Cloud-ERP brings collaboration to the modern finance function

14th December 2015

In an era which has seen the rise of the customer-centric organisation the finance function can sometimes seem worryingly out of step. This executive briefing examines the rising challenges facing the modern CFO as they struggle with their legacy ERP systems and how switching to Cloud ERP can offer a more joined up, dependable and productive approach as well as a more fulfilling customer experience. 





In an era which has seen the rise of the customer-centric organisation the finance function can sometimes seem worryingly out of step. Social interaction and communication has become central to the way that we carry out business with our customers on the ‘outside’, but this is rarely matched by collaborative tools and communications on the ‘inside’.  Slick e-commerce on the outside may look appealing but it frequently masks process inefficiency on the inside, denting customer confidence and eroding the customer experience. 

With legacy ERP systems unable to keep up with the pace of change, modern finance functions are increasingly turning to cloud-based ERP to achieve a more joined up, dependable and productive approach as well as a more fulfilling customer experience.

‘Old’ ERP perpetuates functional ‘silos’

The ‘Quote to Cash’ cycle weaves its way through many functional areas, such as sales, service management, order processing, credit control, fulfilment, warehousing and accounting but these often operate as discrete silos unwittingly allowing crucial customer and delivery information to fall between the cracks. 

Operating in functional silos is also very expensive since resources are not shared efficiently across core financial processes.  It encourages unwelcome additions to headcount as organisations seek to meet peak demand by recruiting people and adding to fixed costs which are difficult to shed in the longer term.

More crucially, traditional organisational structures in which skills are arranged by business function, do not reflect how costs are actually incurred in the business. Costs in a business are driven by process activity (e.g. number of sales, customer complaints, volume of goods returned, number of disputed invoices) not by business functions. In fact the cost of managing a disputed invoice is 80 percent higher than a straight-through transaction that is processed accurately first time. And on average most office workers spend 25 percent of their day simply looking for information.  So the economic case of dismantling functional silos perpetuated by old ERP and replacing them with collaborative processes couldn’t be more compelling.  Organisations that do not enable collaboration through the deployment of digital technologies such as cloud ERP, mobile and social leave themselves exposed to the twin challenges of unsustainable levels of overhead and poor productivity.


Collaboration and the customer

Put simply, customer relationships are not amenable to being neatly compartmentalised. In practice they straddle many touchpoints in the organisation and modern finance functions know that the relationship has to be managed carefully from its inception in customer relationship management systems (CRM) through all of the back office functions (invoices, payments, credits, product or service delivery) served by ERP.  Businesses that align their ERP processes around all customer touch points are able to create a unified, informed view of the customer across the entire organization.  But how in practice does a business close the gap between its interactions with customers and its financial processes?


Collaboration and the finance function

Cloud-based ERP systems are transforming the way that finance functions operate by providing a platform which not only anchors finance professionals to core financial processes and each other, but also to customers and other stakeholders. This is achieved through enhanced visibility of the process, shared workflow and communications.


Process visibility:

The accessibility and affordability of cloud ERP technology encourages process visibility through higher levels of user participation.  Personnel at the ‘sharp end’ of the business can be added at a moment’s notice, which is in sharp contrast to traditional on-premise solutions that are rarely scalable on-demand. But modern ERP systems are also built with process visibility in mind, so that for example, the applications are designed around a single shared database, with common data and metadata (products, business units, accounts and cost centres).  This means that information about a transaction is retrievable across the entire process in a consistent way, regardless of where an individual happens to sit in the process chain.


Shared workflow:

Shared workflow helps as well. It transcends functional divides, whilst  elevating process visibility by ensuring that all of the stakeholders in the process are brought into play at the right time and, where exceptions arise, that transactions are quickly escalated.


Embedded social capability and communications:

In modern cloud-ERP systems, social collaboration tools are embedded in the application itself so that conversations are held and updated in context alongside the transactions, customers, or projects to which they relate. This is in stark contrast to traditional ERP systems in which communications are separated from the underlying process, so that personnel engaged in the process have to rely on email, telephone calls and even walking the corridors to get things done.


Cloud-based ERP

Cloud-based ERP, such as FinancialForce ERP, built on the Salesforce1 Platform is a good example of a unified family of cloud solutions which is at the forefront of these changes.  It connects customers, employees, partners and products into a single system, providing everyone with a consistent view of the entire customer journey.

For example, the ‘Quote to Cash’ cycle is supported in a single environment that links CRM with sales order processing, billing and accounting. Provided that they have appropriate security permissions, individuals can reach beyond their strict functional boundaries to look at the progress of a transaction in any part of the cycle – literally from quote to cash.

It means that where a sales transaction is complex or disputed and requires human intervention that individuals in the organisation can review what is happening, get a complete history of what has happened and quickly move things along.  Furthermore, instant communications, such as, Salesforce’s “Chatter” that are embedded in the transaction allow contextually relevant conversations and decisions to be tracked alongside transactions, accounts, reports or other objects.  This embedded capability provides a far superior capability over email communications whose context may be ‘lost’ in a variety of email threads that have been fired off in different directions and may have been started at different times. Chatter brings cross-functional communications together in one area, for example, a report, a customer or a specific transaction allowing quicker and better informed decision making. And all of this is deliverable over a number of different devices, such as, browser, tablet or smartphone.

It means that anyone in an organization can follow any customer interaction and use the insights gained to enhance their knowledge about the customer, its buying habits and preferences.  By leveraging this more comprehensive view of customer behaviour organizations can improve their competitiveness and ability to anticipate the customer’s likely reaction to special promotions, new product introductions and pricing changes. 



Human beings are gregarious by nature but many core financial processes fail to play to this obvious strength. But savvy finance professionals are beginning to recognize that collaboration holds the key to success and now rank investment in collaborative technologies number two in their list of technology priorities1 (just behind analytics).  The introduction of cloud-based ERP has been transformational.  In a world where near-real-time communication has become the ‘norm’ social collaborative tools seem the logical next step for the finance function as organisations seek to eliminate functional and geographic barriers to communications.

However, these collaborative tools are not a panacea in themselves.  In order to realize their true potential organizations need to be ready to embrace a new culture of collaboration.  Gartner, the analyst, points to the concept of ‘extreme collaboration’, a 24/7 environment in which emails are replaced by social tools and where people are willing to cross geographic, organisational, political, management boundaries, to pool their collective skills and resources to solve problems and move toward the attainment of a shared, ambitious goal.

It is clear that traditional on-premise ERP systems cannot keep pace with the level of innovation being introduced by cloud vendors.  Early signs are that it is not feasible to reengineer quickly enough systems that were developed more than two decades ago. As we enter a new era, in which collaboration is the key to unlocking productivity gains it is cloud-ERP solutions that are gaining the upper hand.

If you would like to learn more about the future of the finance function please visit our community hub where you can find out more on how the CFO is rising to the challenges of the modern finance function 


About the Author

Gary Simon, is Leader of the FSN Modern Finance Forum on Linkedin with more than 43,000 members.  He is a graduate of London University, a Fellow of the Institute of Chartered Accountants in England and Wales and a Fellow of the British Computer Society with more than 30 years’ experience of implementing management and financial reporting systems. He is the author of four books, many product reviews and whitepapers and as a leading authority on the financial systems market is a popular and independent speaker on market developments.  Formerly a partner in Deloitte for more than 16 years, he has led some of the most complex information management assignments for global enterprises in the private and public sector. 






Note1  Ventana, “Business Technology Innovation Benchmark Research”, May 2013









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