InformationWeek

Better Systems, Brighter Numbers

Client-server software is improving financial accounting

By Doug Bartholomew
Issue date: Feb. 27, 1995

Paper invoices are out. So are the adding machines that populate the desks of accounts-payable clerks. Spreadsheets are still OK--barely. The new wave is data access tools that blend integration and globalization.

If you guessed the subject is financial-accounting systems, you're right. The worlds of the accounts-payable manager, the director of purchasing, the corporate controller, and yes, even the chief financial o fficer, are undergoing tremendous upheaval.

Nearly half of every dollar spent in today's multibillion-dollar worldwide financial-services market is earmarked for client-server accounting systems. Businesses respond to demands for immediate access to information that once took days--or even months--to pull together.That's why InformationWeek has teamed with consulting firm Price Waterhouse LLP to analyze these technologies. (For the exclusive Price Waterhouse report, "Transforming Financial Functions," click here)

Saving Time
The typical corporate accounting system now lets financial officers and analysts obtain cost data at a moment's notice, helping them make better-informed decisions.

At Diamond Shamrock Corp., timely reporting of profit and expense information is the reason why the $3 billion petroleum refiner turned to client-server software.

In January, the company went live with purchasing, accounts-payable, and capital-pr oject costing systems from Lawson Software in Minneapolis. The packages run on a Sun Microsystems SparcServer 1000 and a Sybase relational database management system (RDBMS) connected to 486 PCs.

"It was taking too long to get a check out the door," says Shannon Ramsey, Diamond Shamrock's accounting systems manager. "Fifteen working days to close the books at the end of the month and another 25 days to close the annual books is too long." With the client-server system, Ramsey expects to cut reporting times by five to 10 days.

Other companies are using client-server financial software to change their business processes. Transport Canada, the government's transportation agency where 20,000 employees manage airports and rail lines in all 10 provinces, is integrating two separate financial functions-procurement and payment. "We're using software as an enabling tool for changing our business processes," says Walt Beazley, systems director general at Transport Canada.

The agency runs its financial system on a Digital Equipment Alpha 7000 Model 610 server running Open VMS at its Ottawa headquarters. Regional offices use Digital's Applications 400 servers running SCO-Unix and the Oracle 7 RDBMS.

Best Of Breed
Lawson and Oracle--the packages that Diamond Shamrock and Transport Canada use--represent one class of client-server financial software. These products help businesses integrate their financial functions. Other software developers take the opposite tack and provide niche, or so-called best-of-breed, solutions.

One such developer, SQL Financials International Inc. in Atlanta, differentiates its software on the basis of functionality. "Our buyers are looking to take the best-of-breed approach, rather than try to fit an all-encompassing package to their business," says SQL Financials president Joe McCall. The company offers two key programs: Document Manager, a report repository that sits on a separate database server, and Task Manager, designed to schedule the transactions that an accountant must handle.

These best-of-breed software programs may be attractive to some businesses, but reporting and analysis tools are the features that CFOs and other financial department staff members want most, according to a 1995 survey of 220 financial executives by consulting firm Deloitte &Touche LLP and IMRS Inc., a Stamford, Conn., financial-software developer.

Indeed, financial reporting is a key reason why Allmerica Financial, a $4.5 billion insurance and financial-services firm, replaced aging Dun &Bradstreet Software general ledger and accounts-payable software for mainframes with client-server software from PeopleSoft Inc. in Walnut Creek, Calif.

Allmerica in Worcester, Mass., plans to give more than 600 workers using 486 PCs access to PeopleSoft general ledger and accounts-payable systems using an Oracle RDBMS, on a Sun SparcServer 2000.

Bill Kessler, Allmerica's financial-systems project manager, likes PeopleSoft's financial consolidation routine. "If you do a rollup of financial data and the organization has changed, you can still go back and see what all the numbers would have looked like before the change," Kessler says.

For Corporate Software Inc., a Norwood, Mass., PC software reseller, linking multiple business functions-including financials, distribution, and human resources--was important.

The company chose financial-accounting software from German supplier SAP AG. "Our selection was driven by the need for an integrated solution rather than by the financial application," says Randy Burkhart, Corporate Software's senior VP for technology.

SAP's R/3, which runs with Oracle or Informix RDBMSs, uses one large centralized database. That means inventory, accounts payable, and accounts receivable operate from the same raw data, and company information can be updated simultaneously.

Nearly all client-server packages run on a Unix operating system against a Structured Query Language (SQL) database. Financial-systems code can be in one of three places: on the PC client; in an accepted programming language such as C or Cobol on the applications server; or as a stored procedure on the database engine.

Global Corporation
While a smattering of computing environments support Mac or Motif clients, most systems are tailored for PCs that run DOS or Windows.

Most products today are geared to the global corporation. "Our clients typically deal with multicultural, multicurrency, multilanguage requirements," says Paul Horowitz, the partner in charge of client-server development at Price Waterhouse in New York. Financial managers need to consolidate financial results from dozens of far-flung units and offices.

Perhaps the most important trend in business technology is giving more employees the ability to tap financial data to measure and plan activities, performance, or business decisions. "Many organizations want to push processes and data out closer to line management," says Jeff Comport, research director at the Gartner Group Inc., a consulti ng firm in Stamford, Conn.

Midland Pipe Corp. selected a software package from Ross Systems in Atlanta for just that reason. Midland, a $70 million Metairie, La., pipe manufacturer, is a test site for Ross's Renaissance client-server software.

Midland runs Renaissance on a Digital Alpha 2500 server using Open VMS, and its 16-member accounting staff accesses the system on Digital 486 PC-XL workstations. "We wanted to put the tools on the desktop to give people access to the information they needed," says Frank Cangelosi, VP of finance. "Now they don't have to run down the hall to get a spreadsheet."

For the same reasons, the United Grain Growers of Canada, a Winnipeg agribusiness that buys grain for the Canadian Wheat Board, bought D&B Software's FinancialStream Analyzer data-access tool. "Our main objective in going to client-server is to have both better information and easier access to it," says comptroller Keith Minaker.

Officials at the $1.25 billion (U.S.) company like the way D&B So ftware's SmartStream helps nontechnical users build bar graphs and charts. Each of the company's 250 grain elevator sites has its own Hewlett-Packard 9000 server with up to 10 486 PC clients.

Industrial-Strength Software
Users and software makers are seeking industrial-strength financial packages. "This is the real battleground today--to prove your software can handle high volumes of users and transactions," says Brian Sommer, a partner and worldwide director of software intelligence at Andersen Consulting in Chicago.

Admittedly, client-server financial systems are still in their infancy. "In the future, enhanced functionality will make a difference," says Scott Kaufman, managing partner in charge of the technology knowledge organization in Price Waterhouse's St. Louis office. That means packages will offer deeper functionality that will help businesses obtain strategic advantages over one another.

When financial systems provide what turn out to be truly competitive tools, the e ntire nature of the financial-services industry will change again. The corporate accountant will be neither paper-pusher nor proficient PC user, but the most critical member of any company's strategic team.

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