How One Vendor Supplies Agility to Post-implementation Enterprise Systems

Fine, but "Show Me" How Agility Works

Agresso has seen an untapped opportunity in the vulnerability of most current peer enterprise resource planning (ERP) solutions, which cannot really address rapid change within a company. Background information on Agresso and its product Agresso Business World (ABW) 5.5 can be found in Enterprise System and Post-implementation Agility—No Longer Necessarily an Oxymoron?. For information on the opportunity Agresso is addressing, see The Post-implementation Agility of Enterprise Systems: An Analysis and The Modelling Approach to Post-implementation Agility in Enterprise Systems.

Part Two of the series Enterprise Systems and Post-implementation Agility—No Longer an Oxymoron?

We are aware that grandstanding slogans like "unlimited data capture, key performance indicators, and alerting capabilities for reporting and analysis"; "combined business process, workflow, and reporting into a single, unified model"; or "financial and non-financial intelligence move in a lockstep, in a Lego block-style" mean little without concrete examples. To that end, the best illustration of Agresso's ability to incorporate architectural flexibility—without encumbering ledger accounts and master data—is the possibility of creating a ledger account structure with no sub-ledgers at all. This is contrary to the conventional approach to financial analysis, which is to create complex ledger structures with several sub-ledgers (for instance, with an account structure looking like x/xx/xx/xx/xxx/xxxx/xxx) so as to accommodate all possible reporting and analysis data fields, with combinations like "fund," "committee," "cost center," "department," "balance sheet," "division," "subjective account," and so on. For instance, CODA offers a multiple dimensional capability supporting up to eight variable-length account code segments, which enable revenue and expense tracking at a highly detailed level, while the hierarchies and account groups features add virtually unlimited account rollups to meet inquiry, reporting, and drilldown needs (see Composing Collaborative Financial Applications).

Agresso's approach to analysis is rather that almost any financial information can be rolled up via key building blocks, starting with the "attributes" mentioned in Part One of this series. These are the basic building blocks of the ABW application suite, and shape the way in which the system can be customized to meet a variety of information needs. In broad terms, attributes define which analysis is to be captured on entering transactions, but they can also be organized into reporting hierarchies to allow information to be viewed in different dimensions. The out-of-the-box attribute definition covers all of the master data (in other words, fixed or static) within the application (such as cost category, asset type, directorate, location, employee, cost center, department, event, expense type, project, fund, payee type, and property).

However, users can add their own definitions as required to deliver the analysis most appropriate to their business. Thus, using only the standard functionality, the application can be tailored, since the validity of attributes can be limited to certain defined date ranges, or to certain user groups, whereas linkages defined between attributes enable one attribute to be "owned" by another. As a further refinement, each unique attribute or category of analysis can have multiple values. Using this facility, it is possible to analyze adjustments separately for each accounting standard, if desired, to provide another layer of analysis, accountability, and control. Additionally, attributes can be reserved to specific user groups or limited to different user-defined date ranges, in which way it is feasible to keep year-end adjustments, for instance, separate from interim adjustments.

Relationships, Rules, and Workflow

The capability to define relationships between attributes is another key differentiator for Agresso, and a major reason why it is not necessary to employ an external multidimensional reporting tool. Essentially, the definition of relationships in the system allows the systems administrator to create reporting hierarchies which are generally equivalent to the dimensions in a data warehouse. For instance, "employee" gets rolled up into (or reports to) "budget holder," which gets rolled up into "manager," which gets rolled up into "division," which gets rolled up into "directorate," etc. Remarkably, the same hierarchy can be used in reporting and enquiries to examine different data.

Furthermore, any new data gets captured based on rules—for instance, a certain account rule may determine other required attributes. Account rules within the suite govern the way individual accounts are treated in the application, as well as which information attributes must be entered when users post transactions to accounts. For instance, a direct cost account might require a cost center (which in turn requires a service area and division), a work order (which in turn requires officer, job, and job type), an element, etc. In the financial reporting context, careful use of the account rules in concert with attributes is absolutely central to the handling of complex multiple generally accepted accounting practices (GAAP), and to the ability to analyze the major geographies and business segments that contribute to the group turnover. The built-in control mentioned above also accelerates data entry, reduces input errors, and sets the basis of flexible reporting and reconciliations around all possible differing financial reporting requirements.

Furthermore, in the latest release of ABW, which incorporates workflow functionality at the attribute level, it is possible to create a controlled, auditable, and efficient response to a wide range of user needs, which also enables the system to be aware of how any new data might affect business processes and reports, which is quite awkward (if not impossible to achieve) in heterogeneous environments with multiplied metadata. In such cases, this metadata requires constant replication, and complex and costly software systems like master data management [MDM] applications—see SAP Bolsters NetWeaver's MDM Capabilities). This is particularly true for the large competitive offerings where broad application sets have been enlarged through acquisition rather than organic in-house development.

It should now be clearer how the Agresso's information warehouse, business process, and reporting and analytics information delivery models are inextricably linked in a virtual cycle. A change in any of these three core competencies automatically informs a change in the other two, and it is thus not necessary to re-architect the system or instil business disruption. For example, a new business process automatically leverages the information warehouse and reporting. Similarly, the addition of new metadata is immediately available to processes and analytics.

Finally, changes to analyses are immediately set in the business process context. In other words, power users orchestrating a new business process will automatically leverage the information warehouse and reporting capabilities. Similarly, the addition of new data from an acquisition is immediately transferred to established business processes and analytics. Also, new analysis requirements are immediately propagated directly into the organization's business process context.

