Here's where the problem begins: Management tends to assign the task of finding new accounting software to the person who seems most qualified to handle this complex project -- regardless of their background. If someone has the time and knows more than other managers, that's usually enough to put them in charge. Unfortunately, these de facto 'software experts' often know very little about the software selection process. This puts the company at risk and sets up one of their most important projects for failure!
To be upfront, accounting software failure is never the fault of the software. Most of the systems on the market today can accomplish basic common objectives. A problem arises when a company buys a particular accounting software system without really understanding what it can and, more importantly, cannot do.
The question is: Why would otherwise intelligent and capable executives allow this to happen? Here are several reasons:
* The person(s) in charge of the evaluation/selection process doesn't have the needed experience and doesn't know what to look for * The company buys the salesman rather than the software * A company's needs are not understood in great enough detail * It's not understood how to do proper due diligence on product capabilities * Corners are cut due to time and/or resource limitations
But the one, all-encompassing reason that accounting software selection fails is that the people in charge don't know what they don't know!
The Essential Software Selection Steps
But your software initiative doesn't need to fail. Here are four essential steps to help ensure success. (If any of these steps is skipped, the risk of failure increases dramatically.)
1. The Software Champion. Identify a capable person to head the project. Make sure this person has experience evaluating accounting software and the necessary management support behind him. He must know the company operations, have some IT skills and have good management skills. If this person doesn't exist within your organization, get outside help.
2. Process Mapping. Get the entire operations staff to sit down and map out all discrete phases of their operation. Include how data is collected, all sequential processing steps/decision points, the required information to be collected and what reports are needed. It is essential to identify all inter-departmental transactions, along with current bottlenecks and challenges. Your end goal is to look for ways to improve workflow so that data is captured and moved through the system in a way that maximizes available resources. Digging into these details before you start looking for accounting software will help you avoid wasting time looking at systems that are not a fit for your organization and keep you in control of the evaluation process.
3. Intelligent Reference Checking. When you've established your accounting software shortlist, don't rely on references that have been using the software for many years. Ask for references that have installed the system in the last 12-18 months. And, to compare apples to apples, make sure you speak to references that are in your industry and are about the same size as your company. If you're working with a reseller, check them out just as carefully as you would the software.
4. Proof of Concept Workshop. Most demos just give you a brief glimpse of the software. To really know how the program works, you have to go much further. Once you have a qualified shortlist, ask for a "proof of concept" workshop. Using carefully prepared scripts covering all key aspects of your operation, work with the vendors during a one-to-two-day workshop so you can fully test the system and see how it will perform in your environment. Although you will spend some money to do this, it's cheap insurance. Without the workshop, you really don't know what you're buying.
This article outlines elements that are vital to getting your accounting software up and running quickly and effectively. Following these guidelines and strategic planning suggestions before conversion provides the framework for your implementation and gives you control over the entire process.
Assemble Your Team
Your conversion team should resemble a pyramid of sorts. With a team leader at the top, followed by layers of support personnel with various levels of involvement, you will create a strong foundation for positive results.
Conversion Lead Your in-house conversion lead is the primary contact between your company and your software vendor. This might be the company owner, CFO or controller. This person should play an integral role in using the new software and will be responsible for keeping your implementation on track.
Top Level Managers The next layer of your team is comprised of the top-level managers. Some examples would be the controller (if he or she isn't your conversion lead), chief project manager, equipment manager and service manager. These individuals will provide valuable input on what they need from the new software to most effectively perform their jobs.
Data Entry Staff At the base of your pyramid is your data entry staff. During your conversion, it's important to include staff that will use the software on a daily basis. Discuss current processing procedures and identify ways that the new software can improve or streamline workflow.
In addition to these core groups, make sure you include other personnel at some level. This from-the-top-down approach to assembling your conversion team will effectively gain company-wide commitment and support for your implementation.
Tip: Consider bringing in your outside CPA as an additional team member or consultant.
Get Software Vendor Assistance
The most knowledgeable source for conversion assistance is your accounting software vendor. With hundreds or thousands of implementations under their belt, your vendor can provide invaluable guidance every step of the way.
If a conversion or implementation manager is available through your vendor, take advantage of their experience. Use vendor-supplied conversion checklists and do the legwork suggested to best prepare for your transition.
Resources offered by your vendor are worth the financial investment and will deliver a significant return on investment.
Tip: Get your vendor's recommendation on where to order new checks and forms for your software.
Create a Timeline
With your vendor's assistance, create a detailed timeline for your implementation. List everything that needs to be done, start to finish. Brainstorm with your entire in-house team to gather additional to-do items; the more thorough your list, the greater your chances are for success.
