Consolidating Your Finance Tech Stack in 2024

Given the focus on profitability and efficiency, consolidation becomes a major trend as CFOs look to bring spend under one roof and manage fewer contracts.

This is especially true for the finance tech stack. Many companies still use point solutions with redundant features across various functions like accounting, payroll, and invoicing. Additionally, suppliers continue to diversify their offerings to streamline functionality. 

There are plenty of opportunities to consolidate your tech stack to achieve advantages like cost savings and improved functionality, but doing so comes with challenges as you rationalize and migrate solutions.

Ultimately, consolidation may be the best option for your organization as it is for many other companies, but you’ll want to ensure you’re fully aware of the benefits and challenges (plus how to overcome them) to make an informed decision based on the needs and resources of your team. 

Benefits of consolidating your finance tech stack

Streamlined processes

Instead of using multiple systems across different financial functions like accounting, payroll, and invoicing, a single integrated platform can handle all these tasks efficiently. This reduces redundancies, streamlines processes, and improves overall workflow.

Data accuracy and consistency

‍With all financial data stored in a central system, there's less chance of errors due to duplicate entries or discrepancies between different platforms. This enhances data accuracy and ensures consistency across financial reports and analyses.

Cost savings

‍Consolidating finance software can lead to cost savings in several ways. Companies can eliminate the expenses associated with maintaining multiple licenses, reduce training costs for employees who only need to learn one system, and potentially negotiate better pricing with suppliers for a comprehensive software package.

Improved decision-making

‍A unified finance platform provides a holistic view of the company's financial health. This enables better decision-making by giving management access to real-time data and comprehensive analytics. Leaders can identify trends, forecast future performance, and make informed strategic decisions more effectively.

Enhanced security and compliance

‍Managing financial data through a single platform can strengthen security measures and simplify compliance with regulatory requirements. Companies can implement robust security protocols and access master controls to protect sensitive information, while ensuring that all transactions adhere to industry regulations.

Challenges of consolidating your finance tech stack

Supplier lock-in (dependency on supplier)

Once a company invests significant resources in consolidating finance software with a particular supplier, switching to an alternative solution can be costly and disruptive. This creates a sense of supplier lock-in, where companies feel constrained by their reliance on a single provider and have limited flexibility to explore other options. 

This reliance also poses risks, especially if the supplier experiences downtime, discontinues product support, or fails to deliver updates and patches in a timely manner. Companies sre left vulnerable to disruptions that may limit their ability to innovate with new technologies.

Here’s how to address supplier lock-in challenges:

Integrations

‍Consolidating finance software often involves integrating disparate systems and migrating data from legacy platforms.

Here’s how to address integration challenges:

Customization limitations

‍While integrated finance solutions offer a wide range of functionalities, they may not always meet the specific needs of every department or business process. Companies may encounter limitated customization options, forcing them to adapt their workflows to fit the capabilities of the software.

Here’s how to address customization challenges:

Training and adoption

‍Transitioning to a new finance software system requires comprehensive training for employees to familiarize themselves with the new interface and functionalities. Resistance to change and the learning curve associated with mastering a new platform can impede adoption and productivity in the short term.

Here’s how to address training and adoption challenges:

Most popular finance tools

Here is an aggregate of the most popular finance software companies are currently using. Access our Q1 2024 Finance SaaS Benchmarks Report to get the full report and see how CFOs are structuring their finance tech stack across different company sizes.

Optimize your tech stack with Tropic 

While consolidating your finance software offers numerous advantages, it’s crucial for companies to weigh potential challenges like supplier dependency, integration, customization, and adoption. Remember that successful implementation requires thorough planning, stakeholder buy-in, and ongoing support to maximize the value of the consolidated software solution. 

Tropic can help you navigate these decisions to determine the most cost-effective avenue for your business. Through additional supplier pricing data and expert negotiation insight, Tropic gives you ultimate leverage to discover and take advantage of any strong consolidation opportunities within your tech stack. 

Get started by submitting a free savings assessment today.

Recommended Reading

• Buyer Guide: 4 Questions to Ask When Evaluating Third-Party Pricing Data
• ‍Q1 2024 Finance SaaS Benchmarks Report‍
• 5 SaaS Financial Metrics CFOs Are Obsessing Over In 2024