May 19, 2020

Where is the 'Planning' in ERP?

business tips
money matters
Business management
Bizclik Editor
4 min
Where is the 'Planning' in ERP?

Click here to read this article on our interactive reader in the July issue of Business Review USA!

Written by Linda Cade

In today’s economy, everyone is trying to do more with less. Economic indicators tell us that manufacturing is beginning to pick up, but we’ve heard that before. Business analysts are predicting an upturn in overall business in the coming months. Unemployment rates are lower than they’ve been in years. That’s all good news, but none of us are ready to return to the days of unmonitored spending or extravagant hiring practices.

For many businesses, the largest asset after personnel is inventory. For many of those same businesses, the largest potential expense after payroll is the cost of the inventory that sits on the warehouse floor. In the face of economic challenges, some very smart people have developed various methods to help minimize the impact of assets tied up in unused inventory and wasted warehouse space. You’ve undoubtedly seen the acronyms and come across the names:

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Each of these methods or best practice guidelines brings its own philosophy as to the best way to coordinate, estimate, plan and purchase materials and goods to accomplish high efficiency, quick inventory turns and maximum profitability. But where does your ERP system fit in all of this planning?

An effective ERP system provides the integration across multiple functions within your business needed to establish the foundation for any of these methods. Additionally, the ERP system provides the ongoing business intelligence to drive the decisions that are the key to the success of the method. So let’s break it down and take a look at how it all comes together.

Each operational planning method includes some combination of data elements drawn from the ERP system:

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Even though the information is drawn from the ERP system, it is spread across multiple sources. For example, the work order scheduling function provides the capacity information while the Material Requirements Planning function predicts and recommends purchasing or manufacturing activities. Other elements may require a compilation of data from multiple sources. Illustrated here are the ERP sources for the elements required for operational planning:

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The information provided by the ERP Solution may require some translation or transformation to be easily understood as the elements of the Operational Plan.

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The key to unlocking the information and enabling the planning process is Business Intelligence. With a good intelligence tool and perhaps some creativity, an Operational Planning Dashboard based on your ERP solution data can facilitate your planning committee meetings and streamline your procurement process. 

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As a result, the implementation of an operational plan becomes a reality. This reality drives positive changes in your business processes and results in improvements such as the following:

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So, where is the planning in Enterprise Resource Planning? It starts with the basics.  Look to your ERP system to provide the building blocks. 

·         Using your inventory management features, systematically examine your inventory setup, warehouse layout and workflow and replenishment parameters. 

·         With the information from your CRM tool, examine your sales channel and pipeline for potential changes in the market.

·         Based on the information in your Accounts Receivable and Sales Order modules, gather as much data as possible about your customer profiles and buying habits.

·         Using the data from Accounts Payable and your Purchase Order systems, evaluate your vendors based on performance and quality as well as pricing.

·         Implement and track quality measures during the receipt of stock through the Purchase Order process and/or the production of goods using the Routings and Work Order steps in manufacturing.

·         Involve your employees in continuous improvement and productivity efforts and monitor their results using Shop Floor Control or similar tools.

Then finally, by leveraging the features and data delivered by your ERP system, you can implement the operational plan of choice and reap the results for your organization.

About the Author: Linda Cade is a product marketing manager for Sage 500 ERP and is based out of the Sage North America office in Irvine, California. Cade began her tenure with Sage in 2000 and has served in various positions including customer support analyst, customer support manager, customer support training manager, customer support account manager and product manager. Additionally, Cade has over 30 years of experience in multiple business environments including retail, distribution, manufacturing, banking and financial management, real estate development, tax preparation and booking, restaurant management and law. Cade is a certified bookkeeper and is a member of the National Association of Certified Bookkeepers. Cade was named a member of Cambridge Who’s Who in 2008-2009.

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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