Software Selection 

Information Technology

Software Selection

Upgrading and changing an accounting software system can be a daunting process that requires research and the consideration of several factors.

FROM: JAN-FEB 2003 ISSUE | BY ROBIN DAY

Last fall's CGA-B.C. conference gave me the rare opportunity to get a sampling of some mid-range accounting software products. While the trade show environment didn't permit much by way of demonstration, I did get the chance to eavesdrop on some conversations where people inquired about the features of the products on display. Some of the questions overheard were extremely basic and made me a bit nervous about how CGAs may be selecting their accounting software. After all, selecting software based on the presence of one or two features or the ability to run on obsolete hardware is not exactly the best way to go about the process. Happily, my follow-up research revealed a lot more than an answer to, "Will it run on my five-year-old Pentium 2 system?"

So what factors should accountants consider when selecting mid-range accounting software?

Why Upgrade?

Before you start weighing the various factors in choosing accounting software, you must first determine whether you need to upgrade at all. Some may invoke the old axiom, "If it's not broke, don't fix it." But when you consider the results of a recent study by CFO Enterprises Research Services (http://cfoenterprises.com/index.shtml) , it becomes clear that your accounting system's worth is determined by a lot more than whether it's functioning. Admittedly, this survey of 265 largeU.S. corporations may not be directly applicable to the mid-rangeCanadian market. But, if my conference eavesdropping is any indication, its findings aren't too far off the mark.

In this study, 63 per cent of respondents indicated that they were working with inadequate, non- or partially integrated budgeting, forecasting and decision support systems. And 39 per cent felt that financial personnel spent too much time on transaction processing. Based on these numbers, I would say that most financial information systems are overdue for an upgrade, particularly if you want to reduce time spent on transaction processing so that you can focus on value-added services like strategic planning, reporting and analysis.

Why is it that so many large corporations are using outdated systems? Sadly, the dot-com mania that propelled corporate IT spending to new heights in the 1990s did little for those in the accounting department. In fact, I'm sure that, on more than one occasion, money that would have otherwise gone to upgrading financial systems went instead to the president's nephew to develop a full-motion video home page for the company Web site. This kind of spending priority has left some organizations with the look and feel of a high-performance race car, when under the hood is an overworked hamster running like mad.

Using a non- or partially integrated system may mean transactions initiated on a corporate Web site wind up getting printed off and re-keyed into an outdated accounting system, or worse, re-keyedtwice — once into a payment processing system and again into the G/L later on. The e-business features of newly released accounting software products can save this wasted time by allowing you to integrate your back office accounting functions with your Web-based front end. This approach will also save paper.

So is it time for an upgrade? Unless you've already done so in the past couple of years, the answer is probably yes.

Version Upgrades

Now the fun really begins: deciding what product is best for your organization.

Many accounting software users would rather upgrade to the newest version of their existing software than select a new product. After all, the selection process is usually as simple as a quick look at the feature list, and the product cost is often buried in the cost of an annual service contract, meaning you are paying for a benefit that you may not be using. Add to these benefits the elimination of costs associated with data conversion and extensive staff training, plus the fear factor associated with changing suppliers, and you have a pretty compelling list of reasons to stick with your existing product.

This was indeed the case when CGA-B.C. recently upgraded to the latest version of ACCPAC. "ACCPAC is a known product that has demonstrated reliability in the marketplace," says controller Helen Fisher, CGA. Fisher also cited the availability of trained staff and local technical support as strong motivators in selecting the latest version of ACCPAC.

The availability of technical support can, in fact, be a significant consideration in version upgrading. As new versions become available, suppliers often stop supporting older ones. And skipping a version can be problematic; upgrades typically require you to move incrementally, i.e., you must go from version 3to 4 before moving to 5. An exception to this is the newly released version 7.0 of Microsoft Great Plains Dynamics, which requires that users already be running Dynamics version 5.5 or newer, meaning you can skip one version (6.0). However, those who are using earlier versions face a more complex process that will end up costing more time and money.

Planning Your Legacy

Data migration is often one of the more powerful reasons to stick with a version upgrade rather than move to a new supplier. While it's a relatively simple matter to move data from ACCPAC version 5.5 to version 6.0, going from ACCPAC to Dynamics is a whole other ball game. Many tools have been developed to make this type of transition easier, but you're almost guaranteed to lose some of your existing system's history.

When I hear people talk about legacy issues — those dealing with updating and/or replacing older systems — they tend to focus on aging mainframe and minicomputer systems facing retirement. In reality though, legacy issues can affect any system being replaced, from the corporate mainframe down to your personal desktop. This means that you must consider not only the system being retired, but also the eventual retirement of the new accounting system. The level of integration with other systems and need for access to historical information means legacy issues can be a major headache — unless you plan ahead.

Planning ahead for future integration can be as simple as ensuring the product you select uses a standard back-end database, such as Oracle, IBM's DB2 or Microsoft's SQL Server. Alternatively, you should ensure your software at least provides the ability to gain access to the underlying tables using a standard toolset. Industry leaders such as Dynamics and ACCPAC have done this for some time now, and most mid-range solution providers have followed their lead. However, even if you take all these precautions, you will still likely lose some detail because of differences in the tables used to store the data within the system.

