By Adam Bluemner of www.FindAccountingSoftware.com
Adam Bluemner is the Project Specialist Manager with FindAccountingSoftware.com, a company specializing in helping businesses find the right software for their needs. In his free time, Adam avidly follows his favorite Wisconsin sports teams and is working on convincing his daughters to do the same.
One of the most common questions you may face when considering a software change is whether or not you should replace your entire accounting system. Should you purchase a new, full software system? Or should you instead extend the functionality of the current system with an add-on program? The answer of course depends on your needs and your unique scenario. Understanding a bit more about the topic of software integration, though, can help you make the decision.
The word integration is often used as if it refers to one exact thing. The reality is that there are many degrees of integration. At the most basic level, one of the most important aspects to consider is whether integration will be "real-time" or not. As opposed to real-time integration, batch integration, on the other hand, allows the export of normalized data from another module, but it is only done periodically. There are obvious limitations to batch integration. Depending on your needs, these limitations may be prohibitive.
Consider the case of a company who sells both directly and through an ecommerce portal. Imagine the two sales channels process transactions with different software and the updates to inventory counts are done in batches. The problem that may arise is that inventory that has already been committed to one customer may end up being resold. This is a stark example. But it does demonstrate a major challenge when integrating add-on software--namely, keeping data synchronized and up-to-date.
There are a number of key questions you'll want to ask providers when considering integrating a third party add-on:
- What is the underlying database for the add-on software? (Does it match that of the core system?)
- Is real-time integration possible?
- If integrating in real-time, how does the software solve issues like managing concurrent updates to common data from the two systems?
- Has your company handled this specific integration before? (And, how has it turned out?)
One of the reasons you may be investigating extending functionality with an add-on program is price. Certainly, one major advantage of purchasing a 3rd party add-on is that it will be a fraction of the upfront capital expenditure of a full new system. However, there is more to the price equation to consider. Normal software version updates to one or both of the integrated systems may necessitate updating the integration as well. This can introduce ongoing costs. Often to avoid these costs, companies will stick with a certain software version. There are costs to this as well. Aside from missing out on the introduction of beneficial features, it may prevent access to important bug fixes and security patches.
The advantage of purchasing a complete accounting system when it comes to the integration issue is a bit clearer. With a complete system, you are working with a set of modules inherently designed to work together. Modules can easily share access to common database tables, permissions can be managed centrally, and there is consistency in the GUI (general user interface) making it easier for employees to learn and use the software.
While purchasing a full, new accounting system may be more expensive upfront, often when the complete costs and benefits are evaluated, it is the better value in terms of ROI. Whether or not this is the case for you will of course depend. Understanding and exploring the different aspects of potentially integrating software should help to give you a better basis to make the decision.