Month- and year-end reconciliation of corporate financial data that relies on spreadsheets is a universal practice that is not fun, not accurate, and not necessary. One goal of many companies implementing an ERP system is to eliminate these spreadsheets. View the original Blog post: http://www.eprentise.com/blog/trends-and-technology/going-green-in-erp/ Website: www.eprentise.com Twitter: @eprentise Google+: https://plus.google.com/u/0/+Eprentise/posts Facebook: https://www.facebook.com/eprentise Ensure your data is Complete, Consistent, and Correct by using eprentise software to transform your Oracle® E-Business Suite.

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Going Green in ERP
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2. Going Green in ERP
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Author: Helene Abrams
Published: January 20, 2008
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3. Going Green in ERP
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Month- and year-end reconciliation of corporate financial data that relies on spreadsheets is a universal
practice that is not fun, not accurate, and not necessary. One goal of many companies implementing an
ERP system is to eliminate these spreadsheets. However, even with ERP systems in place, most
corporations still rely heavily on spreadsheet reconciliation because their implementations sometimes
reside in different systems or rely on separate charts of accounts (COAs) for different parts of their
businesses. A company having different charts of accounts, for example, has no choice. To provide
meaningful information for reconciliation, consolidation, or budgeting, the company must have a
consistent representation of the data. Thus, data that was recorded using different categorizations must
be ‘translated’ or ‘harmonized’ by spreadsheets that attempt to standardize and make comparable the
reports derived from the original data.
Neither the spreadsheet process nor the resources consumed by the spreadsheet effort are trivial. A
workflow study done by one of the major accounting firms at a client site found that mid-sized companies
used literally thousands of spreadsheets to map transactions between entities, and to reconcile
supporting detail to their respective general ledgers. As an ecological matter, eliminating the many copies
of those often lengthy printouts would have a favorable “green” impact, but the more obvious “green”
impact is financial. In that particular company, over 450 FTE were being devoted to spreadsheet-based
reconciliation, consolidation, or budgeting despite the presence of a fully implemented ERP system. The
project manager estimated that having a more fully integrated ERP system with standardized charts of
accounts would have reduced the spreadsheet headcount by 80%. Although the example at first seems
extreme, it is not once the far-flung multi-jurisdictional nature of modern business entities and the
familiar growth-by-acquisition patterns are considered. Profitable, growing companies regularly add new
pieces to their business and with them heterogeneous data and systems.
Beyond the resources consumed in maintaining a spreadsheet-supported reconciliation process, there are
significant business risks that attend the process: simple error and the potential for fraud, misuse, and
liabilities that could follow. Focusing on spreadsheet error, data from an independent study show that
“one percent of formula cells have errors” (Hesse). Out of eighty-eight spreadsheets audited in seven
studies, ninety-four percent of them contained errors. While a single error can make a negative impact,
hundreds of errors can lead to disastrous results for an organization. Given the way in which the
spreadsheets often build upon one another, one taking data from the other and further analyzing or
adjusting it, there easily can be a compounding effect, making an accurate financial or business
performance picture much less likely to emerge from the spreadsheet process. Some errors end up being
errors of high visibility and great magnitude. In 2003, financial services company Fannie Mae “admitted to
making a $1.2 billion error in calculating third quarter earnings on a spreadsheet” (Hesse).
The problem of error, and resultant inaccuracy in spreadsheet compilations, is difficult to address
effectively. One common method for detecting and eliminating human error in reporting and data
analysis is peer review in the form of having others check the work. While peer-reviews will reduce the
number of errors that make it through the mix, in this context errors are likely to persist because of the
sheer number of spreadsheets being produced at the desktop level with the possibility of error in virtually
every cell, or formula, or input gathered for another spreadsheet. Here too, reducing the need for
spreadsheets by standardizing the charts of accounts in the ERP system in a way that corresponds to
business operations and reporting needs is a more certain path to eliminating error than improved
oversight of the spreadsheet process.

4. Going Green in ERP
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Standardizing charts of accounts across a business greatly reduces the need for spreadsheet-centric
activities. Once charts of accounts are uniform, there is no need to map from one chart to another,
bypassing any reliance on spreadsheets to get the job done. Obviously, with the elimination of numerous
spreadsheets, fewer material and especially human resources go into the reconciliation, consolidation, or
budgeting cycles. A reduction of as few as 10 FTE represents an annual savings of roughly $1 million each
year. Importantly, the end product is better. Not only is accuracy improved by the elimination of
spreadsheet cell formula errors, potential data entry errors are avoided because correct and complete
data is available company-wide by queries against the ERP system. Instead of the collection of desktop
generated spreadsheets, the same function is accomplished by reports that can be standardized across
the company and are, in essence, printed straight from the general ledger or other data present in the ERP
system. Moreover, the reports can be more timely because they eliminate the delay inherent in producing
the spreadsheet efforts. The end result of reports against a standardized chart of accounts is to provide
the same information more quickly based on up to the moment data that is in the general ledger, rather
than older data that was inserted as a value in a spreadsheet.
Curious?
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About eprentise
eprentise provides transformation software products that allow growing companies to make their Oracle® E-Business
Suite (EBS) systems agile enough to support changing business requirements, avoid a reimplementation and lower the
total cost of ownership of enterprise resource planning (ERP). While enabling real-time access to complete, consistent
and correct data across the enterprise, eprentise software is able to consolidate multiple production instances, change
existing configurations such as charts of accounts and calendars, and merge, split or move sets of books, operating
units, legal entities, business groups and inventory organizations.