Like most Fintech’s operating the B2B space, at Fennech we are often asked by prospective clients why they should turn to us or any other Fintech for a solution when their well-established ERP platform could be configured to do much more. Whilst its certainly true that SAP and its peers have a wide range of feature functionality, there are sound reasons why they should not be regarded as the solution to every challenge the organisation faces.
Even before the Covid-19 pandemic and its resulting economic shocks, all large corporations were operating in a business environment that was volatile, uncertain, and rapidly changing. To survive and thrive in such conditions, businesses need to be able to quickly adapt and potentially to completely re-engineer their business model. If we look at areas like customer relationship management and business process management, these are well-served with flexible, easy to configure technology solution. The advent of “lo-code” applications means there are technology solutions that are easy to change as sales, marketing, operations, and customer support processes evolve.
However, if we look at finance, and at the intersection of finance and operations in areas typically managed by ERP platforms, there is still a great deal of “heavy lifting” involved in changing processes. This creates something of a vicious circle; the bigger the investment the firm has made into a complex ERP platform, the more they will try to leverage that investment by adding more functions as processes change and evolve. Yet more functions mean more complexity, and more complexity means the cost of change becomes ever greater, which in turn means more investment. ERP packages will continue to play a core role in many organisations, certain key functions can also be quickly implemented at a lower cost in more specialist applications that take standardised data feeds from the core platform.
There is also a range of activities that are key to organisations finance operations but are often not completely covered by the organisations ERP, treasury management, or finance applications. End-to-end payable and receivable processing, cash forecasting, allocation, and reconciliation can all fall into this category. These activities typically need data from ERP, treasury, or finance systems plus banking partners, and as a result are often done outside of these applications, manually, on spreadsheets. This results in cost, risk of error, and a lack of visibility for management; without the right home-working infrastructure, this can also rapidly become unsustainable in a lock-down environment.
With an added urgency to automate these processes, using an agile, configurable application rather than taking the time and expense to integrate yet more feeds into a complex ERP platform makes perfect sense; you can get real efficiency benefits, quickly at relatively low cost.
Written by Rob Lunn