Managing your company’s finances is difficult enough, but using outdated financial IT systems makes things even more difficult. But how do you know when it’s time to ditch your old software and tackle an IT migration?
In this article, we’ll cover everything you need to know when weighing a financial IT migration, from the pros and cons of keeping your legacy system to managing changes when it’s time to upgrade.
Challenge the status quo of financial IT systems
If you’ve been using an IT system to manage your business finances for some time, making a change can seem like a lot of work to balance with the risks and potential benefits of an upgrade.
However, the reality is that if you continue to use a system that you have outgrown, you could be handicapping yourself and your business without even realizing it.
Technology is evolving rapidly and with the advent of AI and machine learning, modern financial IT systems are smarter and more powerful than ever before.
A system that was right for you a few years ago may now be missing features and functions that could make your and your colleagues’ daily work much easier.
Performing a cross-system IT migration is never as easy as flipping a switch. You need to invest time and resources into the process, cleaning and migrating data, integrating with other tools, and retraining employees.
But for businesses to remain productive and competitive in today’s fast-moving market, it is important to assess the potential benefits and ROI that can be achieved by implementing a new platform.
How do you know it’s time for change?
You understand the benefits of migrating to a new financial IT system, but how do you know if the time is right to make the change? If you think your financial software is holding you back, there are signs you can look out for. Find out whether you’re ready to launch a new IT migration.
- Your financial system is slowing you down
Regular outages and slow processing speeds negatively impact your productivity, prevent you from getting things done, force you to spend time troubleshooting, and result in a frustrating user experience. Plus, you have to manually perform the same basic tasks over and over again.
- Maintenance and support costs are high
Your expenses for maintenance and support for your outdated technology continue to rise, and frequent repairs indicate that the system is becoming a financial burden.
- There were near misses in the areas of security and compliance
The inability of your system to keep up with current cybersecurity threats and regulatory requirements exposes the organization to significant risks — you may have already experienced a cyberattack or data breach.
- You find it difficult to make your system work with others
They faced challenges integrating the legacy financial system with other applications, leaving them unable to access the data they needed and creating data gaps with low visibility. Your teams may rely too heavily on inefficient data storage methods like spreadsheets, resulting in hours or even days of additional work to consolidate that data into useful reports.
- You cannot make changes to meet business needs
Your inflexible financial system means you can’t scale or adapt to changing business needs, such as facilitating remote work, developing a new type of report or dashboard, or changing the way you process expenses, for example.
Why migrate to a new financial IT system?
There are a variety of reasons why now is a good time to migrate to new financial software. However, the main reason for many of these reasons is the enormous amount of change we have experienced in recent years.
The technology has changed. The way we use data to make decisions has changed. Customer behavior and expectations have also changed.
To keep pace with these changes, companies need software that helps them do more while providing scalability, security and cost-effectiveness.
Here are just a few reasons why the modern financial software platforms on offer today can help you achieve better results and higher ROI – and why now is the right time to migrate your financial IT.
Advanced technology
Developments such as cloud computing, AI and machine learning, and robotic process automation (RPA) bring tremendous benefits to modern financial software systems, helping you make faster and smarter decisions, automate repetitive tasks, and take advantage of more flexible, scalable, and cost-effective infrastructure.
Improved security and compliance
Modern financial systems have advanced cybersecurity features such as multi-factor authentication, encryption and real-time threat or outlier detection to protect your business from increasingly common and sophisticated cyberattacks.
Today’s systems are also designed to help you keep up with evolving data and privacy regulations with features like automated compliance monitoring and reporting.
Greater cost efficiency
Modern financial IT solutions are typically cloud-native and based on a software-as-a-service (SaaS) model, reducing maintenance and servicing costs as well as acquisition costs. Additionally, automation and smarter workflows free up time and resources needed for routine tasks. This saves you time and money – and you can ultimately concentrate on creating value.
Scalability and flexibility
The cloud-based nature of these new financial systems means they can easily scale to meet business growth and changing market needs. This also makes them more flexible and easier to integrate with other business management systems such as ERP or CRM software.
This gives your finance leaders a more complete picture of the company and helps improve company-wide operations.
Better user experience
Newer financial systems are designed to be accessible and have user-friendly interfaces and features that make it easier for you, your team and your colleagues to use them. Some solutions also include IT migration and training support, as well as educational resources.
Many can also be used on mobile devices, so you can get things done on the go, no matter where you are.
Data-driven decision making
Gain deeper insights and make more informed strategic decisions thanks to the advanced analytics and real-time reporting capabilities built into modern financial systems. This means you can forecast more accurately, create smarter long-term plans, and adapt faster to stay ahead of the competition.
Competitive advantage
Companies with newer financial IT systems have more tools to help them drive innovation and respond more effectively to market changes. This modern technology also helps companies meet modern customer expectations for fast service, transparency and personalized experiences.
Disaster recovery and business continuity
Over the past few years, you may have seen firsthand the importance of business interdependence. Modern financial systems offer enhanced disaster recovery options and business continuity plans, minimizing the risk of downtime and disruption.
And with cloud-based solutions, you receive regular and automated data backups and are therefore better protected against data loss.
The pros and cons of sticking with outdated IT systems
Still unsure about migrating to a new financial IT system? Let’s take a look at some of the pros and cons of continuing to use your legacy software.
