You are previewing IT Best Practices for Financial Managers.
O'Reilly logo
IT Best Practices for Financial Managers

Book Description

Praise for IT Best Practices

"The work of the financial manager revolves around a company's financial systems. Ms. Roehl-Anderson's latest offering addresses the two key aspects of these systems—how to buy and install them. The book covers every conceivable aspect of these systems, including ERP, software as a service, shared services, and supporting controls. As a bonus, the book contains substantial coverage of information technology considerations in an acquisition. This is a definitive desk reference." —Steve Bragg, CFO, XeDAR Corporation, and author of Accounting Best Practices

"Sage advice from one of the most adept project managers in the industry! Jan and team have delivered a practical, yet comprehensive guidebook for software selection, implementation, rollout, and ongoing updates. This guidebook will become a valuable reference for every financial manager and IT project manager undertaking ERP implementation."—Valerie Borthwick, former senior vice president, Oracle Consulting

"Written by one of the best in the IT business, this book is a must-read for all CFOs and controllers. In one volume, it addresses everything a financial executive needs to know about IT and its impact on the financial function, while also featuring practical guidelines, current hot topics, and IT best practices. This book covers it all."—Jo Marie Dancik, Regional Managing Partner (Retired), Ernst & Young

Table of Contents

  1. Copyright
  2. Preface
  3. Acknowledgments
  4. About the Contributors
  5. I. The Basics
    1. 1. The Information Technology Planning Process
      1. 1.1. Finance and Information Systems
      2. 1.2. Information Technology Planning Process
        1. 1.2.1. Developing an Information Technology Plan
        2. 1.2.2. Components of an Information Technology Plan
          1. 1.2.2.1. BUSINESS PROCESS REVIEW
          2. 1.2.2.2. SYSTEMS AND ARCHITECTURE REVIEW
          3. 1.2.2.3. FUTURE-STATE ROADMAP
      3. 1.3. The Role of Finance in the Systems Planning Process
      4. 1.4. Conclusion
    2. 2. ERP Software Selection
      1. 2.1. Project Preparation, Scope Definition, and Approach
      2. 2.2. Vendor Candidate Identification and Short-Listing
      3. 2.3. Request for Information/Request for Proposal Analysis, Vendor Demonstrations, and References
      4. 2.4. Preliminary Vendor Recommendation and Negotiations
      5. 2.5. Final Vendor Decision and Procurement
      6. 2.6. Conclusion
    3. 3. The Software Implementation Process
      1. 3.1. Key Implementation Concepts
      2. 3.2. The Implementation Phases in Detail
        1. 3.2.1. The Scoping and Planning Phase
        2. 3.2.2. The Design Phase
        3. 3.2.3. The Build Phase
        4. 3.2.4. The Testing Phase
        5. 3.2.5. The Deployment Phase
      3. 3.3. Common Risks and Mitigation Strategies
      4. 3.4. Areas that Require Special Attention from the CFO
      5. 3.5. Conclusion
    4. 4. Critical Success Factors for IT Implementations
      1. 4.1. Provide Effective Sponsorship
      2. 4.2. Select a Dedicated and Experienced Project Team
      3. 4.3. Establish Project Infrastructure
      4. 4.4. Utilize a Well-Established Approach
      5. 4.5. Address People Issues
      6. 4.6. Communicate
      7. 4.7. Manage Scope
      8. 4.8. Establish a Supportive Culture
      9. 4.9. Conduct Periodic Quality Assurance Reviews
      10. 4.10. Provide a Stable Technical Environment
      11. 4.11. Conclusion
    5. 5. Steering Clear of a "Crisis in Confidence" and Other People Pitfalls
      1. 5.1. Phase 1: Before the Project
        1. 5.1.1. Focus Area: Project Team Effectiveness
          1. 5.1.1.1. TASK: ASSEMBLE TEAM
        2. 5.1.2. Focus Area: Leadership Engagement
