Organisations worldwide are starting to understand and realise the benefits associated with effective finance transformation strategies. In fact, recent Gartner research found that 85% of finance teams are currently undergoing or planning a finance transformation.
There are many reasons why a business may seek to adopt finance transformation, such as to increase efficiency or inform better decision-making practices – find out more about the other challenges and benefits of finance transformation, here. The concept of finance transformation is to better align the finance function with the overall business objectives. This involves using new and innovative technology to support the overhauling of inefficient systems and processes. The underlying challenge to all of this is ensuring that the right technology is in place to facilitate the real change in mindset that businesses need to take on board, to truly transform the finance function for the better.
The problem with legacy systems
Legacy ERP (enterprise resource planning) and finance systems are still being used by the majority of businesses. The issue with this is that these systems are out of date and provide no real value to organisations whose business requirements change regularly. They offer little automation, and very basic workflow management plus, they incur significant upkeep costs.
Legacy systems are also often custom-built, so it’s likely that an organisation has been using the same application for years to get the most value from the initial purchase. Likewise, businesses often don’t want the hassle associated with upgrading to newer software. However, actively choosing to not upgrade legacy systems – whatever the reason – can leave organisations draining costs, time and resources.
It’s likely that only a handful of employees know how the legacy ERP or finance system actually works – what happens if those people leave or retire? Also, is the software actually doing what it’s supposed to, in the way it’s supposed to? And what if it needs to perform new tasks to keep pace with business growth?
These are all questions that CFOs need to consider if they’re still not sure if they need to upgrade or replace legacy systems.
Recent research unearthed some interesting findings surrounding some of the core reasons that organisations finally decide to bite the bullet and upgrade their ERP systems.
But adopting new ERP systems comes with a variety of challenges that must first be addressed.
Underestimating the time and budget required to successfully complete and run legacy ERP and finance system upgrades is very common. Creating a clear plan on what will be achieved, by when and within what budget and actually sticking to it, is key.
Due to the length of time that these projects take from first initiation to completion, there’s greater room and time for error. This means that projects need to be meticulously managed to avoid mistakes.
The key benefit of implementing an effective ERP is having a single source of truth for all data, not just financial data. This means that all existing data needs to be migrated across to the new system – a thorough search will need to be required in order to filter through every data source and achieve full migration.
Once all the data is collected, it’s time to migrate it – this isn’t a task to be taken lightly. Organisations often first have to deal with duplicate, incorrect, inconsistent and null and void data, but it’s critical that all data is cleaned prior to migration to ensure starting on the right foot, and that no values are missing.
A new system means a complete overhaul of existing business processes in order to benefit from the efficiency and productivity improvements that are now possible with the new solution. This means a shift in mindset and a change to everyday work processes for many employees at an organisation, which presents typical change management challenges.
There is no final product when it comes to new ERP implementation. Organisations need to ensure they’re continuously updating their systems to support new business requirements, keep pace with industry trends, and constantly-changing financial demands.
Upgrading or replacing legacy systems is a major project to undertake, and they often take 3-5 years to complete, and then more time after that to actually start seeing the benefits. These systems are rarely integrated properly into other core business applications such as CRM, HR and data reporting tools. This results in more manual work, using on and offline spreadsheets, and generally increasing the number of manual processes and inaccurate data flowing between systems, which is far from ideal for organisations seeking an effective finance transformation journey.
Businesses often choose a pick-n-mix approach when it comes to replacing these types of systems, i.e. continue to do what has always been done but do so via a new platform or interface. Instead, businesses need to take a more holistic approach and address the way in which they are doing things now, and why. This provides a much more solid foundation on which to build and implement a new system that will actually help to achieve overall business objectives and KPIs, and generally realise the benefits of upgrading systems.
For organisations that want to overturn their legacy systems as part of the overall finance transformation strategy, but don’t want to wait 5+ years, then Niico is the ideal solution.
Niico is an intelligent automation platform developed by Equantiis. It’s the more efficient and cost-effective alternative to implementing new ERP systems. The platform combines the use of innovative technology such as AI, ML, RPA and OCR to transform the finance department without it needing to undergo any major changes to existing programs or systems, and organisations can start leveraging the solution’s intelligent automation within just 30 days.
Book a demo to learn how Niico is already helping CFOs on their journey to finance transformation success.
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