Few finance professionals would deny that information technology is vital to executing strategy and delivering value.

Often regarded as the “operational backbone”, reliance upon hardware, software, and networks is second nature in the modern business environment.

But while selecting the right solution is essential, successful return on investment (ROI) is as much about implementation as the technology itself.

There’s no denying that getting it wrong can lead to disastrous consequences. The past few years have been littered with costly implementation casualties, not least Goodyear Tire and Rubber, which in 2003 was forced to restate its earnings dating back to 1998 because of ERP implementation errors.

In 2000, Hewlett Packard was embarrassingly exposed to an earning shortfall, which it had failed to identify thanks to problems with its new finance system.

Much research has been done on identifying the causes of IT project delivery failure. According to a study by CFO Research Services exploring executives’ views on the business risks posed by systems implementation, poor performance when selecting implementation partners, rolling out the technology, managing process change and measuring results were common factors.

The report also concluded that risk analysis was often too focused on operating performance and technical failure rather than cost overruns and regulatory compliance. More worrying, the majority of respondents said they afforded less risk scrutiny to IT projects than to other major investments.

Given the risks involved it’s hardly surprising that only a minority of companies are keen to adopt cutting-edge technology. But migrating to new finance systems or upgrading doesn’t have to be a nightmare. It’s a question of best practice.

Customers need to understand what the upgrade process is, what risks are involved and what support they need. For example, when choosing a system, it’s useful to look at how many times customers have upgraded to the latest version. If it’s infrequent – or if many users are still stuck on old versions - it could be that the upgrade process is too hard. Confidence, preparation, and the setting of clearly identified and achievable objectives are vital to successful implementation.

Companies need to be sure they can carry data forward with the next version but with the advantage of improved functionality. It’s also advisable to run a pilot project to help eliminate any resistance within IT and instil confidence. It’s often said that some IT professionals feel their jobs could be threatened by new technology, but at the end of the day coping with ageing systems is a false economy. That said the decision has to be made for the right reasons.

When University Physicians Inc (UPI) opted to upgrade its accounting system it was a decision not taken lightly.

Not only was the Colorado-based not-for-profit’s legacy system “solid and stable”, the prospect of moving from a proprietary platform to a PC server-based system was one that made chief financial officer Nancy Foster “a little nervous”.

“It was the idea of going from one machine to three or four,” she admits.

“We’d first implemented the Open VMS system in 1995 and in all that time there had only ever been a few glitches. However, we recognized the need to move to a Microsoft Windows based system to improve both our efficiency and reporting, which is why we started looking at web-based systems.

“We chose CODA not only because we had been using them for the last 10 years and have an excellent relationship with them but because its ‘e’-suite of products met our needs.”

The multi-speciality group practice of faculty physicians and ancillary health care providers at the University of Colorado School of Medicine provides management services to approximately 1,200 members including billing and collecting.

Founded in 1983, UPI profits help ensure that the University of Colorado School of Medicine is able to recruit and retain the country’s top physicians and researchers. As a result, faculty physicians and researchers at the University of Colorado School of Medicine have earned University of Colorado Hospital and The Children’s Hospital in Denver national reputations as research hospitals.

According to Foster, implementing e-Finance, e-Assets and CODA-XL, along with e-Procurement, e-Invoice Matching and Workflow, will significantly help improve organizational efficiency and effectiveness. The organization, which employs around 600 staff, performs monthly cash-based reporting and must also report on an accrual basis every quarter for tax and GAAP purposes.

“Not only does the University of Colorado operate a separate accounting system, but the people who need the information are located throughout the medical school campus,” she says.

“Using a web-based reporting system means the University School of Medicine departments do not have to wait weeks for us to deliver the information as they can access real-time data immediately, offering an exceptional service.”

Even though as a non-profit organization UPI is not required to adhere to tough regulatory requirements such as Sarbanes-Oxley it still operates in an increasingly complex regulatory environment due to the affiliation with the University of Colorado. Good governance, accountability and auditability therefore remain paramount.

“This is where CODA’s e-Finance and Workflow products will help,” says Foster.

“With 50 users accessing the system, it’s good to know that CODA security enables us to ensure that departments are only able to view their own financial data.”

But although the decision to upgrade is delivering significant benefits, UPI’s CFO is quick to point out a number of critical success factors essential to the project.