          1. 5.1.2.1. TASK: PREPARE EXECUTIVES AND LEADERS
        3. 5.1.3. Focus Area: Stakeholder Management
          1. 5.1.3.1. TASK: DEFINE SUCCESS
          2. 5.1.3.2. EXAMPLE: "INDEPENDENCE FROM THE OLD WAYS"
        4. 5.1.4. Focus Area: Training
          1. 5.1.4.1. TASK: UNDERSTAND YOUR CRITICAL AUDIENCE GROUPS
        5. 5.1.5. Focus Area: Workforce Transition and Adoption
          1. 5.1.5.1. TASK: UNDERSTAND RISK AREAS
        6. 5.1.6. Recap: What to Do Before a Project Begins
      2. 5.2. Phase 2: During the Project
        1. 5.2.1. Focus Area: Project Team Effectiveness
          1. 5.2.1.1. TASK: MOTIVATE TEAM
        2. 5.2.2. Focus Area: Leadership Engagement
          1. 5.2.2.1. TASK: SUPPORT EXECUTIVES AND LEADERS
        3. 5.2.3. Focus Area: Stakeholder Management
          1. 5.2.3.1. TASK: COMMUNICATE
        4. 5.2.4. Focus Area: Training
          1. 5.2.4.1. TASK: DELIVER TRAINING
        5. 5.2.5. Focus Area: Workforce Transition and Adoption
          1. 5.2.5.1. TASK: MODIFY ORGANIZATION, POLICIES, AND OPERATIONAL MODEL
        6. 5.2.6. Recap: What to Do During a Project
      3. 5.3. Phase 3: After the Project
        1. 5.3.1. Focus Area: Project Team Effectiveness
          1. 5.3.1.1. TASK: RECOGNIZE TEAM
        2. 5.3.2. Focus Area: Leadership Engagement
          1. 5.3.2.1. TASK: SUPPORT EXECUTIVES AND LEADERS
        3. 5.3.3. Focus Area: Stakeholder Management
          1. 5.3.3.1. TASK: COMMUNICATE
        4. 5.3.4. Focus Area: Training
          1. 5.3.4.1. TASK: DELIVER ADDITIONAL TRAINING
          2. 5.3.4.2. EXAMPLE: POST–GO-LIVE ON-THE-JOB TRAINING
        5. 5.3.5. Focus Area: Workforce Transition and Adoption
          1. 5.3.5.1. TASK: TRACK BENEFITS
        6. 5.3.6. Recap: What to Do after a Project
      4. 5.4. Conclusion
    6. 6. Objectives and Scope of Implementing Automated Financial Systems
      1. 6.1. Objectives
        1. 6.1.1. Changes to Financial Processes and Financial Strategies
        2. 6.1.2. Inefficient Processes
        3. 6.1.3. Redesign, Readdress, and Streamline Processes
        4. 6.1.4. Scalability
        5. 6.1.5. Accounting Principles, Statutory Requirements, and Governance
          1. 6.1.5.1. GLOBAL ACCOUNTING POLICIES AND GOVERNANCE
          2. 6.1.5.2. MANAGING ACCOUNTING CONTROLS
          3. 6.1.5.3. REVIEW SECURITY AND PRIVACY
          4. 6.1.5.4. ACCOUNTING POLICIES AND STATUTORY REQUIREMENTS CHANGES
        6. 6.1.6. Technical Strategies
          1. 6.1.6.1. END-OF-LIFE OR UNSUPPORTED FINANCIAL SOFTWARE
          2. 6.1.6.2. CONSOLIDATION OF SYSTEMS (ERP)
        7. 6.1.7. Master Data Management
      2. 6.2. Core (First-Tier) Applications
        1. 6.2.1. General Ledger
        2. 6.2.2. Accounts Payable
        3. 6.2.3. Accounts Receivable
        4. 6.2.4. Fixed Assets
        5. 6.2.5. Financial Reporting
      3. 6.3. Second-Tier Applications
        1. 6.3.1. Cash Management
        2. 6.3.2. Travel and Expense
        3. 6.3.3. Planning, Budgeting, and Forecasting
        4. 6.3.4. Credit and Collections
        5. 6.3.5. Tax
        6. 6.3.6. Payroll
        7. 6.3.7. System Controls
      4. 6.4. Third-Tier Applications and Beyond
        1. 6.4.1. Project Accounting
        2. 6.4.2. Treasury
      5. 6.5. Conclusion
  6. II. IT Hot Topics
    1. 7. Shared Services and Financial Systems
      1. 7.1. Creating Value through Financial Systems–Enabled Shared Services
      2. 7.2. Financial Systems as a Foundation for Shared Services Benefits Realization
      3. 7.3. SSC and Financial Systems Implementation Considerations
      4. 7.4. Financial Executive's Role in Shared Services Implementations
        1. 7.4.1. Making Change Stick
        2. 7.4.2. Setting the Tone
      5. 7.5. Conclusion
    2. 8. Globalization Trends in Offshore Information Technology
      1. 8.1. How Is Global IT Different from Offshore IT?
