Rob Steele, CFO at iplicit
This week’s headlines have not been kind to the National Crime Agency (NCA).
According to a report from His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS), the agency’s outdated IT systems are undermining its very ability to fight serious crime.
The watchdog’s report painted a bleak picture. Fragile applications, poor connectivity, lack of mobile computing, and years of underinvestment leaving the agency weighed down by inefficient, legacy infrastructure. Inspectors couldn’t even find accurate, costed plans for modernisation. Although a “ten-year IT strategy” does exist, phase one of which is now complete, the second is largely dependent on uncertain funding.
The NCA isn’t alone. Just last month, HM Courts & Tribunals Service (HMCTS) faced its own IT scandal when long-standing (and covered up) flaws in its case management system caused evidence to vanish from child protection and tribunal cases. Whistleblowers compared it to the Horizon Post Office debacle.
These two stories hitting the headlines back-to-back lifts the lid on a much bigger issue impacting organisations across the UK, particularly in the midmarket. Core system use-by dates are being ignored, warnings are being brushed aside, and upgrades are being delayed.
It’s an issue that’s particularly rampant amongst midmarket finance functions. They’re among the worst culprits for holding onto outdated systems, with tens of thousands of midmarket organisations in the UK still reliant on legacy, on-premises finance software. Much to their own detriment, too, with processes slowing to a crawl, errors creeping in, and teams left overstretched and frustrated.
Despite the risks, many midmarket FDs are reluctant to change. The reality is that, for many, the thought of changing finance systems can feel a lot like preparing for major surgery. FDs know the process can be stressful, disruptive, resource-hungry, and carries the risk of failure. Many still bear scars from historic implementations that went badly in previous roles or organisations, derailing operations, going over budget or taking months – if not years – longer than promised. This “pain factor” is one of the biggest barriers to modernisation. Like the dog lying on the nail in Les Brown’s parable – it hurts, but not quite enough to move.
There’s also the fear of career damage. Get a core system upgrade wrong, and you could be remembered not for your successes, but for “that failed finance system.” For cautious FDs, sticking with the status quo can feel safer in the short term.
The real cost of doing nothing
But there is a hidden danger in this inaction. Outdated systems come with mounting inefficiencies and risks that grow worse with every passing year. Many midmarket finance leaders admit their month-end closes drag on for more than a week, with just under a third saying the process takes more than two. That is time lost to manual consolidation and chasing figures that should be readily available.
Legacy systems also force teams to rely heavily on spreadsheets and duplicate data entry. Instead of supporting decision-making, they act as static repositories where workarounds pile up at both ends of every process. As systems grow more cumbersome, the risk of error only increases, especially when modern controls and cloud-based security are missing. We recently saw WH Smith take a major hit after a £30M revenue recognition blunder. For midmarket finance teams, managing revenue recognition or other critical tasks in manual spreadsheets could bring similar consequences if errors creep in and things go wrong.
Above all, older systems act as major bottlenecks to growth. Organisations end up hiring more staff just to keep the wheels turning, rather than improving efficiency. And as the scandals at the NCA and HMCTS have shown, it isn’t just an internal problem. Sticking with outdated systems sends a bad message to stakeholders, employees, and investors: that your organisation cannot manage risk or adapt to change. That it’s “behind the times”. For FDs, that reputational damage can be personal.
The cost of modernising might look big on paper, but the truly frightening cost is that of doing nothing. Every month spent limping along on legacy systems compounds wasted hours, hidden risks, and lost opportunities.
A wake-up call for FDs
Luckily, many of the doubts FDs have about upgrading systems can be easily dispelled today. For midmarket finance teams, budgets, time and workload remain a challenge, yes. But it’s important to note that there are cloud-based solutions on the market today that are purpose-built for SMEs and can often be implemented in as little as 15–20 days. Modern systems have evolved way beyond the long, drawn-out and costly implementations of on-premises ERP, and can, in fact, be flexible, scalable, and pain-free.
The way forward is clear. Midmarket organisations must move away from outdated, on-premises finance systems and embrace modern cloud platforms before it’s too late. Modernisation should be treated not as a painful distraction but as a strategic investment that protects your team, strengthens resilience, and restores efficiency.
The scandals at the NCA and HMCTS should serve as a wake-up call. Failing to act now risks repeating their mistakes, with damaging consequences for efficiency, reputation, and leadership credibility. For FDs, the temporary disruption of change is nothing compared to the long-term cost – and risk – of doing nothing.