| How to conduct a “Business Needs Analysis” (BNA) when evaluating new accounting software |
| (Evaluating & Choosing Accounting Software) | |||
| Friday, 23 September 2011 21:48 | |||
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How to conduct a “Business Needs Analysis” (BNA) when evaluating new accounting software
Your client is considering implementing new accounting software.. however, before they even look at specific solutions and start “kicking the tires,” or even defining their specific technical requirements, convince them to conduct a Business Needs Analysis (BNA). This is the exercise of trying to figure out the overall business requirements before defining the specific technical requirements of a new accounting system, and the outcome of this analysis is used to formulate and define their software requirements (covered in this previous ASN blog: How to define requirements when choosing a new accounting software). Before you go and buy a new vehicle, and even start to look at technical specifications, you define your needs: work use, family use, recreational use, mileage, maintenance, etc. Why wouldn’t you do the same when selecting new accounting software? So, before your client gets overwhelmed with a plethora of software choices, help them narrow down their choices by first: 1. Reviewing and defining their strategic and tactical goals that will influence the specific technical requirements of their new accounting software. Some areas to review and define include: a. Market share goals b. Revenue goals, and associated costs c. New product line(s), and their associated costs (capital and expense) d. Overhead costs e. Integrating with larger vendors and customers that use EDI (electronic data interchange) for moving sales orders, purchase orders and invoices electronically. f. Owner’s equity/shareholder value goals 2. Once these are clearly defined, you can help your client expand on them to determine the specific technical requirements of a new system. a. Defining market share goals, revenue goals, new product line(s), and their associated costs (capital and expense) will help determine the volume of future transaction activities, which then defines how ‘robust’ the new software has to be. Sage 50 (formerly Simply Accounting) is fine to get started with, but won’t handle complex and integrated ERP activities of a $10 million/year light manufacturer. b. Defining revenue goals and their associated costs means that the software will need to have strong budgeting features with comparison reporting between budget vs. actuals. c. Defining, and budgeting, overhead costs will mean that the software will need an “allocations” feature that assigns overhead costs to departments, products and projects with a few clicks, instead of manually. d. Functionality requirements like e-Commerce, vendor portals, courier integration, etc. will also come into play, informing the selection and evaluation process of the future scalability needs of a new system. e. Defining owner’s equity/shareholder value means that the software will need to have strong reporting tools that can create pro forma balance sheets, income statements and cash flow reports. With pro forma reports, drill down features will enable the company to translate balance sheet goals all the way down into very specific goals, and the associated tasks that will deliver them. Although you and your client may not know how these factors correlate to the different systems available, your vendor should; and also be prepared to translate your business needs into system requirements. Don’t let your clients jump straight into looking at software. Walk them through a logical process that builds up from their overall business needs first. You’ll help them overcome frustration, and save a lot of money in the long run; money that might have been wasted choosing the wrong software, and experiencing a poor implementation (because it was the wrong software). They’ll definitively thank you for it!
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