How Does Enterprise Costing with ImpactECS Enhance Your ERP System – Part 3
In the first two installments this blog series, we covered two critical areas for cost management – rate building and data management. In this blog, we’re shifting away from calculating and collecting data to focus on the cool things you can do once you’ve established an enterprise costing process. At the top of our list – creating an independent simulation environment.
How can I see into the future?
A topic that comes up with every conversation we have with costing pros is the importance of forward-looking analysis. It’d be great if you could just ask a magic 8 ball about the future, but you’d probably be out of a job pretty quickly. And what we know from years of experience connecting with ERP systems of all shapes and sizes is that it’s quite difficult (…we’d go so far as to say impossible unless you have unlimited time and money) to create a scenario analysis environment within an ERP cost module. And since you’re ERP system is likely the system of record for your organization, it’s generally not a good idea to monkey around with the data that’s stored there anyway. So these costing folks often turn to their next available option – building a spreadsheet to model future events.
Spreadsheets are NOT an option!
While it’s the next available option, it’s usually not the best option. If you’re a cost accountant, then you probably know why – but allow me to list a few of the reasons for those who may not be aware:
> First and foremost, the logic, calculations and assumptions used in the spreadsheet are almost always different from those in your official costing system.
> Second, you’re spreadsheet is either not connected or has a limited view of the actual data used in calculating costs.
> Third, if you have a large product catalog with lots of data inputs, processing the calculations can take a significant amount of time.
> Fourth, it’s easy to break a spreadsheet by accidentally changing a formula or tying a value into the wrong cell.
We can probably come up with ten more reasons why it’s not the best option, but you get the idea.
So, what is the best option? It’s no surprise if you’ve been reading this series, but using an enterprise cost system like ImpactECS gives you the ability to create an independent simulation environment that looks exactly like your official cost system. And no, it doesn’t require building a completely separate system!
On the ImpactECS platform, you can replicate any model in the sandbox and it will include all of the logic, calculations, assumptions, data connections, and security. This powerful capability allows you to run apples-to-apples comparisons on any data element included in your cost model. With an integrated planning and anaylsis process, you will finally have a place to analyze any future event with a great level of accuracy, giving you the confidence you need to make informed business decisions.