Opinion

Getting into top gear

Finance | Iain Pritchard | 1 Feb 2008

Iain Pritchard advocates the benefits of systems integration.

I’ve started watching BBC’s Top Gear programme. Well, to be completely truthful, my teenage children have started watching it and that means I have to as well, or else get back to the seemingly endless list of things that need fixing or painting or tidying around the house.

It’s a different programme now from how I remember it from years ago. It seems much slicker, and at least as much about light entertainment as about power-to-weight ratios and leather trim. A couple of weeks ago one of the items did get my attention and it reminded me of some conversations I’ve been having with charities about systems integration. They were talking about the relative merits of four-wheeldrive (4WD) compared with other ways of moving cars along. The main thing about 4WD (according to Jeremy Clarkson) is that it combines rear-wheel driven power with the control you get from pulling a car along from the front.

That made me think about the way management information travels through an organisation and, in particular, the relationship between a charity’s database package (driving information from the back) and the corresponding accounting software (controlling the direction of the organisation at the front).

Most charities today use separate database and accounting software. Understandably, the needs of a membership manager or a fundraising team are different from those of a finance department. The different systems each have their respective strengths and both can help drive a charity forward. What links them, where they share a common interest, is in the provision of reliable and up-todate information.

Managers in membership and fundraising need good information; so do finance managers, and, as we all know, managers in every part of the organisation should be making decisions based on the same accurate and timely reporting. The findings of this issue’s survey of accounting software showed that while over 80 per cent of participants described the functionality of their accounting software as “good” or “very good”, over half also described its integration with other systems as “average” or “poor”.

At this point, it is probably worth clarifying just what is meant by integration. Definitions vary and what most people call integration is often just a set of programming standards that allow information from one system to be transmitted to another. That isn’t integration but a description of a transaction file or an interface – ie. the mechanism by which financial data is pushed out of a database at the back or pulled into the nominal ledger by an accounting system at the front.

There’s no pushing or pulling with integration; it’s a dynamic process where the software in one system understands and can use the information and processes in another; where, for example, the operation by which an individual is booked on an event causes a entry to appear against their record in the database and a corresponding invoice to be raised within the order processing module in the charity’s accounting package.

So, if integration is such a good thing, why do most charities struggle on with separate systems that don’t work together? One answer is that, historically, there haven’t been many database or accounting packages offering true integration but that is changing.

The other reason, though, is that there has traditionally been a perception, in finance departments particularly, that separate systems work just fine, thank you very much. In fact, better because, as many heads of finance will say in private, they can rely on the information in their accounting system, but they can never really know what people are doing with databases. However, there may not be a choice for much longer. The demand for closer systems integration is being driven by the internet as, increasingly, members and supporters look to charities for the same integrated experience as when they buy tickets for the cinema or order the weekly shopping.

The 4WD of systems integration may not be everyone’s first choice but, as Jeremy Clarkson might say, on the information superhighway it may be what members and supporters are expecting to see. 

Iain Pritchard is a partner at Sayer Vincent and leads on consultancy engagements involving information systems and technology

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