What are Financial Information Systems?
There is no strict definition of what Information Systems for Finance are, but there is a need to somehow define it. The necessity is produced from organizational and process organization of work. Who is the owner, who is in charge for what, who will lead and who will approve, what will be approved? These are everyday questions and to deal with them in a dissent manner financial data and information flow needs to recognized and organized.
There is a strict business need to have experts in Financial Division who have to administrate financial processes like cost allocations, cost centers, cost and revenue categories, accounts, and many more. Someone has to edit figures and this can be only done in departments within Financial Division.
Please, be aware that only being steward and not knowing information processes is not enough anymore. Financial division cannot have comfort in only having financial data stewards without direct knowledge of processes and projects that shape financial systems. This is not a good strategy because it will lose essential knowledge about what do they report, plan, and forecast. Financial experts with sense of IT need to be together with data stewards in ordered to secure maximum quality of financial systems structuring. They are in charge for requirement specification and errorless process running.
This is the main need why it is important to draw line between financial systems and others.
It is a little bit awkward to talk about separate financial information flow while all transaction and operative information systems are interrelated in companies. Everything is connected with everything.
So let’s start to think about financial information systems… that should be all information flows (plus production systems) that contain information sets like revenues or costs, at least elements that are directly related with mentioned financial sets.
Market structured software products that can be relatively easy connected with costs or revenues. First of all these are ERP, Billing, Dunning systems. At the second place, planning (budgeting, forecasting and etc.) processes and systems that support them need to be also placed within financial information systems. IT needs to be guided, not leader in shaping financial processes in information systems.
What about other systems like CRM, SRM and similar? In the perspective of integrative reporting they are also essential for financial operations, but I would say that this data and information are of secondary importance for financial calculations. Therefore they should not be considered as Financial Information Systems.
To conclude, Financial Information Systems are ERP, Billing, Dunning and Business Intelligence systems related with planning, budgeting and forecasting. All other information systems are matter of discussion.