Re-engineering of Legacy Accounting System With Cloud-First and Analytics Capability

From financial planning and analysis to accounting and reporting – these core operations are the lifeblood of the financial services industry. However, a substantial number of these organizations such as banks, fintech and insurance companies struggle with outdated and inefficient legacy accounting software that no longer serves their needs. Moreover, the operation and maintenance of these accounting systems are becoming difficult and costly. To manage this effectively, re-engineering of a legacy accounting system is crucial. It helps stay relevant in this digital age, delivering value, and driving customer delight. This transformation goes beyond mere incremental updates; it requires a substantial overhaul, a transition from traditional methodologies to contemporary architectures and technologies.

In this blog, we present a real-life case study that demonstrates how a forward-thinking fintech firm successfully modernized its legacy accounting system to be more productive, responsive, and profitable. We will also dig into the challenges the fintech firm faced with its legacy accounting software because of disparate applications that lacked modern data analytics capability. You’ll further explore how Rishabh Software helped re-engineer the legacy accounting system to make the client a cloud-first native firm!

Table of Content

• Re-Engineering of Legacy Accounting System: An Urgent Necessity
• The Business Imperative of Accounting Software Modernization
• How a Legacy Accounting System Puts Your Business at Risk?
• Legacy Accounting Software Re-Engineering: The Solution in Action
• How Rishabh Software Can Help You Move Forward with Legacy Accounting System Modernization?

Most accounting departments worldwide still rely on legacy systems. These systems are outdated, slow and inefficient to meet the needs of today’s dynamic business environment. They are unable to keep pace with the latest accounting and financial reporting regulations. The inability to cater to the growing demand for real-time data analytics to make quick and informed decisions has rendered accounting legacy systems unsustainable. While many departments digitize operations swiftly, accounting lags as it is tied to disparate, outdated software systems and siloed data. Traditionally, manual, time-consuming tasks and processes eat up time, with little transparency for task dependencies. The result – accounting professionals end up spending their valuable time closing books, leaving little time to focus on more strategic work.

• According to research, 68%^[1] of data leaders in the financial services industry say that data in legacy systems is hard to access for cloud analytics which prevents them from delivering data at the speed the business requests it.
• Businesses that switched to cloud accounting experienced a 15%^[2] boost in revenue.

These statistics clearly depict the dire need for businesses to modernize their legacy accounting software for increased efficiency, accuracy, and agility.

Legacy accounting systems often suffer from issues related to maintenance, support, integration, improvement, and user experience. The worst-case scenarios involve data loss, security breaches, or system crashes that disrupt operations, emphasizing the urgency of upgrading. If you still rely on legacy accounting software, it can drain your business productivity and profits. Here’s how:

Lack of Analytics Capabilities

Legacy accounting systems often lack the analytics capabilities needed to make informed business decisions. Due to this, businesses are unable to analyze data effectively and anticipate future trends. Ultimately, they miss out on opportunities to cut costs, optimize processes and drive more profits. Legacy systems are not equipped to handle the vast amounts of data generated today and struggle to generate real-time insights needed. This deficiency to drive strategy and uncover insights hampers competitiveness and business innovation. The result – competitors with more modern systems quickly adapt to market changes and capitalize on emerging trends.

Scalability Issues

The on-premise disparate legacy applications usually cannot handle sudden increases in the volume of transactions, especially during the tax season. The lack of on-demand scalability often leads to system outages and even missed opportunities. For instance, in the present case study, since the fintech firm‘s existing slow and disparate accounting systems lacked sufficient data analytics capabilities, the client could not leverage data to make informed decisions. In the fintech industry, where agility and adaptability are key to a firm’s growth, the inability to scale due to an outdated accounting system thus proves to be a significant bottleneck.

Poor Data Management

Accounting teams that don’t use a centralized system to store, access and retrieve data often face operational inefficiencies. These gaps can eventually hurt their revenue and reputation. Most legacy systems lack the capabilities to deliver accurate and reliable historical records in real-time. Poorly managed data further leaves the legacy system prone to cyberattacks. The inability to adapt to evolving data privacy and regulations is also adversely impacted. All of this makes your financial data susceptible to breaches and unauthorized access and eventually complicates the audit process, increases the risk of non-compliance, and invites hefty penalties.

Software Integration Issues

Legacy systems were designed, without considering widespread APIs and interoperability. This is now leading to compatibility issues when modern technology and digital platforms are integrated. All of this leads to time-consuming manual data transfers, hindering scalability during periods of growth. Integration issues also keep a company from capitalizing on the latest advancements in automation, analytics, and cloud-based solutions. Without seamless integration, you also miss out on the benefits of real-time reporting and robust security that modern accounting systems offer.

Slow and Siloed Legacy Software

Traditional accounting systems comprise a web of disparate and outdated applications because of which it is often a struggle to automate and streamline legacy accounting systems. The lack of integration between these apps gives rise to operational inefficiencies while also limiting data sharing and creating data silos. This makes it difficult to have a holistic view of financial information. The complexity of these systems decelerates decision-making and results in slower processes, which can affect client satisfaction. Employees may find it difficult to manage these intricate systems, leading to reduced productivity and increased frustration.

