How Do You Know When You Need to Update Your Financial Systems?

Posted on: December 30, 2015


Topics: General

Financial System Software

A financial system – like strong leadership and a solid team – is one of those things that is absolutely vital to a business’s success. Without a modern, streamlined, easy-to-use financial system, your business won’t be able to live up to its fullest potential.

But how do you know when it’s time for a system checkup? How do you know when it’s time to update, or even replace, your current financial system?

The system is simply old

Let’s say you’re a CFO who’s been running the finance department of a successful business for about 15 years now. During that time, you’ve upgraded your systems a couple of times, but it’s been several years since the last upgrade.

That’s a clue right off the bat, of course, that your systems are probably due for a good looking-over, if not another upgrade – or even a full-on replacement. But often, it’s easy to push those clues to the backburner, as problems to be dealt with on another day.

However, as the speed of technology’s evolution continues to increase, it’s becoming increasingly important to keep your systems updated. For example, according to a 2011 report by the consulting group Aberdeen, seven to 10 years is about as long as any business should keep an ERP system. The same estimate can be made for financial systems and other complex software systems (note, however, that hardware – like computers – should be replaced much sooner). 

Many business owners and executives do their best to justify keeping an old system running, judging that the price of waiting on slow or cumbersome software is less than the cost of upgrading or installing a new system. As you’ll see in our next scenario, that’s not always the case.

Your team consistently has issues with the system that affect their jobs.

As mentioned earlier, a strong team is one of the critical factors to a business’s success. But a team that feels prevented from doing their best work by the system they have to use is not going to feel very valued. How can they, when their legitimate complaints are being ignored?

These could seem like little issues to department heads or executives that don’t have to use the same software or system, but they’re actually huge productivity drains – and therefore, huge potential profit losses.

Maybe your budgeting software freezes up when more than two or three people try to access it. Perhaps you’ve recently added a new product line and it’s overloaded your ERP system, slowing it down to the point that your sales team has simply created a workaround to avoid using it at all. Perhaps your system has a glitch that requires users to manually type in a specific formula, instead of the software doing it for them.

It can seem difficult to come up with an actual number when trying to figure out how much this productivity loss is costing you, but it’s quite possible to figure out. The first step is just to talk to your team – ask them to estimate how much time they lose waiting for blinking cursors, or rebooting the system after a freeze.

From there, you’ll be able to figure out how much this time is costing you on a weekly, monthly, and yearly basis. Chances are that once you see those numbers, you’ll end up feeling pretty good about upgrading or replacing your systems!

Once you’ve decided to look into these problems, hire a firm with financial systems expertise. 

When you’ve made the decision to do something about your outdated, slow, or malfunctioning financial system software, it’s time to figure out who to bring in to help diagnose the problem and recommend a solution.

At TGO, we’re financial systems specialists. We offer the Financial Systems Quality Assessment, a comprehensive check of your financial system’s health. We can identify the points where your system is at risk of failure, offer unbiased advice on how to best improve your system’s performance, and offer comprehensive vendor analysis if you decide to purchase a new system.

Best of all, our guarantee includes a fixed, up-front price that is settled on before we begin work. You won’t have to worry about hidden or surprise fees, or extra hourly costs, since we don’t bill by the hour.

Are you ready to schedule your Financial Systems Quality Assessment? Contact TGO today!