      2. 8.2. How Globalization of Business Has Influenced Global IT
      3. 8.3. How Pervasive IT Influenced Global IT
      4. 8.4. How Global IT Continues to Drive Changes in Globalized Business
      5. 8.5. Conclusion
    3. 9. Security, Controls, and Privacy
      1. 9.1. Impact of Sarbanes-Oxley on Financial Systems Implementations
      2. 9.2. Financial Executive's Role in the Security, Controls, and Privacy Area
      3. 9.3. Security, Control, and Privacy Safeguard Design
      4. 9.4. Controls Automation
      5. 9.5. Ways to Test Controls
      6. 9.6. Conclusion
    4. 10. What Is IFRS and Why Is It Relevant to the CFO Now?
      1. 10.1. History and Specifics of IFRS
      2. 10.2. Some Key Differences between IFRS and U.S. GAAP
      3. 10.3. Potential Benefits of Reporting under IFRS
      4. 10.4. Potential Costs or Cons of Reporting under IFRS
      5. 10.5. The Decision to Move to IFRS
      6. 10.6. IFRS Conversion Project Approach
        1. 10.6.1. Phase 1: Assessment
          1. 10.6.1.1. ASSESS TECHNICAL ACCOUNTING IMPACTS
          2. 10.6.1.2. ASSESS TAX IMPACTS
          3. 10.6.1.3. ASSESS SUPPORTING PROCESSES, SYSTEMS, AND INFRASTRUCTURE
          4. 10.6.1.4. ASSESS ORGANIZATIONAL CHANGE IMPACTS
          5. 10.6.1.5. DEVELOP IFRS ROADMAP
            1. 10.6.1.5.1. Prepare the Business Case
            2. 10.6.1.5.2. Develop the Transition Approach
            3. 10.6.1.5.3. Develop a Timeline to Support a Strategic IFRS Implementation Plan
            4. 10.6.1.5.4. Form a Multidisciplinary Project Team
          6. 10.6.1.6. DESIGN IFRS FUTURE-STATE ENVIRONMENT
          7. 10.6.1.7. DEVELOP CHANGE MANAGEMENT PROGRAM
        2. 10.6.2. Phase 2: Conversion
          1. 10.6.2.1. DUAL-REPORTING SOLUTION OVERVIEW
            1. 10.6.2.1.1. General Ledger
            2. 10.6.2.1.2. Consolidation Ledger
        3. 10.6.3. Phase 3: Sustain
      7. 10.7. Conclusion
      8. 10.8. Notes
    5. 11. The Phenomenon of Software as a Service
      1. 11.1. Background: What Is SaaS?
      2. 11.2. The Value Proposition of SaaS
      3. 11.3. Making the Right Decision: Is SaaS Right for Me?
      4. 11.4. Implications for IT Organizations
      5. 11.5. Conclusion
    6. 12. Investing in Product Information Management
      1. 12.1. Overview
      2. 12.2. PIM Adaptation Catalysts
      3. 12.3. PIM Implementation Considerations
      4. 12.4. PIM Return on Investment
      5. 12.5. Conclusion
      6. 12.6. Note
    7. 13. E-Commerce
      1. 13.1. E-Commerce Defined
      2. 13.2. E-Commerce Today
      3. 13.3. Increasing Shareholder Value
        1. 13.3.1. Value Driver 1: Revenue Growth
        2. 13.3.2. Value Driver 2: Cost Reduction
      4. 13.4. Justifying the Investment
        1. 13.4.1. Step 1: Determine the Financial Goals
        2. 13.4.2. Step 2: Develop the Business Case Hypothesis
        3. 13.4.3. Step 3: Gather the Right Data Points
        4. 13.4.4. Step 4: Calculate the Benefits
        5. 13.4.5. Step 5: Measure Results
      5. 13.5. Implementing Financial Controls for E-Commerce
      6. 13.6. Conclusion
    8. 14. ERP: An Evolving Process
      1. 14.1. Getting Started
      2. 14.2. You Have Identified the Problem; Now You Need to Define the Solution
      3. 14.3. Conclusion
  7. III. Mergers, Acquisitions, Divestitures, and IT
    1. 15. Key IT-Related Questions Every Financial Executive Should Consider during a Merger, Acquisition, or Divestiture
      1. 15.1. Before a Transaction Is Identified
      2. 15.2. After a Transaction Is Identified
      3. 15.3. Conclusion
      4. 15.4. Notes
    2. 16. The Importance of IT Due Diligence during a Merger or Acquisition
      1. 16.1. Why Bother with IT Due Diligence?
      2. 16.2. Role of the Chief Information Officer
      3. 16.3. Looking under the Hood: Your IT Due Diligence Checklist