It may help to designate general categories to organize your thoughts. Some examples include: Pre-Installation, During Installation, Data Conversion, and Training Topics. Hardware and software installation dates and are just a couple of specific timeline items for consideration.
Conversion is an excellent time to evaluate your current chart of accounts and cost codes, and to make changes if needed. Adding these items to your timeline will prompt you to review and revise before it's too late.
Develop your timeline in calendar format with hard dates or date ranges for each milestone. Assign a team member to each item, making sure your conversion lead checks in frequently.
As you create and complete your timeline items, it will be important to ask questions. Communicate with your vendor and conversion team by asking: Are we on track? Are there things to add to the timeline? What potential pitfalls or delays can we anticipate and avoid?
Tip: Don't forget to add your "Go Live" date to your timeline.
Converting Your Data
There are two basic options when it comes to data conversion: manual and electronic. The choice you make will depend on the services offered by your vendor and how much data you want to bring into your new software.
Manual Data Conversion This option entails manually re-entering specific data into your new software. A time and labor-intensive task, using a team approach can help, especially if your entire staff tackles the data entry with gusto. Some companies choose to bring minimal data over to the new software, keeping their old system around for look-up purposes. In this case, manual data conversion is adequate.
One caveat of manual conversion is data entry errors. Long hours and tight deadlines are a breeding ground for mistakes. Make sure you implement quality control procedures to verify the accuracy of entered data.
Electronic Data Conversion Electronic data conversion involves the use of technology to bring your existing data into the new software. This option is ideal in many cases and for a multitude of reasons. Less labor-intensive than the manual method, the electronic route benefits smaller conversion teams or more aggressive timelines.
If electronic data conversion is available through your software vendor, give this tool serious consideration. Guidance on how to retrieve your data from your old system should be provided, as well as a listing of acceptable import formats.
Data quality, validation and formatting are key issues with electronic data conversion. Make sure you fully understand what your vendor can and cannot do, what your responsibilities in the process are and what procedures are in place for error checking.
Although electronic data conversion can import master files, job cost history, customer information, vendor details and open invoices in a very short period of time, it does require some technical knowledge. If this is a problem, your vendor may offer technical consulting or services to handle your electronic data conversion for you.
Data Cleanup The "garbage in, garbage out" principal applies to data conversion. The quality of your converted data will only be as good as the source you import from, whether that import is done manually or electronically. Taking steps to clean up your data prior to conversion gives you the opportunity to:
* Standardize your data (capitalization, abbreviations, acronyms) * Identify missing or duplicate records * Purge unnecessary data * Reformat your data if necessary * Evaluate for corrupted information * Test your data's validity when exported
Testing Testing your converted data is just as crucial as data cleanup. Manually or electronically entering data into a test database on your new system gives you the chance to evaluate critical processes and review vital reports for accuracy.
Think of testing as a practice or dry run for the real thing. Verifying data integrity, running queries and comparing reports in the new software with those from your old system are just a few safeguards gained by testing. The end result? Issues can be identified and corrected before going live.
Tip: Consider hiring temporary help during your conversion to assist with data entry or to provide day-to-day business support during this time.
Training
Once your software is installed and your data converted, training is the next phase in your implementation. Do not cut corners on training. Adequate instruction on the functionality and features of your new software will lay the foundation for continuous improvement in your workflow processes.
On-site training will be your best option for hands-on learning using your own data. Start with training on the core modules such as job cost, payroll, accounts payable and accounts receivable. Once these fundamentals are mastered, you can begin to roll out your additional program modules.
Follow-up training can be done on the phone, via e-mail or perhaps another on-site training session. Proactively improving knowledge of your new system will result in a more complete implementation, providing a strategic advantage to enhance your construction management processes. In any case, heed your vendor's recommended training guidelines for the system you have purchased.
Tip: Consider on-site training "refreshers" once a year, when you upgrade to a new version of your software or when you experience staff turnover.
A Continued Partnership
Long after your go-live date has passed, your relationship with your vendor will continue. Nurture that relationship whenever possible. Communicate enhancement requests to the development team. Offer to be a reference for prospective clients. And if regional or national user conferences are planned, attend them if you can.
Accounting and business management software can be a complex environment. The time and monetary investments made in a new management system are commitments to your long-term profitability. Building a partnership with your vendor will contribute to your ongoing success.
Sheldon Needle has sinced written about articles on various topics from Tax Software, Management Software Solutions and Software. Sheldon Needle is President of CTS, a leading publisher of independent accounting software reviews and ratings. Get your free Accounting Software Selection Kit and Smart Shortlist(TM) Consult by visiting. Sheldon Needle's top article generates over 74000 views. to your Favourites.