Arbela Blog
Back to Blog Index

Financial Shared Service: Unmask the Financial Framework Mystery

by John Cowden, Senior Director and Strategic Engagements

When I was a child, I spent an ample number of hours properly educating myself in front of the TV watching the cartoonish real-life tails of Scooby-Doo. For those that didn’t have the privilege of partaking in such informational wealth, Scooby-Doo was a member of sleuth company named Mystery Incorporated. Mystery Inc. was made up of 4 teenage kids and one larger than life dog named Scooby-Doo. Their sole purpose was to solve terrifying monster mysteries that were entrenched in a twisted web of chaos and suspicion. After many failed attempts to capture the monster and eventually untangling the web of deception, the mystery was solved. The villain behind the monster mask was captured and the chaotic storm of events transitions into a state of tranquility. In turn, each episode ended with the no-good deviant in law enforcement's custody while saying something like, “And I would have gotten away with it too if it weren’t for these meddling kids”.            

As the world of business continues to evolve, acquisitions and mergers are becoming a regular part of the underlining fabric. Where the negotiations to close such ventures requires hard work, the daunting task of untangling the web of digital architecture that accompanies these ventures into a cohesive manner can be monstrous and overwhelming. More importantly, sleuthing/understanding the strategic vision, project objectives, scope, and approach are vital for a quick resolve and positive outcome. To solve this mystery and unmask the web of chaos, there are several steps required.

  1. Streamline the enterprise ERP architectural footprint:  Identify the ERP system(s) that will remain within the overall system architecture going forward regardless of whether the long-term plan is to maintain or phase them out over time.
    1. Short-term:  Implement a financial shared service model on a scalable platform
    2. Long-term:  Target additional systems to be replaced and/or phased out

  1. Outline the business value objectives required to be successful
    1. E.g. Reduce cost and introduce efficiencies, further automation of processes, implement solutions to anchor a central ERP to other legacy ERP products, acting as the core financial system; centralize purchasing, improve customer and vendor experience, etc.  

  1. Understand what is required to configure a scalable platform for financial services:
    1. Chart of accounts, GL balances, AR/AP payments & invoices, bank management, budgeting, security, and financial reporting

  1. Selecting the appropriate financial shared service option that fits your organizational model
    1. Establish the functional roles of the different ERP systems used in the short-term. E.g. the ERP system identified as the financial platform will house financials while the legacy ERP will execute the operational transactions. 
      1. E.g. In an Order to Cash cycle, the financials captured are around collection payments, cash applications, record revenue, etc., while the operations execute the sales order, fulfillment orders, sales invoices. 
      2. E.g. In a Procure to Pay cycle, the financials captured are around receive invoices, process payments, record expenses, etc., while the operations execute the purchase requisitions, generate purchase orders, inbound receipts of products. 

Like all good monster mysteries, there is a certain element of fear and uneasiness when it comes to such a challenge. The financial shared service model is implemented in a shorter interval of time compared to a traditional ERP full blown implementation. This allows your organization to create financial alignment much quicker. By following the steps above and working with seasoned professional, you are no longer running from your fears and uneasiness of a monstrous system consolidation effort. Rather, you are now guiding the single source of financial truth into a direction that ultimately will unmask the unknowns resulting in data driven decisions. Unlike Mystery Incorporated, this model can be replicated so that when new monsters (acquisitions/mergers) come along, the whole process of unwinding the massive web of deceptions is no longer a drawn-out process. And while other companies subject themselves to the traditional full-blown big bang endless implementation mystery, you can say something like, “we would have been living in that same state of confusion they are if it weren’t for the financial shared service approach”. So, get your mystery on, stop wasting your time and get some real work done!  Cheers.      

For more information on understanding if this is the best approach for your company, please contact us at Arbela Technologies. Connect with Arbela: Website | LinkedIn | Twitter | Facebook