      4. 16.4. How to Get the Data
      5. 16.5. Beyond Cost Reduction: Identifying IT Synergies
      6. 16.6. Accelerating Merger Integration Planning through Due Diligence
      7. 16.7. Due Diligence after the Close
      8. 16.8. Conclusion
    3. 17. Ways to Enhance IT-Related Synergy Capture during a Merger, Acquisition, or Divestiture
      1. 17.1. Sources of IT Synergies
        1. 17.1.1. IT Operating Model
        2. 17.1.2. IT Organization Structure
        3. 17.1.3. IT Application Portfolio
        4. 17.1.4. IT Infrastructure
      2. 17.2. Benchmarks to Establish IT Synergy Targets
      3. 17.3. Begin Early and Build Momentum
        1. 17.3.1. Target Screening
        2. 17.3.2. Due Diligence
        3. 17.3.3. Pre-Close Planning
        4. 17.3.4. Post-Close Synergy Capture
      4. 17.4. Conclusion
    4. 18. Ways to Reduce IT-Related Costs during a Merger, Acquisition, or Divestiture
      1. 18.1. Approach
        1. 18.1.1. Transaction Categories
          1. 18.1.1.1. MERGERS AND ACQUISITIONS
          2. 18.1.1.2. DIVESTITURES
        2. 18.1.2. IT Cost Reduction Levers
        3. 18.1.3. Transactional IT Cost Reduction Roadmap
      2. 18.2. Cost Reduction during Merger or Acquisition
        1. 18.2.1. IT Operating Model: Demand Side
          1. 18.2.1.1. SERVICE ALLOCATION MODEL
          2. 18.2.1.2. ADJUST/REDUCE SERVICE LEVELS
          3. 18.2.1.3. CONSIDERATIONS BY DEAL TYPE
        2. 18.2.2. IT Operating Model: Supply Side
          1. 18.2.2.1. OUTSOURCE/EXPAND SHARED SERVICES ORGANIZATION (SERVICE MODEL)
          2. 18.2.2.2. MANAGEMENT MODEL
          3. 18.2.2.3. CONSIDERATIONS BY DEAL TYPE
        3. 18.2.3. Application Services
          1. 18.2.3.1. RATIONALIZE APPLICATION PORTFOLIO
          2. 18.2.3.2. CONSOLIDATE/CENTRALIZE RESOURCES
          3. 18.2.3.3. UPGRADE ARCHITECTURE STANDARDS
          4. 18.2.3.4. CONSIDERATIONS BY DEAL TYPE
        4. 18.2.4. Infrastructure and End-User Services
          1. 18.2.4.1. CONSOLIDATE DATA CENTERS
          2. 18.2.4.2. RATIONALIZE DUPLICATIVE FUNCTIONS
          3. 18.2.4.3. ADOPT/EXPAND NEW TECHNOLOGIES
          4. 18.2.4.4. CONSIDERATIONS BY DEAL TYPE
        5. 18.2.5. Third-Party Contracts
          1. 18.2.5.1. RATIONALIZE VENDOR BASE
          2. 18.2.5.2. RENEGOTIATE VENDOR RATES
          3. 18.2.5.3. OPTIMIZE LICENSING
          4. 18.2.5.4. CONSIDERATIONS BY DEAL TYPE
      3. 18.3. Cost Reduction during Divesture
        1. 18.3.1.
          1. 18.3.1.1. REDUCING PARENT'S IT COST BASE
          2. 18.3.1.2. NEGOTIATING AND EXECUTING EFFECTIVE TSAS
      4. 18.4. Conclusion
    5. 19. Effective Approaches for Managing IT during a Merger, Acquisition, or Divestiture
      1. 19.1. New Terminology
      2. 19.2. Faster Pace
      3. 19.3. New Challenges for IT
        1. 19.3.1. Adjusting the IT Operating Model
        2. 19.3.2. Achieving IT Synergies
        3. 19.3.3. Developing MA&D Capabilities
        4. 19.3.4. Managing the IT Employee Experience
        5. 19.3.5. Minimizing TSAs
        6. 19.3.6. Readiness for Day 1
      4. 19.4. Conclusion
    6. 20. Ways to Use Mergers, Acquisitions, or Divestitures toBuild Sustainable Information Technology Value
      1. 20.1. Conclusion
    7. 21. Time-Tested Approaches to Maintaining Data Integrity during a Merger, Acquisition, or Divestiture
      1. 21.1. Potential Impacts of Poor-Quality Data
        1. 21.1.1. Missed Timelines = Missed Planned Benefits
        2. 21.1.2. Introduction of Data Integrity Problems
      2. 21.2. Time-Tested Approaches to Help Maintain the Integrity of the Data
        1. 21.2.1. Execute an Assessment of Critical Data
        2. 21.2.2. Establish a Repeatable Data Integration or Separation Process for Key Data Domains
        3. 21.2.3. Maintain Control of the Data
      3. 21.3. Conclusion
  8. Glossary
  9. About the Author