CHAPTER FOUR

Using systems to organise and collect data

IT FOLLOWS THAT ATTENTION SHOULD BE PAID to related systems. Specifically, two areas are addressed:

• ERP systems and spreadsheets;
• SAP, Oracle and Cloud.

4.1 ERP SYSTEMS AND SPREADSHEETS

The use of spreadsheets is commonly understood and forms an additional tool to data-collection and analysis processes, as provided by ERP systems. These systems use databases and software applications to integrate internal and external management information across an entire organisation, embracing all manner of functions, such as finance/accounting, manufacturing, sales and service, and customer relationship management.

Basically, ERP systems automate this activity, doing so in real time, with an integrated software application in order to facilitate the flow of information between all business functions inside the boundaries of the organisation and to manage the connections to outside stakeholders. Given the popularity for such systems, it is understandable that most computer service providers have ERP in their suite of products. The modular nature of the ERP offerings allows for the installation of one or more modules that can stand alone or be connected, to ensure data integrity.

Generally, the modules of any ERP system are as follows:

• Finance and accounting
  • General ledger, accounts payable, cash management, fixed assets, accounts receivable, budgeting, consolidation
• Human resources
  • Payroll, training, benefits, recruiting
• Manufacturing
  • Engineering, bill of materials, work orders, scheduling, capacity planning, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow, activity based costing, product lifecycle management
• Supply chain management
  • Inventory, order entry, purchasing, product configuration, supply chain planning, supplier scheduling, inspection of goods, claims processing, commissions
• Project management
  • Costing, billing, time and expense management, performance units, activity management
• Customer relationship management
  • Sales and marketing, commissions, after sales service, customer contact, call centre management.

In addition, ERP systems have a number of fundamental tools related to the modules and the system overall, such as:

• transactional database;
• management access;
• dashboard reporting;
• business intelligence systems;
• customisable reporting;
• external access via ICT and the Internet;
• search capabilities;
• document management;
• messaging between users;
• workflow management.

As with most computerised applications, there is a need for standardisation of codes, processes and practices to facilitate automation and thereby gain the expected benefits from investment in computing hardware and software. This necessitates changes (which can be troublesome) to existing operations of a user site and/or customisation (which can be expensive) of the programming code that makes possible the functionality, as well as the look and feel of screens and assorted reports.

4.2 SAP, ORACLE AND CLOUD

In relation to the section on ERP, it is noteworthy that associated systems and applications can be in-house, as with significant technology service providers SAP and Oracle. Or users can access so-called cloud-based applications. This section looks at these possibilities in summary form, with the primary focus on the main topics of this book.

SAP IFRS XBRL

SAP has a keen interest in IFRS, which is reflected in its website (www.sdn.sap.com/irj/bpx/ifrs). The related pages of this site are a resource for businesses that are implementing IFRS, especially using SAP solutions.

Particularly, the website features:

• A series of webinars, entitled ‘Ensure a Successful IFRS Transition with SAP', utilising experts from SAP partners focusing on IFRS. The following partners are participating in the webinar series: Accenture, Clarkston, Ernst & Young, Deloitte, PwC, and SAP Consulting.
• SAP Global IFRS Survey Results whereby SAP shares the results of the SAP IFRS Survey of more than 350 financial executives, who gave their insights into how their companies are preparing for the IFRS transition.
• Recently Featured
  • IFRS Convergence is Here Now
  • Uncovering Business Value
  • IFRS Transition: To Upgrade or Not?
  • U.S. SEC Clarifies Its Position Around IFRS Adoption
  • SAP Education Hot Topic: A Good Way to Start Your IFRS Learning Journey
  • IFRS and Parallel Reporting An SAP EcoHub Webinar Series
• Year 2011: The Tipping Point for Accounting Standards – As accounting changes unfold with the convergence of new IFRS standards, Pete Graham highlights how knowledge and advanced planning will be the best way to ensure success in 2011.
• Latest IFRS Content
  • Check print was not genrated in APP
  • An Industry Win Over Liquidity Buffers
  • How to implement IFRS requirement?
• IFRS Knowledge Center
  • Getting Started
  • IFRS FAQ
  • IFRS Webinars and Recordings
• Related Areas
  • Enterprise Resource Planning (ERP)
  • Enterprise Performance Management (EPM)
  • Standards

In addition, see IFRS and XBRL for SAP BusinessObjects EPM Solutions on Facebook at www.facebook.com/sapifrs.

Oracle IFRS XBRL

Oracle has a web page dedicated to IFRS (www.oracle.com/us/solutions/corporate-governance/ifrs/061806.html).

Aside from introductory text related to IFRS, the site suggests:

While full IFRS adoption might still seem far away, the IFRS transition is a process that has to be in place three years before the date of actual conversion. Organizations should therefore start evaluating the impact IFRS will have on their systems and processes today. Oracle has been addressing IFRS requirements for many years and offers a variety of solutions that can assist with the transition to IFRS. In the over 100 countries already required or permitted to use IFRS today, many organizations are already using Oracle solutions to comply with IFRS requirements.

