In his 2004 book "The Paradox of Choice," psychologist Barry Schwartz argued that the decades-long proliferation of choices in commercial goods and services had led to an uptick in consumer anxiety. This nervousness could take the form of endlessly imagining hypothetical tradeoffs between options, or being pressed to rely on only anecdotal evidence for the sake of expediency when making a decision.
Schwartz's book doesn't really dabble in matters of financial software. However, the main principles of his argument can easily be applied to the challenging process of purchasing new applications for a small or medium-sized business. In addition to age-old programs like Excel and QuickBooks, SMB buyers now have a plethora of new ones to pick from, including hosted solutions as well as cloud-based tools.
What's the best way to cut through this surplus of choice and find something that fits your organization's particular needs? A good place to start is to consider whether sticking with what you currently have could actually make things more complicated in the long run.
The paradox of customization: More choices, less control
Legacy enterprise resource planning tools and spreadsheets are sort of like old PCs that still run Windows XP. You're familiar with them and so you know what to expect, but there's significant risk in continuing to rely on them.
In the case of XP, the potential hazards are well-known, including zero-day exploits as well as general slowness as applications become more sophisticated. With old-fashioned ERP and accounting solutions, the risks can be more subtle but just as detrimental to company growth:
Constantly customizing
Just as aging software needs a lot of security patches to remain usable, traditional on-premises applications can require tons of maintenance and customization. For example, a spreadsheet formula might get broken, or a key feature could be missing from the basic implementation. Given the central role of these tools, a quick, cost-effective fix is ideal but not always possible.
Addressing these problems often takes time and consulting fees that can drain the entire business. There's also the added decision-making of having to determine which consultants to hire and what features to customize. Tiffany Detinne, the Controller of the California Institute of Behavioral Health Solutions (CIBHS), likened her organization's continued reliance on NetSuite to an effective 30 percent hidden tax related to customization.
Papering over manual processes
All of this customization may eventually get the application into a workable form, just as some end users were able to get more out of Windows XP by performing a clean install on suitably fast hardware. The ends don't justify the means in either case, though, especially considering the lost time and money and the inadequate long-term planning.
"Always being in maintenance mode means that there's less opportunity to rethink basic financial processes."
Always being in maintenance mode means that there's less opportunity to rethink basic financial processes - many of which are still manual and error-prone - and ultimately plan out the next phase of growth with confidence. For CIBHS, this situation played itself out as an ongoing need to reconcile incorrectly posted transactions and manually manipulate pivot tables in Excel, activities which between them could consume up to several whole workdays each month.
Searching for needles in the haystack
Going back to the paradox of choice for a moment, it is taxing (in more ways than one) to keep shuffling between so many options while looking to see if any of them has - or, conversely, is lacking - a specific feature. A similarly draining ordeal can take place when trying to reconcile numerous Excel sheets: Does this one have the figure I'm looking for? Is there anything missing from this table? What if this were simpler?
Finding a specific item across spreadsheets and applications is rarely this easy.
Gathering essential data for budgeting and forecasting can sometimes feel like searching for needles in the haystack, due to the number of information sources and the absence of deep integrations between them. With real-time visibility off the table, putting together reports and closing books becomes a long, drawn-out process dependent on unstable tools, manual processes and a slew of customizations.
Breaking through the paradox with cloud budgeting and forecasting software
While we can't suggest an easy solution to the consumer paradox of choice outlined by Schwartz, we can point to one for issues with accounting and financial tools: cloud software. It automatically takes many decisions - about upgrading, support, etc. - off the table so that you can focus instead of keeping your processes accurate and timely.
Switching from Excel, NetSuite or something similar to a platform such as Adaptive Insights provides immediate as well as long-term benefits. The complexity of traditional licensing, lengthy implementations and requisite hardware/software support (not to mention error correction) give way to the simplicity of a SaaS subscription.
Rather than worrying about the next equipment upgrade cycle or setting aside even more cash for consulting on customization, you can get a cost-effective, cloud-based suite of tools managed by a cloud service provider. It's a simple, yet advanced, approach to your finances.