A Foundation for Finance Transformation: Meeting the Challenges of Data Integration

Summary:

This article describes how Finance and Digital Transformation teams can build a foundation for growth – for EPM (Enterprise Performance Management) and beyond. It is a proven success factor for building a foundation for growth that will help EPM teams broaden the scope of their applications while minimizing growing pains of data integration and governance.

 

The Initial Focus of an EPM Project: Creating Business Value

Organizations implement EPM (Enterprise Performance Management) solutions to improve their ability to analyze, plan and report the key drivers, financial results and performance metrics for their ongoing success. Their goal is to overcome information challenges and be prepared for an uncertain future.

Finance teams and the various other stakeholders of an EPM environment begin this process by identifying their most important metrics. Then they analyze their existing processes and evaluate how an EPM solution can help to support their needs in a better way. The requirements that result from this assessment define the objectives of the project and the overall direction going forward.

 

Integration Challenges Arise as EPM Environments Evolve

Whether an organization is implementing a new EPM solution or adding another use case to an existing deployment, there is always a component of managing data. At this point in the project, the integration challenges are limited to the tactical requirements of the project. This means that organizations are often looking for quick wins which then result in simplified data management models that do not take the existing processes into consideration, causing rework and added complexity over time.

More often than not, EPM environments grow and the use cases expand. Over time many EPM teams will implement various project initiatives to integrate systems like

  • Enterprise Resource Planning (ERP): GL Balances, subledger data
  • Customer Relationship Management (CRM): Opportunities and Sales Pipelines, customer master information
  • Human Resources (HR): Workforce planning, synchronize HR and Talent Management systems
  • Planning, Consolidation and Analytics: data needs to be transferred among applications
  • Downstream systems: extracts for data warehouses, BI applications or SEC reporting

Often this results in a “Spaghetti Architecture” which looks like this:

 

 

 

 

 

 

 

 

 

Data Flows WITHOUT a Foundation for Growth

Over time, a complicated mesh of integration processes is typically the outcome of organically growing EPM environments. When a project starts, the need for a foundation is often not obvious yet and the project team can realize several quick wins without a strategy in place. However, this certainly changes over time. This has a significant impact on various aspects of managing EPM environments:

  • Development: The need to “reinvent the wheel” over and over due to the lack of a standard development process based on reusable building blocks. This requires a lot of rework and/or duplicated efforts with small or large tweaks.
  • Operations: The need to maintain multiple processes with potentially very different implementation approaches despite having a very similar purpose. This results in unnecessary errors due to rash or accidental actions.
  • Knowledge Transfer: Getting new employees up to speed is a lot harder. Different implementation approaches not only cause confusion, but also raise questions about the quality of the built processes. This is especially true for small teams which rely on a small number of key people.
  • Change Management: Migrating process artifacts is complex and as the number of processes increases, UAT and regression testing require addressing many more test cases.
  • Security: As organizations are adopting more and more cloud applications, it is crucial to ensure access is managed securely.
  • Data Consistency: Transferring the same data set between applications multiple times often results in discrepancies due to timing.

 

Data Flows WITH a Foundation for Growth

Now that we’ve described the problems in detail, let’s discuss how we can build a foundation for growth. There are so many advantages when an EPM team invests the time to develop an EPM integration strategy – and this is actually not a big investment of time.

In contrast to data flows without a foundation for growth (see above), here is a short list of the improvements that organizations can expect:

  • Development: New integration processes follow an existing blueprint. This framework allows reuse of existing data sets, metadata, mappings and other building blocks to expedite build activities.
  • Operations: All processes follow the same data flow and provide the same type of logging. Mechanisms to manage data, metadata, mappings and accuracy are consistent across all processes.
  • Knowledge transfer: New team members only need to understand the core components of their organization’s blueprint. Once that is accomplished, they can apply this approach quickly to the existing processes.
  • Change Management: The number of new artifacts grows a lot slower. Changes to existing artifacts are infrequent and focus on new development activities. UAT and regression testing are reduced because changes are incremental and therefore minimal.
  • Security: Access can be managed in a central place. Developers and security teams only need to focus on one access point to their sensitive cloud applications. There are no loopholes or forgotten security policies that open vulnerabilities.
  • Data Consistency: Access to source data is controlled and admin teams can eliminate the risk of discrepancies due to timing issues.