Furthermore, the site has other sources of relevant information, summarised next:

• News
  • Deloitte Comments on SEC's Recent IFRS Announcement
  • Webcast: Deloitte Special DBrief ‘SEC's Plans for Moving Forward with IFRS' (March 9, 2010)
  • KPMG – IFRS Now Magazine – In Conversation with Jeff Epstein (PDF)
  • Press Release: Deloitte and Oracle Extend Alliance to Address International Financial Reporting Standards
  • Oracle Financials Product Marketing Blog
• Brochures and Data Sheets
  • Accenture Point of View: Guiding utilities through IFRS adoption using Oracle Applications
  • Accenture – Planning for IFRS Adoption
• White Papers
  • Oracle's Financial Management Solutions: Transition to IFRS with PeopleSoft
  • PwC – IFRS is on the horizon: Are your systems ready?
  • Oracle's Financial Management Solutions: Transition to IFRS with Oracle E-Business Suite
  • Managing the Transition to International Financial Reporting Standards
• Podcasts
  • Oracle and KPMG Podcast
• Internet Seminars
  • Guiding utilities through International Financial Reporting Standards adoption using Oracle applications

Oracle produces another source of important information, New Reporting Requirements: IFRS, XBRL, Sustainability, aimed at CFOs. See www.oraclecfo.com/Main/Solutions/Solutions_w.html?mode=1&articleID=2263&categoryID=82#tab1.

The related text is as follows:

Cost and Disruption of IFRS Transition, XBRL

While moving to IFRS will make life easier for analysts and investors in comparing and analyzing the financial health of global companies, the transition will cause challenges for accounting and finance staff who must report results in local GAAP and IFRS during the transition period. The adoption of XBRL by the US SEC and other regulators is impacting over 8,000 companies who are updating their filing processes and systems to support the standard.

Sustainability Reporting

Sustainability Reporting (environmental, social and economic reporting) is gaining momentum with over 2000 organizations globally registering reports with the GRI. Whether for mandatory or voluntary purposes, for many organizations, sustainability reporting poses a new challenge. There are typically many different data sources - such as operational systems, financial systems, documents, published reports - and many different kinds of indicators that must be collected and aggregated. The diversity of the relevant structured and unstructured data further complicates matters, and the data must be auditable.

The site also provides:

• Podcasts
  • Using XBRL to Make SEC Filings Easier at Oracle
  • Improving Sustainability Reporting at Dong Energy
  • Managing the Transition to IFRS
  • Regulatory Reporting Using XBRL – The SEC Viewpoint
• Webcasts
  • XBRL & SEC Mandate – Are you Ready?
• White Papers
  • Beyond the final mile of group [corporate] financial reporting
  • Oracle's Financial Management Solutions: Transition to IFRS with Oracle E-Business Suite
  • Preparing U.S. Companies for the Transition to IFRS: A Guide for JD Edwards Customers
  • Planning for IFRS Adoption
  • Sustainability Matters
• Links
  • Learn more about Oracle Enterprise Performance Management
  • Learn More About Oracle and IFRS

Cloud

In contrast to in-house systems, cloud computing refers to the delivery of computing as a service rather than a product. For instance, shared resources, software and information are provided to computers, and other devices, as a metered service over the Internet. Usually, end users have no knowledge of the physical location and configuration of the system that delivers the services. It is a scalable way for users to use ICT services.

In addition, there are cost advantages in relieving users of hardware and software investment, although there is the related issue of not having total control over user data, and related processing, when it is hosted elsewhere than user premises.

There are three main cloud services:

• Software as a Service (SaaS) – as relates to the Internet-based model whereby software and data are hosted by a provider;
• Infrastructure as a Service (IaaS) – also on the Internet, providing ‘on demand' computing power whereby access to servers and storage is provided quite quickly and clients pay only for what they use;
• Platform as a Service (PaaS) – relates to application developers and where there is the opportunity to create and deploy new made-to-order software.

Note also that there are four distinct types of cloud:

• public cloud – wherein multiple entities and users share the infrastructure and software;
• private cloud – here users share dedicated corporate-based infrastructure and software;
• hybrid cloud – a combination of external and in-house resources;
• community cloud – allowing some entities with mutual interests to share infrastructure and software.

Given the related cost savings this approach to data collection, processing, analysis and distribution has made a significant impact upon the ICT plans of corporations and government departments. Smaller users have also accepted this approach to servicing data-related needs.

Increasingly, the use of finance and accounting applications, such as ERP, will be hosted outside of user locations, and the same will apply to the provision, processing and delivery of data, information and business reporting. In that regard, cloud computing is likely to facilitate a change in the way that IFRS and XBRL are accessed and implemented, with this shift being a significant and positive one.