Conversely, most Agresso competitors have to rely on third party solutions or less tightly bound in-house approaches, whereby superficially, information may flow between them, but in practice a change to one aspect inevitably requires a change to the other two, which quite often has to be accompanied by skilled IT intervention and thereby negatively impacted bottom-line margins.

To be fair, most ERP products now include a workflow tool (or even go to a higher level, meaning business process management [BPM] tools—see Business Process Management: A Crash Course on What It Entails and Why to Use It). To that end, Agresso has come up with the Agresso IntellAgent alerting and notification tool, which was released within ABW 5.4 SP4, to automatically monitor data and events in the suite for critical or time-sensitive conditions, and to then proactively report on business situations. Being an analytics and reporting methodology (rather than a mere workflow tool), IntellAgent generates alerts through a variety of media and devices, and takes other "intelligent" actions. In other words, it is a "sense and respond" business activity monitoring (BAM) tool that looks for certain events (such as the addition of a new row to a table, a change of field, the existence of a file within a sub-directory, etc.) and then responds with pre-determined action plans to this information. It enables the user to set up events that cover any aspect of the business (such as notification of outstanding payments or orders, or the generation of e-mails to the budget holder when actual expenses are nearing the budgeted amount). The tool is quite configurable, allowing alerts and events to be designed and set up for users with differing needs. This kind of automation of events and notifications in any user's business information system positions the enterprise to increase the effectiveness of its staff and organization, since time spent exploring ABW data for relevant information is thereby reduced significantly.

Finally, it's important to note that the combination of Agresso's information, process, and delivery model not only impacts the bottom line, but it should also impact the corporate strategies deployed by organizational management. By postponing or avoiding change that might be painful and stressful for organizational performance, companies often cripple otherwise valuable strategic initiatives. Agresso believes it is challenging corporate management to consider business strategies involving change—strategies that they might previously have discarded as "too onerous" to the business.

Where Agresso Goes a Mile Further

Moreover, what is really needed—and this is where Agresso goes a mile further—is a way to embed deep, meaningful business rules and logic down to the data (or field, or attribute level). For example, a well-devised solution will not allow anyone to reconfigure a workflow that would disregard US Sarbanes-Oxley Act (SOX) or International Financial Reporting Standards (IFRS) compliance steps (see Joining the Sarbanes-Oxley Bandwagon: Meeting the Needs of Small and Medium Businesses). Likewise, an "aware" enterprise system would not permit someone to move the drag-and-drop of a specific field to a different screen if that information is required for some other critical processing.

To be fair, some ERP systems have certain built-in controls, but these have been hard-coded without an easy way to discern pesky interdependencies, which quickly become impediments to change. As admitted by SAP's former chief executive officer (CEO) Hasso Plattner a few years ago, SAP R/3 had so much unneeded hard-coded functionality (so as to accommodate customer requirements over decades) that it eventually become too "obese"; only time will tell how the service-oriented architecture (SOA)-based SAP NetWeaver and SAP Enterprise Service Architecture (ESA) rewrite will help in that regard (whenever that colossal undertaking ends).

Further along the line of enabling post-implementation modifications (agility), the Agresso data model is accessible, allowing precise tailoring of parameters, additional fields, extensions to applications, and integration with external data sources, all without extensive IT staff input. This is also in sharp contrast to the competitive offerings, where even basic tailoring is almost always reliant on extensive consulting and programming input and configuration.

The release of ABW 5.5 heralded Agresso Flexi-fields, which is a dynamic feature that gives users the ability to straightforwardly define additional tabs, validated fields, and tables that meet their needs, when and where they desire. Users define the validation, access, and data control for these flexi-fields, and information added through flexi-fields can be in the form of external data, user-defined input fields (to expand master tables and attributes), or output from a Web browser-based template. Flexi-fields also help with customization and enhanced visibility, since customized screens speed up quality entry (with maximum validation), while grouping relevant data (internal and external), information, and transactions per entity for maximum visibility.

Furthermore, using workflow functionality, a user-definable approval process can be established at the attribute level. For example, if multiple financial reporting adjustments are implemented using attributes (as explained above, to accommodate the reconciliation of differing accounting principles at a group level, or for various units), a separate workflow or process sequence can be defined for all adjustments or particular categories of adjustment. The workflow is then created in a flowcharting tool, which describes the activities, decisions, and actions to be taken at each stage of the process. The workflow engine is integrated with Microsoft Outlook and Novell GroupWise, so that e-mails seeking approval for financial reporting adjustments can be passed automatically along the "pecking order," showing the nature of the approval required, and the individual seeking permission. Reviewers can, depending on the setup of the system, approve the request, reject the request, or change the data before passing it on to the next person, while at each stage, relevant e-mails can be automatically generated to notify users of the actions taken and the status of the workflow. Using the system in this way, it is possible to build an audit trail of the changes that have taken place and of the authorizations given. Also, by limiting the process to certain types of adjustment journals (via attribute values), time need only be spent reviewing those transactions considered to represent a risk to the organization.

In this regard, Agresso cites the success of a large user engineering corporation in the UK. This corporation has 3,600 employees, 5 divisions, 30 entities, over 60 offices worldwide, projects in 70 countries, and nearly $500 million (USD) in revenues. Formerly a flat organization with sixteen divisions (but without regions and market sectors), the corporation was reportedly able to structure itself in a manner of days from one into four financial reporting dimensions (market sectors, regions, entities, and cost centers) with accurate performance management, and one-on-one reconciliation with the past reporting structures. Again, where Agresso goes the extra mile is in the unusually tight coupling of its information model, business process model, and reporting and analytics delivery methodology, which enables its customers to make changes like this on the fly, at relatively little cost, and without the usual IT re-architecting that characterizes most competing products.

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