By implementing EPM solutions based on an EPM Integration Strategy, the overall data flow will look like this:

 

 

 

 

 

 

 

 

 

With Finance teams expanding their scope beyond just EPM, this can be extended to all Finance Transformation / Digital Transformation initiatives as well.

 

Why is this Important for EPM?

Many organizations have not defined their integration strategy in detail. I see two main reasons for this: first, the data management requirements of EPM projects are not as complex as data warehouses; second, similar concepts are implemented using vendor-centric applications (e.g. Oracle FDMEE), although on a much smaller scale.

Do you absolutely need to build a foundation for growth? No, it is not absolutely required, but medium to large business customers that we’ve worked with over the last decade have seen dramatic improvements. Having a foundation for growth in place has resulted in cost and time savings of more than 70%. Hence, organizations get much more done – with a lot less effort.

Along those lines, we are convinced that EPM teams and their business users will experience drastic improvements if they have a strategy in place. This is based on our experience from many EPM projects across various industries for more than 10 years:

  • Implementing EPM solutions that are easy to maintain despite complex requirements
  • Helping customers by assessing their existing environments based on proven methods
  • Providing recommendations on how to simplify their existing processes

 

A New Integration Platform for EPM Solutions: ICE Cloud

Integration and automation is a crucial aspect of the work of EPM teams and there is no lack of integration and automation solutions on the market. However, none of them cater to the finance and accounting users who are facing different challenges which are not addressed yet.

ICE Cloud on the other hand, is a finance transformation platform which was built for finance and accounting users. With this intuitive, cloud-based platform you can:

  • Integrate your on-premise and cloud application, manage data as well as metadata seamlessly and ensure consistent data throughout your organization
  • Automate manual processes and tasks across applications without writing a single line of code, building secure processes to keep your sensitive data safe
  • Leverage pre-built adapters and best practices to expedite the development process without re-inventing the wheel
  • Rely on one platform to manage all your processes from start to finish, including logs, tracking (and restoring) of changes, one-click migrations

ICE Cloud stands for Integrated, Compliant & Efficient Cloud. It is a Finance Transformation Platform built for Finance & Accounting to support your Digital Transformation journey, building your competitive advantage.

Unlike other integration solutions, ICE Cloud helps our customers to build their processes based on a tailored integration strategy. ICE Cloud allows them to grow with their requirements, accelerate their implementation and reduce the maintenance efforts.

Here are some of the applications that can be integrated with ICE Cloud:

 

Conclusion

Organizations are facing many challenges right now. They need better solutions for planning, analysis and financial close and leverage those as quickly as possible.

EPM teams can reduce their efforts for implementing and maintaining EPM by building a foundation for growth. This concept has been proven in the most complex data management projects. EPM teams who adapt this approach will see significant improvements in managing their data.

As mentioned in one of our original articles about how to “Avoid Growing Pains with an EPM Integration Strategy” the objective of an EPM Integration Strategy is to prepare you for the long run.

In our blog series on EPM Integration Strategy  we explain how to build a foundation for growth. Please follow us on LinkedIn and feel free to share your thoughts in the comments below.

 

Analysis Team is a FinTech Innovations partner and we can help you benefit from ICE Cloud.  Contact Dave Stark (dstark@analysisteam.com) or Matthias Heilos (mheilos@fintechinnovations.com) to learn more.

 

About the Author:

Matthias Heilos is the founder and Managing Director of FinTech Innovations. He has more than 15 years experience building integration and automation processes for EPM and BI applications, working for customers like Bayer, Cisco, Salesforce.com. The FinTech Innovations team has built an intuitive and code-free finance transformation platform called ICE Cloud which provides much needed functionality for EPM Teams to be more efficient.