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New Era For ERP- The enterprise resource planning (ERP) system has been a staple of corporate finance operations for years, acting as a central repository of data and a hub to initiate a range of processes, from accounting to procurement.
But the ERP of today doesn’t look like it used to. Enterprise cloud migrations have opened up the ability for smaller businesses to adopt ERP technology once reserved for the largest corporates. At the same time, a surge in third-party financial platforms has disrupted the flow of data into the ERP, disbursing information throughout the back office.
As a result, new technologies are needed to unlock data silos and support the ERP’s newfound role as a collaborative portal for corporates, said Wes Gillette, vice president of Product Management at insightsoftware.
“ERP still sits at the heart of modern finance, but we’ve also seen that the monolithic ERP doesn’t work,” he told PYMNTS. “There is a need for solutions that more effectively address specialized requirements.”
The ERP’s Role in a FinTech World
The boom in B2B FinTech has introduced a flurry of new solutions and platforms from which corporates and small businesses can choose. It’s a result, explained Gillette, of the legacy ERP no longer being suited to address the full range of businesses’ diverse financial and process management needs.
He pointed to financial reporting as one example of this shift.
“Native ERP reporting typically isn’t optimized to handle the structure of financial data, or many of the complex requirements like granular data, drill-downs, automated reconciliation and comparative reporting,” he said. “Overall, it’s just not designed to enable the kind of higher-level financial intelligence that CFOs and their peers require today.’
Similar challenges have emerged in the traditional ERP’s ability to meet modern financial planning, cash flow forecasting, and risk analytics needs, he added.
As a result, businesses are turning to best-of-breed platforms designed specifically for these singular capabilities, although this tactic has undoubtedly led to its own set of challenges. One of the largest is in corporates’ struggle to manage the growing number of back-office solutions in place, while managing the pain point of aggregating data across these platforms and consolidating it.