Unifying Finance Systems: The Transformative Power of iPaaS Solutions

The Role of iPaaS Solutions in Finance Functions

Finance functions always rely on various financial systems, and the number of these systems is growing over time. Many companies are trying to unify and simplify the multitude of finance systems involved in their operations.

For instance, if you are implementing a corporate card solution to manage card spending, this solution would connect with your ERP/accounting system so that information is synced both ways. For example, card transactions would be synced to the ERP/accounting solution as bills and bill payments whenever transactions occur. In this case, it is a native integration between two systems and is managed by the provider of the card spending solution.

The same goes for HRIS systems; you typically have a simple integration to sync employee data with the ERP system. This also applies to integrations between ERP and data warehouses (DW), payroll, taxes, bespoke, and other systems.

Most native integrations are built with minimum functionality and aim to be generalized across all customers. From a SaaS product development point of view, it is almost impossible to meet the particular requirements of each customer, meaning you need to use what is provided to you.

So now we have a landscape of finance systems—some of them are connected with each other, and some are not. Then, we have processes from another dimension of that finance function “cube.” There are different types of processes; for the context of this article, we can split them into two buckets:

1. Processes that can be executed within one system.
2. Processes that need to be executed across multiple systems.

When a process needs to be executed across more than one system, we must review the connections and data flows between the involved systems. For example, a reimbursement request can be placed and processed in one system, but then the information about that reimbursement should appear in the ERP/accounting system. In that case, you have one process and two systems involved. If those two systems have a connection with each other, then the processing time and data accuracy would be in good shape. However, if there are no connections, it would impact both processing time and data accuracy and, as a result, affect financial reports.

What can the Finance Function do in that case? They typically don’t have technical software engineers on their teams. Potentially, they can access other departments that can help them establish integrations, connections, or automation—though this is more common in technology and software companies; for others, such an option may not be available. The Finance Function can also seek help from outsourced companies.

In general, there are three options for Finance Functions to overcome connectivity issues between finance systems:

1. Help from internal teams (e.g., product teams and software engineers).
2. Help from outsourced companies (e.g., EPAM, Accenture, etc.).
3. Use iPaaS solutions. For automation purposes, there are different technologies like RPA, but in this article, we focus on connections, integrations, and programmatic data flow between systems that require the usage of APIs, so we will focus on iPaaS solutions only.

So, what is iPaaS from the Finance Function point of view?

“It is a system that can connect your ERP with HRIS, ERP with CRM, ERP with communication tools, ERP with MRP, and any other systems you can think of to streamline data flow and reduce manual work for employees.”

What is the most significant value of the iPaaS solution for the company?

“An iPaaS solution can become a ‘sun’ in your Finance Function galaxy. It unites all the systems and data flows in one place, providing 100% transparency, audit logs, security controls, and much more.”

Imagine your Finance Function where all your finance systems and tools are connected and interconnected, and that connection is clear, transparent, and reliable. This is what iPaaS offers.

Indeed, the Finance Function would need someone to help implement and maintain the iPaaS solutions. That person would need to understand APIs and business logic and have the mindset of a finance function employee but with engineering skills.

What is the benefit between using iPaaS and an outsourced partner who can build a custom integration?

The differences lie in many dimensions:

• Time to Value: With iPaaS, it’s 10x or 20x faster than a custom-made solution.
• Security: iPaaS solutions are aligned with all modern security policies and regulations (e.g., SOC, ISO), while custom solutions sometimes lack these features.
• Transparency: Custom code needs a UI so that any Finance team member can review transactions within the code, which is, in most cases, impossible with custom solutions.
• Scalability: iPaaS solutions are built to support the smallest and largest companies in the world, accommodating their varying requirements, whereas custom solutions don’t always consider scalability.
• Adaptability: The Finance Function is dynamic, and processes and systems can change over time. With custom-made integrations, changes often require new code, which takes time and money.
• Maintenance: Maintenance efforts for custom code are very high compared to iPaaS solutions.
• UI/UX: iPaaS platforms are designed to be used by non-technical people, so an AP clerk can learn and start using it for automation, which is almost impossible with custom-made solutions.

There are more dimensions, but let’s stop here.

Whenever you think about automation in your Finance Function, please consider reviewing the available iPaaS tools on the market and their capabilities. This would greatly help finance teams to be more efficient.