These potential problems are amplified if you have done any custom programming on your systems. Will interfaces that you have built to exchange data with other products still work when the time comes to change accounting packages? For those who have invested in software customization, the thought of changing suppliers is enough to create a panic. And no matter how well your custom ACCPAC screens or interfaces work, I can guarantee they won't function with MAS 90, Dynamics or any other non-ACCPAC system. Even if you choose a simple version upgrade, you could end up recreating some or all of your custom programming.

On the upside, moving to a new version can open the door to interfacing with systems that were previously inaccessible. For example, one of the reasons Helen Fisher cited for CGA-B.C.'s upgrade is the ability to integrate the accounting system with the new association management system that is currently being developed.

Safety Nets

If you're not upgrading to the latest version of the software you already run, you must consider the availability of local support for the product you do choose. Monty Chew, a senior student in the CGA program and controller of the WJS Group of Companies in Maple Ridge, B.C., says, "Having confidence that a product is reliable and supported locally will be key in selecting a replacement for the company's aging ACCPAC system." Fortunately for Chew, being within a 50-kilometre radius of Vancouver gives him a wide selection of potential vendors and service providers.

For those doing business in more rural areas, the choices are not so broad. But vendor and support proximity is not as important as it has been in the past. Technology has made remote support far more effective than ever. Streaming audio and video allow you to train online rather than call on a high-priced specialist, and remote desktop management software enables support personnel to take over the controls from hundreds or even thousands of miles away.

Of course, if a system is reliable and the administrators do their part, support should not be required more than once every blue moon or so. But you should always have your bases covered for the worst-case scenario.

Ease of Use

I have not yet seen a product brochure with the words "incredibly confusing and non-intuitive" plastered across the page. Every software supplier claims its product is easy to use. The big question is which parts should be easy to use? The answer I get most often relates to reporting. It seems no matter how easy the input, it's output that really matters.

Accountants live and die by their reports, so it's surprising how little use some of us make of the ability to generate custom reports. Many of us get so caught up in the daily grind that we don't take the time to explore the advanced features of our software, making do instead with standard versions of reports that don't always tell the whole story.

Virtually all mid-range systems offer advanced reporting features. In addition to their internal reporting engines, they are able to export data to spreadsheets such as Excel and Lotus 1-2-3. And most systems are also now accessible using bolt-on products like Crystal reportsand FRx. Designing reports in these user-friendly analysis and reporting packages can be as easy as dragging and dropping details on a report template.

Of course, not all reports need to be of the formal, printed variety. Sometimes you just need to know what makes up a certain number. For senior accountant, Karla Westcott, CGA, the Windows-baseddrill-downs and analysis codes in Microsoft's Great Plains Dynamics make this job easier. " Drill-downs give me the ability to easily determine what makes up the totals I see on financial reports," Westcott says, adding that the analysis codes allow her to create — and ultimately report on — detailed analyses within the context of individual GL accounts. Ultimately, your accounting software need only meet your specific reporting needs. It should be easy to use where it counts.

Expert Advice

I found it rather interesting that none of the senior accounting personnel consulted mentioned their external accountant's recommendations. Then again, once a company moves beyond the realm of basic products like Simply Accounting and QuickBooks, it typically looks to an IT consulting group for assistance with selection, installation and ongoing support.

But not all public practitioners are content to let this lucrative consulting work go down the road. Many firms that don't have the resources to provide these services in-house are forming strategic alliances with consulting groups, enabling them to meet their clients' needs without having to develop or hire the expertise they would otherwise require. These alliances can provide a good resource for those seeking advice on choosing new accounting systems. However, not all consultants are created equal — some are just salespeople in expensive suits. Beware of those representing only a single product. Their advice may be a little skewed.

It's the Fit

No matter how you slice it — and regardless of how many of the preceding factors affect your installation — the ultimate test of a system is whether it fits your organization. Admittedly, most of the mid-range products have a similar feature set when it comes to core accounting functions, but each has its strengths and weaknesses.

Whether it's Best Software's MAS 90and 200 packages for their distribution and light manufacturing abilities, Dynamics for its integration with Microsoft Office, or ACCPAC's penetration of the small-business arena with Simply Accounting, there is a system out there that's ideal for your particular environment and needs. For my money, it's the fit that makes the difference. To help determine whether a product is the best fit, ask yourself these questions:

• How much re-engineering of my existing business processes will be necessary?
• Can the product be integrated with my existing software?
• Have references for the product within my industry been provided?

Selecting accounting software is never an easy chore — and selecting the wrong product can have devastating results — but it doesn't have to end someone's career. Develop a grocery list of needs and prioritize each one according to your organization's criteria. Once you've done that, it's just a matter of finding the product that is within your budget and meets most of the needs you've identified. Sounds easy, right? To be honest, it can be — unless you want something that will run on your five-year-oldPentium 2 system.

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Robin Day, MBA, CGA, teaches financial management at the British Columbia Institute of Technology. He is also president of Virtual Information Technologies Inc.E-mail rday@virtualit.ca.