ERP implementation is an investment that may or may not pay back for the investment. A successful ERP implementation involves much more than an easy ‘plug and play’ type.
The ERP implementation process is quite long and involved, and the implementation process is a very important part of it. As the implementation begins, both the internal and external audit departments and other management departments will start to play an important role in this process.
ERP implementation is often a challenge for small and medium-sized enterprises (SMEs), and the following roles management accountants play in this process will help you better understand this situation.
Role of Management Accountants in ERP Implementation
One of the areas that have a significant impact on the success or failure of the implementation, which is often overlooked, is the role of management accountants in ERP implementation. Management accountants are the liaison between business operations and financial reporting. Without a good understanding of the financial impact of the implementation, many implementation projects fail.
Before an organisation is ready to implement the ERP system, its management accountants must be prepared for it. Following are some checklists to ensure that the management accountants are prepared for this change process:
- Have clear objectives.
- Be prepared to listen to others.
- Ensure that you have a clear understanding of your business requirements and that you have taken time to develop a complete implementation plan.
- Expect and plan for a productivity dip in the first 2 or 3 months (learning curve).
- Achieve a balance between using external consultants and internal members.
- Don’t first rely on external consultants but recognise that those with experience have a contribution to make.
- Obtain support from top management and manage senior management’s expectations.
- Understand the data architecture and how you can get to the data.
- Make yourself aware of what the software can do. Understand what is possible, what is essential, and what is not necessary.
- Do as much as possible yourself.
- Challenge traditional reporting.
- Find out what you need to do on a routine basis and make sure that you can do these as quickly and as trouble-free as possible.
- Change working practices to work with the software (unless there is a good reason for not doing so).
- Use a standardised approach as much as possible.
- Don’t get carried away with what the system can do — make it work for you by producing the information you need, not the other way around.
- Do not experiment with things that have not been done by others previously.
- Don’t assume the integrity of migrated data.
- Stick with it, keep an open mind, be patient, be persistent, be disciplined.
- Be aware of controls like segregation of duties.
- Keep an open mind about improvements that could be made.
- There will be weaknesses in the system — try to eliminate them.
- Avoid getting stuck with a backlog of half-finished things in the system.
- In using the ERP system, try to empower others, improve data integrity, simplify processes and automate elements of internal control.
- Use the system as a source of information, not as a source of data, that is, as an MIS, not as a data repository.
- Be prepared for a shift towards more forward-looking analysis; synthesis and analysis skills are essential address the big picture.
- Understand the data, analyse and gain insights from the data.
- Communicate your analysis and insights to senior management so that they are alerted and can act on that data.
- Attend customer and/or business meetings and demonstrate what a management accountant does and performs.
- For new management accountants, an appropriate introduction to the way the job is done is vital and should include training in the use of the system and detailed instruction in the business processes and in how the system interacts with those processes — they need to know how what they do affects and is affected by the system.