Accounting for Change
Maximum flexibility; minimum cost and disruption
These days, rapid business and regulatory change is the "new normal”, which organizations – and their CFOs in particular – need to take in stride.
In this environment, financial applications must do much more than simple bookkeeping. They need to be exceptionally pliant and enable organizations to continually adapt to structural upheaval, whether it is caused by a re-organization, merger, acquisition or new line of business.
In contrast to the high (and often hidden) costs of ongoing change and business disruption that are associated with Big ERP (Enterprise Resource Planning) systems, CODA Financials offers genuine flexibility and a low Total Cost to Change (TCC) – the true measure of system cost. Download our “Accounting for Change” white paper.
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Are Big ERP systems keeping pace?
UNIT4 CODA believes that Big ERP systems are failing to support businesses and CFOs, as they attempt to do more with less in this frenetic environment. To explore these issues, UNIT4 collaborated with two leading research organizations – CFO Research Services and IDC – to quantify the cost and strategic impact of change.
The high cost of change
First, CFO Research Services studied the cost of change and resulting impact on ERP systems. In their report: “The High Cost of Change for ERP: What Does It Cost to Keep Up to Date?”, they concluded that most organizations spend on average more than $1.2 million per year just to manage and keep their ERP systems up to date, highlighting the importance of considering the Total Cost to Change (TCC) – not just the purchase and setup costs.
“When evaluating ERP systems, companies need to look well beyond their ‘sticker price.’ The question isn’t whether a typical ERP solution supports change, but rather, at what cost?”
CFO Research Services
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Change & business disruption: the strategic ramifications
Next, in a groundbreaking study – “Modifying and Maintaining ERP Systems: The High Cost of Business Disruption” – IDC studied the experiences of 214 business executives, across a wide variety of mid-sized and large industries. Survey respondents said that the inability to easily modify their ERP systems is causing: delayed product launches, slow decision making, delayed acquisitions and other activities that ultimately cost them $10-500 million in lost opportunities.
The key areas impacted by ERP change disruption include:
- stock declines of an average of 20.9%
- customer satisfaction erosion by 16.6%
- lost revenue reported to be 14.3%.
“For ERP buyers in high-change environments, this means that ‘architectural agility to support ongoing change’ may be the single most important buying criteria to minimize change-related revenue loss, business disruption, stock price declines and the lost business opportunities.”
IDC
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How CODA Financials accounts for change
At UNIT4 CODA, we believe that a financial system must literally account for and expect change, whether it is caused by an acquisition, a new set of controls or closing down a line of business. Therefore, our vision and focus is to set the global standard for financial software that helps dynamic organizations adapt to changes simply, quickly and cost effectively.
Link™ – a change-resilient architecture
CODA Financials was designed to mitigate the problems arising from changes, leveraging the unrivalled configurability and maintainability of its Link™ architecture.
First and foremost, the Link™ architecture stresses application configurability, rather than making changes at the database or application tool levels typical of most ERP platforms. Changes are placed in the hands of business users rather than technical or consulting personnel. As a result, implementations are faster, ongoing changes occur rapidly and the total cost of ownership is dramatically lower.
Secondly, the architecture is designed to minimize day-to-day maintenance caused by change.
Link addresses three key change-challenges:
- Processes and controls – mergers, acquisitions, and new lines of business all translate into new processes and controls. The Link™ control framework adjusts for change and makes processes more visible, repeatable, and auditable.
- Reporting – the knock-on effects of change, on both financial and management reporting, are exacerbated by inflexibility in underlying data and reporting structures. The CODA Link™ architecture solves the chart of accounts flexibility problem by providing a multidimensional financial model, which is far superior to the typical account code structures found in the General Ledger modules of ERP systems.
- Application integration – regardless of the cause of change, a financial system must be able to quickly absorb information from new systems and handle changes to integration touch-points. The Link™ integration architecture is second to none, using modern techniques such as web services and XML and acting as a “shock absorber” between applications, by protecting integration routines from underlying system changes. It is backward-compatible, protecting integration links over time.
UNIT4 CODA – embracing change
At UNIT4 CODA, we’ve made it our business to set the global standard for financial software that helps dynamic organizations adapt to changes simply, quickly and cost effectively.
These are the change-embracing values that underpin CODA Financials’ ability to account for change:
- Agile - we design, build and implement dynamic solutions that easily empower you to meet your changing business needs.
- Result driven - we proactively deliver business software – simply, quickly and cost-effectively – creating value today and into the future.
- Connected - we are committed to successfully connecting people, processes, systems and organizations.
- Transparent - we give you ultimate insight and control across your organization.