“IT must be comfortable with the technology involved before making the decision to proceed. Back in 2001, we’d started a small business intelligence project, which had given them such an opportunity. Lessons learned during that implementation were key to us making this decision.”

She also stresses that organizations should be clear in their objectives – and spend time defining them at the onset of the project.

“Coming from such a stable platform, we wanted to ensure that the upgrade not only offered the same functionality but also additional functionality and user enabled customization.”

As well as knowing what it wants from the new system and understanding the technology, UPI has an ambitious implementation timetable and plan. Key to achieving this is a good relationship with the vendor – and the on-site consultant.

“We have a team of three leading the project along with the CODA consultant,” says Foster.

“It’s very important to have a solid relationship with the vendor, as it gives you greater confidence.”

With phase one of the implementation set for completion in July 2007, Foster is confident that not only will the tight deadline be achieved, but that the migration will have experienced as few problems as possible.

“We are only half way at the moment, but are happy with how things are going,” she concludes.

Clearly identified objectives, strong leadership and change management are paramount to successful implementation. All too often people don’t utilize their systems because they aren’t aware of what it can do. This is why pilot projects are so useful before committing time and money to a lengthy implementation. Customers also need to understand how they can achieve greater effectiveness and efficiency in their organization as a result of any new technology.

Better efficiency and effectiveness through the implementation of new technologies are not limited to commercial organizations operating in complex regulatory environments. More and more non-profit organizations, or companies not affected by the rigours of Sarbanes-Oxley are now seeking to achieve better process control through automation.

Accountability and good governance are essential for charities and non-profit organizations. Reputation is everything. With so much at stake, it’s easy to understand why firms are reluctant to upgrade or implement new software. But the adoption of the following best practice principles, if followed, could significantly reduce risks and minimize potential project issues.

When implementing finance systems then ideally the finance department should lead the project with support from IT - not the other way around. If possible at least two senior finance professionals should be tasked with heading the implementation. Realistic predictions of how much time project leaders will need to devote to the project should also be made.

Set clear, measurable milestones that are agreed with all the business stakeholders. Ideally try to deliver some benefit with each milestone, so that users see visible progress with each stage, and can buy into the process.

When prioritizing implementation it’s important to consider core business requirements and how they will be affected by the project timeline.

Focus rigorously on potential business risk taking into consideration misalignment with business needs, project governance, regulatory compliance and enterprise-wide issues.

Establish what the system should look like and what functionality should be retained from previous systems if migrating. Ensure that the vendor is involved in this stage, so that you understand what is possible from the new system – you may discover that you can do things you didn’t know were possible, or do them in a different way from previously.

Training needs of those leading the project and also of the users should be identified before roll-out. Good change management is vital to the success of any implementation and is crucial to achieving overall objectives. This requires strong leadership, communication, and HR involvement as well as training. Poor change management is often the root cause of project failure.

Ensure that the project team has the time to focus on the systems project. Get back up or temporary replacements for them, so that they aren’t just doing the implementation in their spare time. No matter how good the system or third party consultants, only your staff can really ensure the project achieves what it set out to do.

A pilot project not only enables testing of a new system, but encourages assessment of unfamiliar processes that may have been devised. Test rigorously against the existing system and look for ways of improvement while doing this.

Don’t forget to publicize any successes. IT projects are never easy and will encounter problems. It is important to realize that at any point during project implementation there could be major issues, and it is all too easy for bad news and rumors to spread around the organization. If employees hear that the project is ‘a disaster’ then it can quickly become ruined for good, making the task of selling the system to users and getting their buy in later on, very hard indeed. So trumpet any triumphs and be clear about issues that have arisen and how they are going to be overcome. That way rumors have less chance of spreading. The vendor will often help with this, since it’s in their interest for the project to be delivered successfully.

Ensuring Success
A key to success in implementing a new finance system is to follow a standard, proven implementation methodology, such as CODA-Plus (see diagram). These will take you step-by-step through the process, ensuring that you gain consensus and buy-in to the original requirements definition and design; appropriate knowledge transfer to the right people in your organization; piloting of the system to ensure it meets requirements, along with any specific development such as integrations into other systems; rigorous system testing; and then the final move towards ‘go-live’ for the system. In parallel, user training should take place, timed to ensure that their knowledge is current and appropriate for their requirements, as they start to use the system.



Figure 1: A proven implementation methodology like CODA-Plus will help guarantee a successful project.