Using a Legacy Financial IT System: The Benefits
Familiarity and stability
Your employees are already familiar with the system and require minimal ongoing training. And while your old financial system may not be up to date, it’s probably stable and reasonably reliable.
Cost considerations
By continuing to use your legacy system, you avoid potential costs associated with migrating to a new system, such as: B. purchasing licenses, implementation support and training costs.
Adjustments
Your legacy system may have been adapted over the years to meet your company’s changing financial needs and workflows, and may have deeply integrated processes that may or may not be able to be replicated without disruption to your operations.
Regulatory Compliance
If your legacy financial system has been in use for a long time, you probably already have compliance processes and reporting mechanisms in place that have consistently reduced your risk of compliance violations.
The result is that with an outdated financial IT system, you know what your limitations are and have probably already taken countermeasures. But is it really the most efficient and cost-effective way to keep going in a future that is changing too quickly?
Using an old IT system: The disadvantages
Unnecessary costs
Using outdated financial IT systems can result in a lot of unnecessary expenses. Expertise in legacy hardware or systems needed for maintenance and support, for example, can be costly.
Unpatched vulnerabilities or inadequate security features in legacy systems can lead to costly data breaches and non-compliance fines. Operational inefficiencies can create bottlenecks and impact productivity and potential ROI.
Poor and slow integration with more modern applications creates data silos that may require expensive workarounds or manual data processing.
These costs add up and can easily end up outweighing the savings you could achieve by foregoing a system upgrade.
Security and compliance risks
Technology providers often reduce or even eliminate support for legacy systems. This makes it harder to get necessary updates, patches, or support when things aren’t working as they should.
Older systems may struggle to adapt to new regulations and laws, increasing the risk that your organization will be unable to meet necessary compliance requirements.
Most importantly, if your software is not fully supported, you are exposed to cyberattacks and data breaches that specifically target such vulnerabilities.
Integration problems
Interoperability is the key to a complete picture of your company and its finances. However, legacy financial systems often have poor interoperability with modern applications and cutting-edge technology, resulting in sophisticated data silos that cannot consolidate information from across the organization.
This obstruction to data flow also prevents you from accessing advanced analytics and real-time reporting.
Innovation and competitiveness
Older systems tend to lack newer features like AI, machine learning, and advanced analytics, all of which can provide important business insights and efficiencies. This puts you at a competitive disadvantage and risks falling behind competitors who use these technologies to make faster, more informed decisions.
Managing the changes that come with IT migration
One of the biggest challenges when migrating to a new financial IT system is not data transfer or configuration; It’s about dealing with the change that comes with it. Change is truly the only constant for businesses today, but it can still be difficult to manage.
Disruptions to day-to-day operations can impact productivity and service delivery and lead to internal and external frustration. Migration often requires financial investment and resource allocation, which can divert focus from other areas.
Employees who are used to a legacy system may be hesitant to migrate because they are uncertain about the new platform’s features or fearful of learning new skills. Eventually, people get used to doing things a certain way, even if those methods or tools aren’t the most efficient.
And perhaps most of all, change carries the risk of failure, as technical issues, data loss or unsuccessful implementation can lead to a natural caution in migration projects.
Still, there are many things you can do to successfully manage change, and preparing your organization thoroughly early on can make the transition easier.
Here are a few things you can do to ensure your financial IT migration goes smoothly:
- Get people involved early: Engage both key stakeholders and everyone who will be using the new system in the early stages of the IT migration project and collect feedback on their needs and concerns. This helps them participate in the decision-making process, builds support by creating a sense of ownership, and reduces resistance when the system finally goes live.
- Plan everything: Create a detailed financial IT migration plan that includes timelines, resource allocation, risk management strategies, and contingency plans to help you stay ahead of potential challenges and address them more effectively. The more you can mitigate the negative impact of software migration before it happens, the more people will embrace it.
- Keep in touch: Maintain consistent, open and transparent communication throughout the IT migration process. Keeping users informed about the reasons for the change, the benefits they will enjoy, and the impact on their roles will alleviate much of their concern. You should also be regularly updated on the status of the project so that there are no surprises.
- Build user trust: They must provide thorough training and ongoing support to help employees adapt to the new financial system. High-quality training based on user needs and tailored to their individual abilities reduces anxiety, increases confidence and promotes acceptance.
- Walk slowly and steadily: Modern financial IT systems can be extensive and complex. Therefore, it is often a good idea to introduce a new system in phases, initially focusing on less critical modules or introducing it to small parts of the organization initially. This phased (or pilot) approach to migration allows you to troubleshoot and make adjustments before full implementation.
Final thoughts
Regardless of how well they have served you in the past, it is an inescapable truth that many legacy financial IT systems are no longer suitable for use in modern businesses.
Technology is constantly advancing and offering new possibilities. The longer you stick with the status quo, the further behind your company will fall.
When you upgrade your system to a modern, feature-rich solution like Sage Intacct, you can save time through automation, make faster and more informed decisions with advanced analytics, and achieve greater ROI.
It also helps free employees from the unnecessary burden of manual data entry and frees them up time for strategic decisions, resulting in a better work-life balance as an added bonus.
While migrating to a new system may seem like a big undertaking, those who make the switch will benefit not only today, but also in the future.
