partner who has a centralized set up serving multiple clients/users, the ERP provider has every incentive to keep up with and offer all the latest updates in the technology. So instead of falling behind with your on-premise IT infrastructure and talent, your ERP provider keeps you current with system updates and new offerings. In addition, you can enhance and add to your ERP system, depending on your needs and the demands of your business. You are given a menu of options and can select what you want. This not only works from a strategic and tech perspective, but from a cost control perspective too.
Interested in the numbers? Check out our downloadable guide, the KPI Playbook for Modern Manufacturers, which talks about the most important KPIs you should be tracking for your business.