Why it is time to move on from legacy financial consolidation systems?

Legacy financial systems like Oracle Hyperion, IBM Cognos Controller, or SAP BOFC have reliably supported financial management for many years. To optimize business insights and decision support, organizations must invest in modern, integrated Enterprise Performance Management (EPM) solutions. These platforms streamline operations, offer flexibility with cloud-based or on-premises deployments, and unlock new opportunities for innovation and enhanced efficiency. 

Thomas Oschlisniok

Partner, Head of Business Services Transformation

KPMG Switzerland

Roderik Olde Kalter

Director, Finance Strategy & Transformation

KPMG Switzerland

The hidden costs and risks of legacy systems

Older EPM systems are known for their fragmented architecture. While they were once industry-leading tools, they have significant shortcomings that can disrupt business processes and drain resources. Some of the key challenges include:

  1. High maintenance and upgrade costs

    Maintaining older systems is expensive. These platforms require frequent updates, custom patches, and manual interventions to keep them running. Unlike modern cloud solutions, which offer automated updates and reduced infrastructure expenditures, legacy systems demand significant investment to remain functional. Moreover, keeping multiple disconnected applications coordinated demands constant attention from IT teams, further inflating costs.

  2. Inefficient data integration

    Outdated systems are notorious for their lack of seamless data integration. Businesses must juggle multiple applications to handle budgeting, planning, consolidation, and reporting. This fragmentation leads to manual data transfers, increased reconciliation efforts, and a higher risk of errors. When data consolidation is labor-intensive, it delays critical insights and prevents quick decision-making, making the organization less agile. In contrast, hosted solutions provide centralized integration and real-time updates, eliminating many of these inefficiencies.

  3. Growing technical debt

    The longer you keep a legacy system, the more technical debt you accrue. Technical debt refers to the hidden costs that arise from supporting outdated technologies, such as maintaining redundant systems, employing multiple administrators, managing complex integrations, and dealing with disaster recovery. Over time, these costs accumulate, diverting funds that could be better used for innovation and growth.

  4. Compliance and security concerns

    Older systems struggle to keep up with modern regulatory standards. When an application reaches its end-of-life, it no longer receives security updates, leaving your organization vulnerable to data breaches and compliance failures. This exposure not only risks legal penalties but can also damage your reputation with stakeholders and clients. 

  5. No functional improvements

    Most of the legacy system vendors have announced that they will no longer make strategic investments into the product leaving you with a product that is sub-optimally supporting your consolidation and reporting processes. 

How much longer can you afford to invest in systems that cost more to maintain, limit flexibility, and will not be suitable in the future?

The advantages of modern, unified EPM platforms

The shortcomings of aging systems make a compelling case for upgrading to a modern financial platform. These newer solutions are designed to eliminate inefficiencies, streamline processes, and provide real-time insights that empower businesses to make strategic decisions. Key strengths of modern platforms include:

  1. Cost efficiency through a unified solution

    Modern financial platforms consolidate all financial management functions - planning, budgeting, consolidation, reporting, and data quality - into one unified system. By replacing multiple disparate systems with a single platform, whether deployed on-premises or in the cloud, companies can drastically reduce the total cost of ownership. This simplification reduces the need for custom integrations, lowers administrative overhead, and eliminates the hidden IT costs associated with maintaining multiple outdated tools.

  2. Seamless data integration and real-time analytics

    A modern, integrated platform enables seamless data synchronization across all financial processes, providing a single source of truth. This real-time connectivity allows for instant access to insights, reducing the time spent on data reconciliation and manual processing. Businesses that opt for cloud-based solutions gain additional advantages, such as faster deployment, remote accessibility, and automatic updates, enabling even greater agility in decision-making. 

  3. Enhanced security and compliance

    Unlike legacy systems, modern platforms are built with information safety and legal adherence at their core. Continuous updates ensure that your systems are always protected against the latest threats, and automated compliance tools help you meet regulatory standards without manual intervention. Cloud platforms offer advanced security features and frequent updates, ensuring your system remains compliant and protected against emerging risks.

  4. Scalability and flexibility for growth

    Today’s businesses need systems that can grow and adapt to their evolving needs. Modern platforms are scalable and flexible, enabling companies to add new features, integrate new data sources, and scale operations without overhauling their entire system. This adaptability ensures that your finance function can keep pace with business expansion and market changes, without facing the disruptions that legacy systems often cause during upgrades. 

  5. Latest functionality and features

    Modern platforms leverage automation to streamline processes, while AI provides predictive insights for smarter decisions. ESG/CSRD tools simplify sustainability reporting, and BEPS Pillar 2 functionality ensures seamless tax compliance. Advanced analytics deliver real-time insights, enabling CFOs to drive efficiency, meet regulatory demands, and make data-driven strategic decisions.

Take control with a proactive migration strategy

Waiting until your legacy systems fail or become unmanageable is a risky strategy. Businesses need to proactively plan their migration to avoid disruptions, minimize costs, and ensure a smooth transition. Delaying migration can lead to costly, last-minute fixes that drain resources and cause more damage than anticipated. Instead, start by assessing your current infrastructure, identifying inefficiencies, and mapping out a clear migration roadmap.

Why now?

Acting now to upgrade to a modern EPM platform ensures your organization is not only protected from future risks but also equipped to take advantage of new opportunities. Proactive migration allows for a structured, phased approach that minimizes downtime and aligns with your business goals.

Approach to successful consolidation systems migration

Migrating financial systems is complex, requiring alignment of business objectives and technical requirements. Organizations that succeed often follow a structured approach like this:

  1. Assessment and roadmap development

    Begin with a comprehensive evaluation of current systems, pain points, and opportunities. Create a tailored roadmap outlining each migration phase, aligning with business goals while mitigating risks.

  2. Tailored migration solutions

    Develop a migration plan customized to the organization’s specific needs, whether transitioning from on-premises or web-based platforms. Apply best practices and refine approaches to ensure an efficient and smooth transition.

  3. Integration and change management

    Ensure seamless data fusion across finance processes, incorporating data consistency, intelligent processing, and workflow improvements. Effective change management enables teams to adapt to new systems and ensures stakeholder alignment.

  4. Post-migration optimization

    After go-live, continuously monitor and optimize system performance, ensuring growth capacity, system safeguards, and alignment with evolving business needs.

This method transforms migration into an opportunity for enhanced efficiency and long-term growth.

Conclusion: Modernize now to secure your future

Staying with outdated financial systems is no longer a viable option. The expenses, risks, and inefficiencies are too high. Modern, unified platforms offer a clear path to cost savings, improved efficiency, and enhanced regulatory conformity. The benefits of migrating now are significant: reduced technical debt, seamless integration, and greater agility. The decision to upgrade is not just a technological one; it is a strategic move to safeguard your business’s future.

Finance Strategy & Transformation

Your trusted partner for challenging and complex finance transformation journeys.

two colleagues discussing on laptop