This week I give the most brief set of criteria I can think of for ledger evaluation.
Ledgers give us information in the form of balances. The number of balances it can maintain and the speed with which it can maintain them is a good measure of the richness of the information it can provide us.
The number of balances a ledger can maintain is a measure of the number of questions that can be answered by it. If a ledger can maintain one balance, it can answer one question. If it can maintain a million balances, it can answer a million questions.
The update cycle is also important though. If it takes a year to update the 1 balance, that’s not going to be very helpful. If it could update a million balances in 1 second, that’s going to be a lot of information.
So my quick evaluation of the most important aspect of a ledger would be
- How many balances it can maintain
- In what period of time
- And since in financial processes we often generate new transactions from ledger balances, I might also add the number of transaction that can be generated from those, and re-applied in the posting processes.
A more detailed discussion of ERP systems can be found beginning with this post on ERP Selection for the next few blog posts.
Watch all episodes in order at the Conversations with Kip Playlist