Managing your business’ finances is difficult enough without making things even harder by using outdated financial IT systems. But how do you know when it’s time to ditch your legacy software and take on an IT migration?
In this article, we’re going to cover everything you need to know when weighing up a finance IT migration, from the pros and cons of sticking with your legacy system, to managing change when it’s time to upgrade.
Challenge the status quo of financial IT systems
When you’ve been using an IT system to manage your business finances for a while, making a change can seem like a lot of work which you have to juggle with the risk and potential benefits of an upgrade.
But the reality is that by continuing to use a system that you’ve outgrown, you could be holding yourself and your business back without even knowing it.
Technology develops quickly, and with the advent of AI and machine learning, modern finance IT systems are smarter and more powerful than ever.
A system that was the right fit for you even a few years ago may now be lacking in features and functionality that could make your day-to-day work, and that of your colleagues, so much easier.
Performing an IT migration across systems is never as simple as flipping a switch. You need to invest time and resources in the process, clean and migrate data, integrate with other tools, and retrain employees.
But for businesses to stay productive and competitive in today’s fast-moving market, it’s important to size up the possible benefits and the ROI that can be gained from implementing a new platform.
How do you know it’s time for change?
You understand the benefits of migrating to a new finance IT system, but how do you know if the time is right to make the change? If you think your finance software is holding you back, there will be signs you can look out for. Here’s how to tell if you’re ready to roll out a new IT migration.
- Your finance system slows you down
Regular outages and slow processing speeds impact your productivity, stopping you from getting things done, forcing you to spend time on troubleshooting, and creating a frustrating user experience. Plus, you find yourself manually performing the same basic tasks over and over again.
- Maintenance and support costs are high
Your spending on maintenance and support for your outdated tech is only growing, with frequent repairs suggesting that the system is becoming a financial burden.
- You’ve had security and compliance near-misses
Your system’s inability to keep up with current cybersecurity threats and regulatory requirements is exposing the business to significant risks—you might even have experienced a cyber attack or a data breach already.
- You struggle to get your system to work with others
You’ve faced challenges in integrating the legacy finance system with other applications, preventing you from accessing the data you need and creating data black holes with low visibility. Your teams may have become over-reliant on inefficient data storage methods like spreadsheets causing hours or even days of extra work to consolidate that data into useful reports.
- You can’t make changes to meet business needs
Your inflexible finance system means you can’t scale or adapt to changing business needs, like facilitating remote work, developing a new type of report or dashboard, or changing the way you process things like expenses, for instance.
Why migrate to a new finance IT system?
There’s a huge range of reasons why now is a good time to migrate to new finance software. But the core driver that underpins many of these reasons is the colossal amount of change we’ve endured over the last few years.
Tech has changed. The way we use data to make decisions has changed. Customer behaviour and expectations have also changed.
To keep up with these shifts, businesses need software that helps them do more while offering scalability, security, and cost efficiency.
Here are just a few reasons why the modern finance software platforms on offer today can help you drive better results and higher ROI—and why now is the right time to perform your finance IT migration.
Advancing technology
Developments like cloud computing, AI and machine learning, and Robotic Process Automation (RPA) are bringing huge benefits to modern finance software systems, helping you change to make faster, smarter decisions, automate repetitive tasks, and take advantage of more flexible, scalable, and cost-effective infrastructure.
Improved security and compliance
Modern finance systems boast advanced cybersecurity features like multi-factor authentication, encryption, and real-time threat or outlier detection to protect your business from increasingly common and sophisticated cyber attacks.
Today’s systems are also designed to help you keep up with evolving data and privacy regulations with functionality like automated compliance monitoring and reporting.
Greater cost efficiency
Modern finance IT solutions tend to be cloud-native and operate using a Software as a Service (SaaS) model, reducing maintenance and upkeep costs, as well as the initial outlay. Plus, automation and smarter workflows free up time and resources needed for routine tasks, saving you time and money—ultimately helping you focus on value creation.
Scalability and flexibility
The cloud-based nature of these new finance systems means they can be easily scaled to cope with business growth and changing market demands. It also makes them more flexible and easier to integrate with other business management systems, like ERP or CRM software.
This gives your finance leaders a more complete picture of the business and helps to improve company-wide operations.
Better user experience
Newer finance systems are designed to be accessible, with user-friendly interfaces and features that make them easier for you, your team, and your colleagues to get to grips with. Some solutions also include IT migration and training support and educational resources.
Many can be used on mobile devices too, so you can get things done on the go, no matter where you are.
Data-driven decision-making
The advanced analytics and real-time reporting features built into modern finance systems allow you to tap into deeper insights and make more informed strategic decisions. That means you can create more accurate forecasts, make smarter long-term plans, and adapt more quickly, helping you stay ahead of the competition.
Competitive advantage
Businesses with newer finance IT systems have more tools at their disposal that help them innovate and respond to market changes more effectively. This up-to-date technology also helps businesses meet modern customer expectations for fast service, transparency, and personalised experiences.
Disaster recovery and business continuity
Over the last few years, you might have seen the importance of business reliance firsthand. Modern finance systems offer enhanced disaster recovery options and business continuity plans, minimising the chance of downtime and disruption.
And with cloud-based solutions, you get regular and automated data backups, giving you better protection against data loss.
The pros and cons of sticking with legacy IT systems
Still on the fence about migrating to a new finance IT system? Let’s take a look at some of the benefits and drawbacks of continuing to use your legacy software.
