As organizations grow, merge with others and adopt new technology, they are often left with disparate systems that do not actually belong together. In some cases, a single organization may have several different software systems from several vendors that may have been deployed in different years or even different decades. These fragmented systems can be extremely inefficient and costly.
According to a report by Aberdeen Group, the average cost to develop a custom feeder system for accounting software is $259,189, and the average cost to integrate it is $287,613. Even with all of that money and work put into integration, there is still a good chance things will go wrong, requiring extra hours of troubleshooting and plenty of workarounds to keep legacy systems running. The longer an organization waits to remedy the problem, the more issues that will arise.
The survey found that 56% of respondents found that the biggest challenge with multiple feeder systems was the that it was difficult to ensure data across different systems would be consistent. 39% named the high cost of integration. 33% cite lack of IT resources, while 27% stated that systems often lacked adaptability and were slow to respond to business changes.
Many IT vendors and service providers recognize these challenges and now offer their customers integrated systems that are designed to work seamlessly with one another and also grow over time. They often use words like “converged” and “federated” to describe these systems.
Cloud computing has also dramatically shifted the paradigm as public cloud systems are designed to be ever self updating and consistently scalable. Microsoft’s Office 365 is one example of this. Regardless of what the procedure is called, however, the challenges remain relevant and the goal of a truly integrated accounting system remains a crucial priority for organizations that desire efficiency and lower costs.