Inability to Adapt to Changing Business Needs

Legacy systems are typically rigid and designed to meet the needs of the past. Adapting them to the current business landscape is often a complex and costly endeavor. This lack of agility means businesses using cannot respond swiftly to market changes, evolving regulatory requirements, or emerging opportunities. It can put them at a significant disadvantage compared to competitors who have modern accounting systems that are adaptable and scalable.

Insufficient Automation

The need for legacy accounting software re-engineering has never been greater as financial institutions strive to stay competitive. The lack of automation features in legacy accounting systems hinders your business’s productivity, security, and agility. Manual processes also increase the risk of human errors and may slow down critical financial workflows. This may lead your business to fall behind competitors who benefit from error reduction and increased efficiency. Outdated systems create data silos, cause reporting delays, inaccurate data analysis, and an increase in financial errors which may put your business at risk. Critical features such as automated data entry and reconciliation are often missing in these outdated systems, leading to inefficiencies.

Outdated systems may no longer receive essential updates and impact business continuity. Plus, the inability to access accounting software remotely limits employee productivity, especially in the current age of remote work. While a legacy accounting system can invite several problems for your business, modernizing it can help mitigate these risks and position your business for sustainable growth and success.

Our client is a US-based finance company providing flexible and highly customized working capital solutions to enterprises across verticals. The fintech client wanted to modernize their outdated accounting system with the latest technology. They were on the lookout for a seasoned tech partner possessing specialized skills in accounting software modernization and analytics.

Challenges They Faced

• Complex Legacy Systems: The existing legacy applications were highly complex, slow, and disparate.
• Integration Challenges: The legacy system struggled to integrate with new technologies.
• Inflexibility: The existing legacy system failed to adapt to changing business needs.
• Lack of Analytics: The existing IT system lacked analytics capabilities.
• Data Mismanagement: Poor management of audit and historical data.

How We Modernized an Outdated Accounting Software

We proposed re-engineering the client’s accounting software into a consolidated cloud-native application. The entire project was divided into four main phases:

1. Application Re-engineering/Modernization: Our team re-engineered their finance management software with Azure and Power BI, resulting in streamlined asset-based lending processes for both the staff and end customers. The previous setup involved five disparate applications for their two business verticals. We developed the user interface using Angular for the front end and utilized ASP.NET Core for the REST API in the backend.
2. Legacy to Cloud Migration: The modernization process included migrating their legacy data to Azure. Core functionalities were migrated from legacy apps and external third-party systems to the newly developed application.
3. Data Warehouse Development: We leveraged Azure Synapse Analytics and Azure services to create the data warehouse. Business data, both structured and semi-structured, was aggregated from multiple databases into the Azure SQL database. Parquet was used for efficient data compression and encoded schemes for enhanced performance in handling complex bulk data. With Azure Data Lake serving as the metadata store, data pipelines were created to support the data design of the warehouse. Azure Data Factory was used to read structured data from the data lake and route it via serverless Synapse SQL.
4. Data Visualization for Varied Reporting Needs: We employed Power BI to provide reporting and visualization of finance data based on identified Key Performance Indicators (KPIs).

Key Features

• Robust Security: A secure system with role-based access, providing single sign-on access from any device or location, contingent on defined permissions for access.
• Efficient Data Management: We implemented separate Online Transaction Processing (OLTP) and Online Analytical Processing (OLAP) databases for managing audit and historical data, offering lower response times for handling queries.
• Precise Business Insights: Our solution delivers accurate reporting and visibility through interactive and insightful reports accompanied by customization options.

Business Benefits Delivered

• 100% visibility into business operations
• 95% increase in employee efficiency
• 98% improvement in IT system performance

At Rishabh Software, we specialize in modernizing accounting software and offer expertise in building industry-leading applications for the fintech industry. Here’s what we bring to the table:

Our Proven Expertise

Our legacy modernization services have helped successfully transform the financial operations of numerous businesses. Our exposure in modernizing accounting software for FinTech and accounting firms speaks volumes about our capabilities. We know these industries’ pain points and challenges, and we have honed our skills to address them head-on.

A Comprehensive Technology Stack

Our team leverages market-leading assessment and migration tools, cloud platforms, Microsoft suite of technologies, integration and testing tools to accelerate your transition. We use cloud platforms to provide a secure, scalable, and flexible platform that ensures data security while allowing for rapid growth. Our Power Platform competency empowers your team with insightful data visualizations and analytics, giving your business the tools to make informed decisions that drive better business outcomes.

Seamless Integration for Effortless Workflows

The orchestrated modernization process revolves around making your daily operations seamless. We create integrated systems that bridge the gaps between various apps and disparate data sources, enabling efficient workflows. No more struggling with siloed legacy systems; we ensure that your new accounting system seamlessly interacts with other critical apps to create a more efficient and productive work environment.

Custom Solutions for Unique Needs

At Rishabh Software, we understand that one size does not fit all. That’s why we tailor our modernization approach to meet your specific requirements. Whether you’re a Fintech firm dealing with complex financial instruments or an accounting firm handling massive client data, we have the expertise to design a solution that perfectly suits your business and client needs.

Footnotes

1. https://go.streamsets.com/rs/535-TEA-657/images/StreamSets_Research_Report-Lifting_the_Lid.pdf

2. https://financesonline.com/accounting-software-statistics/