Bring IT to account

Software can still help cut costs and raise efficiencies, says Alan Smith

Smith: The right software can improve efficiencies

As enterprise application software is used more to automate complex business processes, mission-critical operations become more reliant on the people who operate IT systems.

Having waved goodbye to the manual checks and balances that used to record and audit business transactions, auditors and compliance officers are demanding that IT be accountable.

Mergers, acquisitions, company restructuring and new IT applications mean end-to-end processes are more complicated. It is often unclear how the constituent processes, and the steps within each process, are linked together.

Business process management and advanced application integration technologies help automate the exchange of information between disparate systems.

Process flows can be mapped with conditional dependencies embedded to ensure that multiple paths are supported and all eventualities can be catered for.

External business events, such as daily sales information from retail stores being transmitted to head office, can automatically instigate internal IT processes.

Checking information from output reports against field values in database tables can help companies make better decisions.

Controllers need to understand how all their core business processes are performing. These may not be issues until something goes wrong. A business-critical process, such as the month-end close of accounts, taking too long to run or failing to complete can be dangerous.

The risk management and compliance initiatives introduced with Basel II and Sarbanes-Oxley seemed distant memories in the wake of the recent troubles in the global financial services sector.

Guarantees and assurances previously established were barely worth the paper they were (not) written on. Greater transparency and more rigorous controls will satisfy external stakeholders, such as national governments.

Organisations are still learning that when taking people out of processes, they must still account for the actions of their systems.

Where software controls corresponding processes, auditing will be required for all IT activities and not just those performed inside individual stove-pipe applications, such as ERP or CRM systems.

Retrospectively manipulating and reporting on IT actions will not be sufficient if auditor certification of business operations is required.

IT departments need to establish and maintain an ongoing record of all business activities. Precise details of who did what, where and when need to be captured.

With fair and accurate records, auditors will have something on which they can rely.
Automating and streamlining business processes can be profitable. Speeding up the transition of orders into a company’s financial systems and customer invoice generation will improve cashflow.

More efficient tracking of project performance against forecast data will help ensure that projects are completed on time and under budget, while avoiding penalty payments.

Auditing processes also give IT operations a tool for analysing and optimising workload. Historic audit files automatically archived to long-term storage can be retrieved and processed alongside recent performance data for trend analysis and capacity planning purposes.

IT management becomes better informed and can respond more strategically when advising on how technology can support business growth.

IT process automation technology should be key to an organisation's compliance and risk management strategy. Automation assists best-practice execution of critical processes, increasing reliability and reducing risk and overheads.

Acquisition of additional computing resources can be avoided, or at least deferred. Companies can get more from their existing resources through more efficient workload balancing and removing inherent latency, such as idle times occurring while a system waits on user input or file transfers.

We have read that up to 80 per cent of the annual IT budget for many organisations is spent on maintaining their current systems.

Alan Smith is senior vice president for UK and Ireland at UC4 Software