Friday rant - software integration
Software integration is the lynchpin around which different suites of software interact. Sounds great - except when it’s poorly implemented.
For the last few months I’ve been helping a small and struggling cooperative sort out it’s software estate. It’s not going well.
Initially, I thought I’d be streamlining reporting so that the board has timely, usable and (near) automated information. It quickly became apparent that a drains up software estate review was necessary, along with an examination of the processes and controls surrounding their use. Why? Because the manner in which the softwares were being used was clunky, error prone and unnecessarily complex. I knew that because when I first looked at the back office there were numerous ‘odd’ balances.
The firm implemented back office accounting, payroll, several varieties of payment processing, POS and a suite of coworking management systems.
Modern software for smaller businesses is often innovative, designed to allow small businesses to record business activity without the need to understand underlying principles. Magic, right? Sort of.
When implemented well and used appropriately, these modern softwares are massive time savers, often delivering vital information on a mobile device. But when implemented poorly, they can become a time sink. That was evidenced by the fact the admin staff are spending a disproportionate amount of time completing routine tasks. In addition, they’re having to enter (wrongly as it turns out) manual journal entries for things like payroll, cash sales, petty cash purchases, fees incurred in payment processing and invoice matching against booked spaces. And as icing on the cake, admin staff randomly find bank entries that go unexplained.
While I’ve not yet bottomed all the problems it looks very much like a case of ‘a little knowledge is a dangerous thing.’
The emphasis during implementation was always to ensure that everything needed to flow through to the bank, and back out to the back office, worked well. But there were missing pieces that led to the creation of the extra work noted above.
For example, cash drawer functionality needed to verify cash handling was missing. As was automated journal prep for payroll processing. The coworking booking system is great for managing the booking process and generating invoices for cardless payment but lousy for invoice matching in the back office. The back office system generates invoice numbers of its own that have to be checked back against invoices generated by the booking system. There is no direct integration between the two systems. It’s coming in 2023 - allegedly. I’ve advised the board never to believe a software vendor who promises futures. If I have my way the booking system will be replaced. I’ve got an alternative in mind but will need to sell it to the coworking management team.
I don’t think I can fully eliminate some manual processing but I can implement controls to ensure that random entries don’t appear. I can for example ensure there are proper project records so that income and costs are both reconcilable and managed over time. I can also implement simple processes so that the board actively authorises expenditures. This will allow the board to get operational visibility. And…assuming this all works, then and only then can I put in the reporting system needed to replace the crappy spreadsheets currently in use.
Wish me luck, I’ll need it!