Recently, CFO magazine published an article by Rob Livingstone pointing out the significant disruptions and cost savings yet to appear in the provision of cloud computing services.
As is true in many industries, Mr. Livingstone points out the inevitable consolidation that will take place among service providers, particularly those in the Enterprise Resource Planning (ERP) space. One only has to look at past acquisition activity of firms such as SAP, Oracle and other ERP providers to see this consolidation already being played out. The article goes on to explain how CFOs can mitigate this risk, his ideas include:
- Reviewing contract terms for termination and service level guarantees;
- Identifying migration risks; and
- Understanding the business risks of vendor failure.
While we agree with these steps, we believe this risk also calls into question the decision regarding exactly where an organization builds its operational support for its accounts payable (AP) and accounts receivable (AR) business processes. DataServ has worked with numerous organizations to think through this issue, here are the most compelling reasons for building your AP and AR processes outside of the standard ERP offer:
- Faster, less expensive start up - Moving the development of your business process outside your ERP relieves your team from fighting for scarce internal resources and competing priorities. We routinely implement fully functioning, highly tailored AP automation solutions for clients in less than 90 days. Secondly, ERP technical resources bill at two or three times the cost clients incur for one of our solutions.
- More responsive service after launch - While it may be possible to get the required corporate resources to initiate your project, gaining resources after launch becomes nearly impossible. With many ERP integrations lasting for years, your function may never be assigned a high enough priority to make changes and address issues not readily identified (or fixed) from your initial launch.
- Effective solutions require more than technology - While it is true that effective AP and AR processes require solid technology, without well-designed processes, on demand access of stored images, and the ability to quickly convert all forms of documents (electronic, paper, EDI, …) into quality data, your chances for success are limited. ERPs are simply not equipped to provide your business with anything other than “off-the-shelf” technology.
And as the author of the attached article so well describes - putting all your eggs in the ERP basket may well present you with significant business risks down the line. DataServ can help design a Software as a Service (SaaS) solution that gives you effective, efficient, and secure purchase to pay and quote to cash solutions.