The current economic environment requires a successful business to operate smarter, more efficiently and seamlessly which has lead to initiatives like business process improvement, workflow reengineering management and balanced scorecard. The initiatives and best practices implemented to achieve these objectives in many organizations have lead to the drastic change in IT. IT has gone from solely technical solutions to integrated business analysis and process optimization; and can almost be described as a function of both HR and Finance. Specifically when it comes to automating workflow; workflow in general, can be linked to an information system allowing management to realize the impact of production decisions can be determined immediately, organizations are seeking actionable information upon which to implement into strategy and effect decisions.
Information flow within systems is dependent on the desired end result, the business model and ultimately, the system design. The Kuali Financial System, KFS was developed as an alternative solution to off the shelf ERP for the demand of higher education institutions to implement a robust financial system that could be used in conjunction with legacy and other nonfinancial systems. Bringing together data from nonfinancial and other legacy systems was key to initiating and administering transactions. The Kuali financial system as described in an article by Kathleen T. McNeely and Mary S. Wheeler (2006):
The system’s overall design is based on a higher education business model. The data structures, transaction interfaces, and back-office processes are built to accommodate how higher education institutions are structured. However, there is sufficient flexibility in the design for each institution to tailor the system to its needs without requiring major modifications. Use of web portals means that transaction interfaces can be tailored to specific types of users, and the workflow engine provides significant flexibility for routing and approvals. A college or university implementing Kuali can plan to do as much or as little re-engineering as it chooses; changes won’t be forced on users because the system was built on a manufacturing or health care business model, for example. Consider the merits of the system and how your institution might benefit from Kuali’s shared approach.
Horizontal and Vertical Information Flow; Downward Information Flow
The Kuali financial system design is a dynamic distributed system that allows many users in different roles to interface and enter data. The users’ roles are defined in a hierarchy table as well as their access. The user is able to enter a data into a transaction document or edoc, as defined by the Kuali organization. The edoc is then routed to the appropriate level for approval. This is an example of horizontal and vertical information flow; the administrators, financial officers, or approving role would make up the horizontal flow with the vertical flow being the end user or the processors doing the data entry into the system. Past transactions can be retrieved and made into templates or reversed if necessary. A new feature allows initiators to upload values into transaction documents (edoc) from predefined spreadsheets enabling the use of the spreadsheet functions such as sort, sum and copy.
The KFS has a flexible chart of accounts that allows the entity to define the data, attributes, and if necessary, the relation of the data to their legacy systems or other systems. This is table driven data; Kuali will deliver global maintenance tables, facilitating the association of new attribute values to existing data in user-defined groups. The extended attributes also permit users to include concepts that may be contained in other nonfinancial systems, such as student records or human resources. This will allow financial and nonfinancial data to be linked, a feature that is especially appealing with the current reporting environment focused on managerial analysis and decision support. Finally, all of the Kuali data structures are designed to be understood by the casual user, with definitions and explanations contained in an accessible data dictionary (McNeely & Wheeler, 2006). Organizations and business units define different values in their tables, so that the system is not driven specifically on cost accounting attributes or defined by revenue, expense and COGS. There is a large number of data values available for units to classify transactions for internal financial management, these attributes can be tracked as well as auxiliary data allowing administrators to prepare balance sheets, track expenses, income statements for any organization or business unit. There is an unlimited hierarchy of workgroups that relate to higher level organizations.
The system is designed for collaboration between organizations and departments, for example, the inflow or data being entered into the chart of account is defined as units and can have attributes that will make it traceable to certain projects if necessary and also makes it so that it can be tracked within the system. The outflow would be the financial reporting, with quarterly or end of year financials that are prepared based on the data being entered. Depending on the user role and access the transaction is entered and then routed to the appropriate person for approval, which then hits the books. The automated workflow is enabled by the defined users and roles. Every account has a fiscal officer who is responsible for the accuracy of the account – this is enforced through the approval process. The workflow engine is set up so fiscal officers can also delegate approval authority to primary and secondary users; an organization can specify additional routing requirements for some or all transaction documents which can also accommodate the need for special routing or approval for dollar based decisions. Additional functionality includes Ad hoc routing of approval; for instances where staff may be minimal and the need to temporarily change routing as well as the capability to route for FYI purposes. Routing rules are configurable at unit level. The KFS provides a single “actions list” for the user to log into to approve all transactions. Workflow provides an audit trail of approved transactions and dynamic configuration that can be changed quickly and systematically applied. The system is flexible based on business needs.
Kathleen T. McNeely and Mary S. Wheeler, A Flexible Financial System, Business Officer Magazine, (February 2006) last accessed 06/06/09 at: http://www.nacubo.org/Business_Officer_Magazine/Magazine_Archives/February_2006/A_Flexible_Financial_System.html