Using a legacy finance IT system: The pros
Familiarity and stability
Your employees are already familiar with the system and need minimal ongoing training. And while your legacy finance system might not be cutting-edge, it’s probably stable and reasonably reliable.
Cost considerations
Continuing to use your legacy system avoids possible costs involved in migrating to a new system, like purchasing licenses, implementation support, and training costs.
Customisations
Your legacy system may have been customised over the years to fit the changing financial needs and workflows of your business, with deeply integrated processes that it may or may not be possible to replicate without disruption to your operations.
Regulatory compliance
If your legacy finance system has been in use for a long time, you’ve probably already established compliance processes and reporting mechanisms that have consistently reduced your risk of compliance failures.
The upshot is that with a legacy finance IT system, you know where your limitations are, and you’ve probably already put mitigations in place. But is it really the most efficient, cost-effective way to continue into a future that is changing too rapidly?
Using a legacy IT system: The cons
Unnecessary costs
Using outdated financial IT systems can generate a lot of unnecessary spending. Specialist knowledge of older hardware or systems needed for maintenance and support, for example, can be costly.
Unpatched vulnerabilities or inadequate security features in legacy systems may lead to expensive data breaches and non-compliance fines. Operational inefficiencies can create bottlenecks, denting productivity and potential ROI.
Poor and slow integration with more modern applications causes data silos that might require expensive workarounds or manual data handling.
These costs add up, and can easily end up outweighing any savings you might achieve by avoiding a system upgrade.
Security and compliance risks
Tech providers often reduce or even discontinue their support for outdated systems, making it harder to get necessary updates, patches, or support when things aren’t working as they should.
Older systems may struggle to comply with adapting to new regulations and laws, increasing the risk that your business won’t be able to meet the necessary compliance requirements.
Most importantly, when your software isn’t fully supported, you can be left exposed to cyberattacks and data breaches that deliberately target these kinds of vulnerabilities.
Integration issues
Interoperability is key to achieving a complete picture of your business and its finances. However, legacy finance systems often have poor interoperability with modern applications and cutting-edge tech, creating challenging data silos that can’t consolidate information from across the business.
This hampering of data flow also prevents you from accessing more advanced analytics and real-time reporting.
Innovation and competitiveness
Legacy systems typically lack newer features like AI, machine learning, and advanced analytics, all of which can provide significant business insights and efficiencies. This puts you at a competitive disadvantage, and you risk falling behind competitors who are using these technologies to make faster, more informed decisions.
Managing the change that comes with IT migration
One of the most challenging parts of migrating to a new financial IT system isn’t the data transfer or the configuration; it’s dealing with the change that comes with it. Change really is the only constant for businesses today, but it can still be difficult to manage.
Disruptions to day-to-day operations can affect productivity and service delivery, causing internal and external frustration. Migration often requires financial investment and resource allocation which can divert focus from other areas.
Employees used to a legacy system may be hesitant to migrate because of uncertainty about the new platform’s features or anxiety around learning new skills. After all, people get used to doing things a certain way, even if those methods or the tools they use aren’t the most efficient.
And perhaps most of all, change represents a risk of failure, with the potential for technical issues, data loss, or unsuccessful implementation creating a natural cautiousness around migration projects.
Despite this, there are many things you can do to successfully manage change, and thoroughly preparing your organisation for it ahead of time can make for an easier transition.
Here are a few things you can do to make sure your finance IT migration goes smoothly:
- Engage people early: loop in both key stakeholders and anyone who’ll be using the new system in the early stages of the IT migration project and gather feedback about their needs and concerns. This helps them engage with the decision-making process, builds support by creating a sense of ownership, and reduces resistance when the system eventually goes live.
- Plan for everything: create a detailed financial IT migration plan that includes timelines, resource allocation, risk-management strategies, and contingency plans to help you get ahead of any potential challenges and manage them more effectively. The more you can mitigate any negative impacts of the software migration before it occurs, the more people will get behind it.
- Keep in touch: maintain consistent, open, and transparent communication all the way through the IT migration process. Keep users informed about the reasons for the change, the benefits they’ll enjoy, and how it will affect their roles to alleviate much of their apprehension. You should also share regular updates on the status of the project so there are no surprises.
- Build user confidence: you’ll need to deliver thorough training and ongoing support to help employees adapt to the new finance system. Good-quality training that’s based on user needs and tailored to their individual skill levels reduces anxiety, builds confidence, and helps encourage adoption.
- Go slow and steady: modern finance IT systems can be wide-ranging and complex, so it’s often a good idea to roll out a new system in phases, initially focusing on less critical modules or rolling it out to small sections of the organisation first. This phased (or pilot) approach to migration allows you to troubleshoot and make adjustments before full-scale implementation.
Final thoughts
No matter how well they’ve served you in the past, it’s an inescapable truth that many legacy finance IT systems are no longer cut out for use in modern businesses.
Technology is constantly moving forward and delivering new opportunities. The longer you cling to the status quo, the further behind your business will fall.
Upgrading your system to a modern, feature-rich solution like Sage Intacct can help you save time through automation, make faster, more informed decisions with advanced analytics, and drive greater ROI.
It also helps release staff from the unnecessary burden of manual data input, giving them time back for strategic decision-making, with a better work-life balance as an added bonus.
While migrating to a new system may seem like a major undertaking, those who make the switch will reap the rewards not only today but well into the future.
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