Choices, choices - solving the finance dilemma

Profile picture for user Mark Nittler By Mark Nittler September 13, 2016
Summary:
The choice between incremental change to legacy systems or rip-and-replace with new tech creates a dilemma for finance leaders writes Workday's Mark Nittler

Painting of forest strewn with yellow leaves © weris7554 - Fotolia.com
Two roads diverged in a yellow wood . . . .” – Robert Frost

I find myself thinking about that line often in my conversations with finance leaders about the systems running their finance shops. Aging legacy systems compared with new alternatives such as cloud-based solutions are presenting them with two options, and I am often seeing these leaders frozen at which path to go down.

On the one hand they can continue addressing legacy system deficiencies at the margin. They can bolt on a reporting tool here, a planning tool there, which is a tried, true – and failed – strategy. Or they can rip and replace the finance technology infrastructure, which has the promise to drive real transformation but can seem too hard.

It’s hard to get enthusiastic about either option. Hence, the freeze.

I can understand why these leaders are so hesitant about replacing their legacy systems. The memories of the time, cost, and stress of their legacy ERP implementations and upgrades are still so painful even the suggestion of a big change leaves them shaking in cold sweats.

But then the incremental approach hasn’t worked either, because at their core legacy financial systems were not designed to do what we need them to do today, and no amount of incremental wrapping and layering around that core will change that – the phrase ‘lipstick on a pig’ comes to mind.

Tough decisions

We see customers grappling with this finance dilemma close up at Workday, because they ask us in to evaluate our cloud-based offering. These organizations face tough decisions about having to rip and replace what they have. But they do their research, make a decision, and work closely with us and our partners to deploy a cloud-based finance system that helps them work in more modern way.

For example, take Johnson Brothers Liquor Company, a wine, spirits, and beer distributor established in 1953 in the midwestern US. To keep pace with the digital age, the company faced a critical decision, says CFO Kevin Loegering:

We knew that if we didn’t update our systems, we were going to fall behind.

The company replaced its legacy system with Workday for financial management and human capital management. Naturally, Loegering’s team were diffident about the change, but once they got used to the new system, the benefits were plain:

They were uncomfortable at first, but that’s understandable, because it was such a big paradigm shift. They’d been using the same system for nearly 15 years and had certain ways of doing things. I assured people that it was just another change, like other changes in the past that they ultimately grew comfortable with.

Now, we’ve all gotten much better at our jobs … It’s kind of opened our eyes to things that we weren’t really good at with our prior system. We get things tied up a lot faster than we had in the past – it’s the continual improvement of process and data.

The results at Johnson Brothers are typical of what we see once organizations take the plunge – they are transforming their finance organizations, gaining real-time business insights, and closing their books in half the time it took before.

The way forward

This new generation of financial software offers companies an alternative to the painful legacy ERP implementations of the past, and creates a foundation that can support the increasingly complex business needs of today and in the future.

With over half of Workday’s financial management customer base already live and up and running, they are proof that the way forward doesn’t have to be painful and scary, and in fact, will deliver innovations that can drive your business forward.

This is an exciting time for financial software. As legacy systems continue to age, CFOs face a choice – continue with incremental bolt-ons that add weight, complexity, and cost?  Or, replace your finance technology with a modern system that can take your organization into the future.