Are legacy systems holding back your business?

Businesses don’t tend to set out to rely on legacy systems. 

You start with a system that’s working well at the time. 

Things get busy. Before you know it, you’re using outdated, outmoded technology and upgrading seems overwhelming.

Over time, that spreadsheet accounting system that once worked well has become inefficient, disconnected and difficult to manage. Or those templates were okay when you had four staff, but now you have 40 and they’re becoming a nuisance. 

The important question is whether your software is still working for your business. At RSM, we regularly work with clients who are asking a similar question: are our systems helping us grow, or are they slowing us down?
There is no set time to audit your systems and ask yourself these questions. Having them in the back of your mind might raise some red flags – and if they do, it might be time for a change.

Are your systems costing you time (and money)?

One of the clearest warning signs of a legacy system is inefficiency. Older systems often don’t integrate well. They don’t talk to each other, data must be exported manually, and reports require significant manipulation before they are usable.

This creates problems across the business.

• Finance teams spend hours preparing reports.
• Managers wait for critical information.
• Business owners can’t access real-time insights.
• Stakeholders get frustrated when information isn’t available when they need it.

If someone in your business is spending days each month compiling data into spreadsheets just to produce standard reports, that’s more than inconvenient. It’s costing your business time and money. You’re either paying for that time or losing valuable productivity elsewhere.

Is poor integration limiting your performance?

As businesses grow, systems can duplicate. You end up with multiple systems that overlap on what they do. Or you can end up with many systems just to do a job that a modern system can do in one. For example, you might supplement a core accounting platform with payroll tools, project management software, inventory systems and reporting platforms.

When those systems don’t integrate properly, you might fall into the trap of manual workarounds, making work even more inefficient. 

It gets difficult to bolt modern tools onto an outdated core platform. While partial integration may exist, it’s not seamless. You will likely end up with duplicated data entry and inconsistencies.

Modern systems are typically designed to integrate more effectively. When integration works as it should, duplication is reduced, errors decrease and processes become smoother.

Is limited functionality restricting your growth?

For some small or stable businesses, a legacy system may still be OK. Maybe your reporting requirements are straightforward and you’re not planning to expand by much. Your current setup may serve you well.

Still, growing businesses need reliable access to data. Accurate, timely financial information supports:

• Fast, informed decision-making
• Cash flow management
• Tender and proposal preparation
• Investor and stakeholder reporting.

If you can’t press a button and rely on your data, decision-making slows. When decisions slow, growth can stall.

Is your system giving you the information you need or are you constantly working around it? If the answer is the latter, it may be time to review your options.

Are security and compliance up to date?

Security and compliance are important, and they’re becoming more of a focus into the future.

Very old desktop-based systems may not align with current security standards or data protection requirements. This is especially relevant for businesses in regulated industries or handling sensitive client data. 
The core system may be working well. Even so, assess whether it meets current security and compliance expectations. especially when connecting to newer cloud-based platforms.

Will the inconvenience of upgrading now pay off later?

One of the biggest barriers to change is familiarity. Legacy systems are often deeply embedded in a business. Teams know how they work. Processes have been built around them. Moving to a new platform can feel like it’ll be a bigger issue than it’s worth.

Transitioning systems does involve cost and effort. And yes, staff may need to relearn processes, and this extra time out may be a short-term inconvenience.

However, familiarity alone should not justify retaining a system that no longer meets your needs. 
When implemented appropriately, updated systems can deliver measurable outcomes.

For example, we helped a client who was performing their monthly reporting obligations to funders by exporting data from multiple platforms into Excel then manually compiling reports. The process took several days each month and carried a high risk of human error.

When reporting becomes painful, data unreliable or integrating your systems becomes more complex, comfort can quickly become a constraint.

After introducing an integrated digital solution, they could generate reports more instantly. The benefits included:

• Time savings
• Less manual errors
• Real-time access to financial data
• More confidence in reporting.

Are any of these warning signs appearing?

System reviews should not only occur when a crisis emerges.
Ideally, businesses should assess their systems at least annually. More importantly, pay attention to early warning signs:

• Increasing time spent preparing reports.
• Growing reliance on manual spreadsheets.
• Difficulty accessing accurate real-time data.
• Integration breakdowns between platforms.
• Escalating stakeholder reporting requirements.

If you notice any of these signs, plan your transition early. It’s often best to align your updates and upgrades with key financial milestones, such as the new financial year.

Waiting until processes become unmanageable can make the transition more disruptive and stressful than they need to be.

Do I really need an overhaul or a minor upgrade?

Upgrading systems is not about purchasing the most sophisticated or expensive platform available. It’s about balance.

We often see businesses invest heavily in enterprise-level software but only use a bit of its functionality.

Others underinvest and struggle with systems that restrict growth.

The right approach considers:

• The business’s current and future needs
• Available budget
• Internal capability and resourcing

The time team members can realistically commit to managing the system.
Spending more doesn’t guarantee better outcomes. The goal is to find a system that fits your business, not the other way around.

FOR MORE INFORMATION

If you would like to learn more about the topics discussed in this article, please contact your local RSM office.