Legacy Systems in Finance – Why they are holding you back
Those evaluating their current systems are often faced with developing a value case for system migration and operational change – What cost savings will system migration bring? Are current operations not working? If nothing changes, will we survive?
This is particularly true for finance teams faced with overcoming talent shortages and maintaining productivity with legacy systems.
Financial teams are being asked to do more than is possible with the tools they currently have, which is challenging when there is an increased need to re-forecast, plan, and budget with increased frequency.
In this blog, we want to explore why an organization might be favoring legacy systems, and how this can hold your organization back as the Cloud provides cost savings and other huge operational benefits.
Why do organizations stick with legacy systems
Let’s face it, the familiar is comfortable. When teams are being tasked with large workloads and potential backlogs, their instinct is to use what they are most proficient with.
With talent shortages, it feels that what has worked previously is the best way forward. However, many teams may be unaware of the capability of Cloud solutions to meet productivity and demand. Moreover, teams may be unaware of how much their legacy systems could truly be costing them, both fiscally and operationally.
Often this isn’t complacency, but fear of change and the risks that come with that. When Cloud solutions are used the digitization of operations can be quick, and bring even more user-friendly experiences to help your teams get rid of backlogs and meet demand head-on – today and tomorrow.
Additionally, the reluctance to change may come from the C-suite, a team may be afraid to disrupt the status quo and executives may be unaware of both the value Cloud systems bring, and the inefficiency of their current systems.
Click to read The true cost of doing nothing (ERP) 2023 (Gated)
Why legacy systems will cost you
With 28 FTEs working 60 hours each per month on manual tasks, only a 25% increase in efficiency would save an organization $8,000 – and it's possible the Cloud can offer so much more. Plus, the time saved can be repurposed for useful and high-value tasks like forming strategies for the future.
Sure, you can get buried in price comparisons, but what about security? No matter how much you think you’re saving, the security of poorly maintained legacy systems is low and one cyberattack could cripple an on-premises deployment, while Cloud security offers much more coverage.
What about your people? Merely digitizing your HR capabilities could heavily impact your current employees to do more, and when you add this on top of the operational and productivity benefits of FP&A Cloud solutions, the savings cloud migration brings can be infinite.
Importantly, the Cloud offers innovation that on-premises systems do not. If your finance teams are stuck using Excel there’s no new update or patch that will fix this, but with SaaS, you can innovate within your organization easily, and new technologies and innovations are always being added, with the ability to integrate with other applications.
The ability to innovate in the Cloud means that organizations can adapt their Cloud system as they please, and without large workloads, meaning they can respond to new compliance, market disruption, or organizational growth easily.
Finally, legacy systems invariably generate more manual work for your current financial teams, and with the complexity of full financial compliance growing, this can ultimately lead to errors, and financial errors can cost an organization more than just money.
Gartner finds that 59% of accountants make several errors monthly as excessive workloads grow heavier, they add that “If these financial and regulatory pressures continue to increase, as history suggests it will, the already limited capacity accountants will be stretched further and increase error rates.
What value does Cloud migration bring?
A recent report from Nucleus highlights that the value of Cloud systems will continue to increase, but the cost of on-premises and legacy deployments will only continue to increase.
The benefit-to-cost ratio of Cloud migrations has increased by 12.5% since 2021 ($3.43 to $3.86 for every dollar spent) and this is expected to continue to increase. Part of the value case for Cloud migration is that on-premises deployments are expected to increase in operating costs, while the Cloud will not.
The Cloud also can increase productivity greatly, improving operations and operating costs. Isaac Gould of Nucleus notes that: "We expect organizations moving their ERP to the Cloud to cut IT costs by 20%, through a combination of administrative time savings and server provisioning costs and increase managerial productivity by 15%.”
Cloud deployments will also allow organizations to remain competitive – Nucleus reports that 73% of those surveyed see Cloud migration as a key priority – as the number of people benefitting from the Cloud increases, those who don’t migrate will be left behind.
NRS, a Unit4 customer, saved 2,500 FTE hours annually by implementing Unit4 ERP as a result of reducing the amount of time spent on administrative tasks through AI automation.
Change doesn’t have to be scary with Unit4
Unit4 has been implementing ERP solutions for over 40 years and has a track record of providing a seamless transition to the Cloud, from on-premises systems, for organizations and finance departments alike – here’s what some of our customers have said about their migration process:
“We've registered a very high level of satisfaction among our users. We don't need any additional training. It is important that everyone can find their way around the system immediately. The smooth transition to the new system was a great success and continues to work very well.” Horst Rode - CFO and Managing Director (FH Campus Wien)
“All in all, we can say that the project has brought us a long way. Now we can really be sure that our data is correct. It feels good to know that data reliability is ensured at all times. In addition, we gained a lot of quality time, which we now can use for the essential tasks.” - Lukas Feldhofer - Finance & Controlling (FH St. Pölten)
“We’ve broken the barrier: [Unit 4 ERP] is instantly available, it’s user friendly, and gives us real-time information which is very useful for management decision making.” - Sivabalan Muthusamy - Director of Finance (Global Green Growth Institute)
Final Thoughts
It’s becoming clear that the value case for Cloud migration has never been stronger, and only will continue to grow, while the cost of legacy deployments continues to grow. All the signs point to Cloud migration becoming a case of when not if.
To learn more about the capabilities of the Cloud, consult our SaaS solutions from Unit4 ERP, Unit4 Financials by Coda, or Unit4 FP&A, our customer stories, or consult our eBook on the cost of legacy systems to gain a more in-depth understanding of the business case for the Cloud migration.
