Is your financial consolidation software fit for purpose?

Is your financial consolidation software fit for purpose?

Does it give you what you need?

According to analysts there will be a shift in financial consolidation solutions in the next three years towards new generation cloud tools. Furthermore, many established software solutions are going out of support or will be in the near future. 

For example:  

  …just to name a few. 

This change is being driven by changing requirements in finance. For instance, in a survey conducted by CCH Tagetik, 94% of financial executives shared that they are unhappy with their existing financial system. They:

  • feel systems are outdated and not fit for purpose.
  • find themselves resorting back to traditional manual processes that are time consuming and error prone. 
  • often find themselves struggling to collate data from multiple systems, using excel sheets along with manual data validation of accounts.

Can you relate to the above challenges? Do you use tools or consolidation software that does not support your group reporting needs? If you have answered yes to the above, your financial consolidation system might be ready to retire. So, here are some signs to watch out for

Signs to watch out for

 1. You are worried something will break if you upgrade or change something in your consolidation software

If you do not run updates on your consolidation software with the fear of breaking data connections with other third-party systems, you are not alone! 

If your financial consolidation software has not been updated in the last six months, you run the risk of non-compliance to the latest regulatory changes.

But, updating your legacy system can be very expensive as it may require external product experts who usually charge a premium.

It also requires your IT time to put in extra effort to ensure that the upgrade doesn’t have any knock-on effect on any other systems.

So, if your consolidation support is difficult or too expensive to upgrade – it might be time for a change.

2. How dynamic is your existing consolidation software?

Financial regulations and operating standards are ever-evolving. But, can you say the same for your consolidation and reporting software?

Many organisations feel it will be too expensive to move from their existing consolidation software. As a result, they install custom patch solutions to include any new functionality required.

This route can be a false economy – and the underlying costs can creep up on you year after year.

9 times out of 10, its better to make the change and upgrade to the newer tools that will offer increasing benefits,

However, modern consolidation tools such as CCH Tagetik have easy migration paths making it easier to transform financial close and consolidation.

3. High Complexity of the system

Finance teams didn’t deliver the systems – it was external consultants, contractors and IT. Therefore, finance teams do not control their own processes but need external support to manage.

Businesses end up spending a lot on training staff in complex systems and retention of staff becomes expensive.

Finance teams created CCH Tagetik…for finance teams. The system has a simple user interface. The user interface follows a simple/natural flow of tasks that a financial manager would follow in the process of closing or planning.

So, if you are spending too much on staff training and retention: that is the third sign that your legacy consolidation system is ready to retire.

4. Does closing and consolidation take six days or more?

Are your finance teams struggling to get the data in, signed off and validated on time?

If so, when group finance systems fail to support your teams employees resort to workarounds such as using offline methods and excel sheets.

This gives way to compliance risks, as inaccuracies, delays and lack of control and governance creep in at this point.  

Close time frames should be reducing – with the levels of automation available in today’s tools, organisations should be able to close and consolidate financial accounts in under 6 days – even for group companies.

 5. Your produce or solution is running out of time

Many financial consolidation solutions are going out of support. They are being phased out of their vendor road-maps. Sometimes they are being replaced by new cloud solutions and dropping of the industry analyst reports.

Any of the above is a bad sign. This means the will be no more investment in  development or improvement of those solutions and they simply run out of life with ever reducing upgrade and support from the vendors. At this time, there is a “natural software churn” as new age cloud consolidation solutions take grip. Simpler, easier to use, more self services and greater functionality making jobs easier.

Gartner predicts that by the year 2020, 80% of large organisations will have replaced their legacy solutions because it’s not fit for purpose. If you relate to any of the above, we urge you to look beyond historical financial  management and use this comparison matrix to choose the consolidation software that best meets the needs of your finance team.

Interested to hear how modern cloud finance solutions will help you?

At a high level – you can get an overview of CCH Tagetik Financial consolidation software here.

From a tactical view – you can get snippets of how the CCH Tagetik finance transformation platform can help you with bite-sized demos.

To strategically assess your opportunity – you can participate in a scoping workshop with AIS Consulting t o define your roadmap and business case.

You can also here how BNP Paribas made the change to CCH Tagetik for planning – click here to view the video

CCH Tagetik is a financial and regulatory reporting tool that has been adapted for lease management. Over 200 global organisations already use the CCH Tagetik solution. It empowers decision makers and business users across all departments, helping them work smarter, streamline business collaboration, and make insight-based decisions with confidence.

Established in 1836 – 1 Product, with 4 global divisions serving more than 1200 customers in over 180 countries.Sources and References: