Current State Assessment
A Current State Assessment establishes the baseline before a transformation begins. Teams document how transactions are initiated, processed, approved, recorded, reconciled, and reported. The assessment should capture the systems involved, ownership, handoffs, control points, data requirements, and meaningful exceptions.
- Process activities: Record the actual sequence of tasks and decisions.
- Systems: Identify ERP modules, spreadsheets, applications, integrations, and data repositories.
- Roles: Document who prepares, reviews, approves, posts, reconciles, and monitors transactions.
- Controls: Capture approval rules, validation checks, segregation of duties, and audit evidence.
- Performance: Establish relevant measures such as processing time, transaction volume, exception rates, and reconciliation effort.
The objective is an evidence-based baseline rather than an idealized description of how the process is supposed to work.
Designing the Future State
The future state translates business requirements into a target process. It defines how activities should flow, which responsibilities should change, what technology should support the workflow, and which controls should remain or be redesigned.
A Future State Operating Model provides a broader view by defining the target structure for people, processes, technology, governance, and service delivery. It helps ensure that a redesigned finance workflow fits the organization's wider operating model rather than improving only one isolated activity.
For more detailed planning, Future State Scenario Modeling can be used to examine how proposed processes behave under different transaction volumes, business conditions, organizational structures, or technology configurations.
Comparing Current and Future Processes
The comparison becomes useful when teams place current and future workflows side by side and identify the changes required to move from one state to the other. These changes may involve process sequencing, approval rules, data structures, system configuration, integrations, or ownership.
For example, a procurement process may currently require separate requisition entry, email approval, manual purchase order creation, and spreadsheet tracking. The future state might connect requisition approval, budget validation, purchase order creation, receiving, invoice matching, and accounting within an integrated workflow.
The purchase order stage should therefore be evaluated as part of the complete procure-to-pay process, including sourcing, approvals, spend controls, receiving, and downstream accounting rather than as an isolated transaction.
Tax and Compliance Process Changes
Current-versus-future analysis is especially useful when tax rules or transaction data requirements change. A current workflow may rely on manual jurisdiction checks, while the future state can define systematic validation of location, nexus, exemptions, tax rates, and supporting documentation.
For organizations operating across multiple jurisdictions, sales tax processes should be mapped from transaction data through tax determination and accounting so that destination information and applicable local rules are represented in the future workflow.
The same analysis can support broader tax compliance requirements by documenting how rate changes, nexus assessments, exemptions, audit evidence, and jurisdiction-specific reporting will be handled in the target process. Teams can also evaluate use tax procedures where purchases require separate tax validation or accrual treatment.
Data, Controls, and Transformation Priorities
Moving from the current state to the future state requires explicit attention to data and controls. Teams should identify which master data, transaction fields, approval rules, and historical records must change or migrate. Control objectives should be preserved even when process steps or systems are redesigned.
Procurement transformation provides a practical example. If the current process creates duplicate purchase requests across cost centers, a future-state control can include Duplicaton Check, which checks current inventory and existing purchase-request data to identify duplicate requests before they progress through the workflow.
Transformation teams should document each material difference between the two states, assign an owner, and connect the change to a requirement or business outcome. This creates a traceable roadmap from assessment through implementation.
Using the Comparison for Business Decisions
Current-versus-future analysis supports decisions about ERP configuration, process redesign, automation, organizational responsibilities, and control improvements. It also provides a common language for finance, operations, technology, and implementation teams when deciding which changes should happen immediately and which require additional preparation.
A practical comparison should answer four questions: what happens today, what should happen in the target state, what must change to get there, and how will the organization confirm that the change delivers the intended result? Connecting these questions to financial reporting, operational efficiency, compliance, and business performance makes the comparison actionable.
Summary
Current State vs Future State provides a structured way to compare existing business processes with their intended target design. The current state establishes an evidence-based baseline, while the future state defines desired workflows, controls, responsibilities, systems, and outcomes. Used together, they help organizations plan ERP transformations, redesign finance processes, strengthen compliance, and align operational changes with measurable business performance.