ERP Reporting: A Crucial Element in Implementation

Effective Enterprise Resource Planning (ERP) implementation is not just about getting the system up and running; it’s about laying the groundwork for comprehensive reporting and analytics. In this article, we delve into the critical aspects of early ERP reporting, debunk common excuses for neglecting this phase, and provide a framework for companies to follow during the implementation process.

Establish and Design Reporting Requirements Early:

Having worked in Corporate Performance Management (CPM) and Enterprise Resource Planning (ERP), I strongly recommend that companies think through their reporting early when implementing and selecting their ERP. I realize that requirements will likely change, but you still need an early foundation for your analytics. I would recommend creating a roadmap for metrics — ones you need now, in the next few years, given various growth scenarios. Finance should include stakeholders from other departments to design reports and think through when they will be used. Think beyond basic financial statements early in your journey to avoid a data mess later.

I’ve heard excuses for neglecting early ERP reporting, like:

1?? Let’s get up and running and then figure out reporting as a phase 2. This is shortsighted as figuring out how to integrate data will be a huge pain later. In actuality, figuring out the reporting/metrics early on can help select the right ERP vendor in the first place.

2?? We are growing so fast that requirements will change. This might have been true in the era of zero interest rates and easy vc funding, but now growth has to be planned with attention to the unit metrics. Thinking this through with scenarios will ensure your growth is sustainable, and you don’t end up like another Bird (scooter company).

3?? We already have a BI tool with metrics that executives use. I’ve seen companies have dashboards with marketing/sales use cases, but when implementing a new ERP, executives will want this to tie back to your financial data. Think through how your existing dashboards will be improved by adding financial data. This can be integrated into the dashboards or incorporated into a structured formatted report.

4?? We can always figure it out in Excel later. True, but this is so time-consuming, and as your FP&A team grows, they will all get used to Excel. Going back to a system to ensure you don’t have broken links and countless unproductive hours will be a tough feat.

5?? ERP is crucial and we can figure out reporting, goal setting, and related tasks later because those are complicated. This leads to delays due to overcomplication. It’s better to start with basic Key Performance Indicators (KPIs) that match the company’s goals. Keep it simple and start. Also, choose an ERP that supports these simple reports to keep things moving without waiting.

What happens if we wait?

What often happens is companies push reporting down the road for the above or any other hundred of reasons. Then they realize their point of record system doesn’t support their reports, and they scramble to figure out a data strategy. They end up with different reporting tools, having to manage different User Interfaces. Of course, I’m not saying to expect your ERP to hold all of the data for your reporting; I’m just saying that you need to be super thoughtful about the output when selecting these systems. This will also help evaluate systems that integrate with your existing tech stack or signal a clear necessary change.

Great, now how do I even get started?

Starting your ERP journey goes beyond just setting up the system; it needs careful planning, especially for reporting. Without a clear plan, businesses may face problems later on. Here, are some practical solutions and a framework to help you begin thinking about reporting before or during you ERP implementation:

1. Everyone evaluating a new system should understand which applications you already have in inventory and the data flow. This should be everyone and not just IT. This will ensure you have holistic reports that have data across applications. You will also want to map these existing systems back to your metrics.
2. Decide the set of reports that are necessary with each phase and how you will get them. Will you need a Data Warehouse or ETL resources? If so, how much will that cost?
3. Map out, via diagrams, which systems you will have with your growth and which ones will support your executive metrics.
4. Decide how frequently and for what purpose the reports will be consumed.
5. Eliminate everything that is unnecessary. I would recommend getting a few users/executives to learn the format of an existing report rather than letting them introduce a new one.

Conclusion:

Skipping early ERP reporting can make your data messy down the road. But if companies tackle common excuses and use a smart plan, they can make sure their ERP setup not only works for today but also paves the way for growth. The secret is thinking ahead, working together, and being careful about reporting right from the start.