The obsolescence of Financial Consolidation Tools: a project to be implemented before 2030
For CFOs, this year marks the beginning of a major project. Indeed, the 2030 deadline, which will mark the end of maintenance for traditional financial consolidation tools, is approaching. What timeframes should be expected to anticipate their modernization?
What new features can be expected from the next generation of solutions? These are important questions that also affect business attractiveness.
To answer these questions, we interviewed Anna Tock, Director of the Finance Transformation Business Unit at VISEO in Asia, who combines her knowledge of finance business processes with technological expertise in information systems.
Financial consolidation is an accounting process that involves grouping the financial statements (balance sheet, income statement, etc.) of several legal entities within the same group, to present them as if they formed a single company.
The primary objective of financial consolidation is to publish data within a prescribed regulatory framework. Listed groups must publish information audited by external firms, guaranteeing the reliability of the data. This particularly impacts the groups’ ratings and valuations.
The consolidation department, within the finance department, produces financial information monthly, semi-annually, and also allows for the assessment of discrepancies between actual performance and budget forecasts.
The second objective is therefore also to manage the performance of groups and their various activities.
Financial consolidation thus presents crucial challenges, both internally and externally, particularly for listed groups.
Transformation of financial consolidation tools: an imminent necessity
Two main applications have historically dominated the financial consolidation market: SAP Financial Consolidation (SAP FC) and Oracle Hyperion Financial Management (HFM). These technologies, in use for 15 to 20 years, are approaching obsolescence, with vendors postponing their end of maintenance until 2030.
However, obsolescence is not the only factor driving transformation projects. The cloud is playing a major role in this evolution. New solutions developed in this environment offer simplified maintenance, increased performance, and the ability to adapt to reorganizations and data massification. Furthermore, the integration of new standards such as the CSRD, the Pillar 2 Directive, and IFRS 18, scheduled for 2027, adds even more complexity and requires tool modernization.
Transformation timeframe: strategies and challenges
Most groups are in the scoping and benchmarking phase to define the solutions to be adopted. Scoping a project can take a few months to over a year depending on the context, while implementation can extend from one to three to four years for the most complex groups. This timeframe raises the risk of a bottleneck starting in 2026, when integration skills will be particularly in demand, in an ecosystem where experts are already in short supply.
Early adopters have already started their projects. While they take the risk of committing to still-immature solutions, they benefit in return from the availability of consultants and better guarantees from software vendors.
Conversely, some groups, for budgetary reasons, will wait until the last minute. It will then be necessary to maintain existing solutions while upgrading them to comply with the new accounting standards.
Innovations and the future of new consolidation solutions
With the increasing volume of data, new solutions promise major innovations, including:
- Technological performance: increased storage capacity, better data management, and the integration of AI and predictive features to facilitate information extraction and analysis.
- Data retrieval and visualization: modernized tools will offer more intuitive interfaces, accessible on different devices (tablets, smartphones), thus facilitating the daily use of financial data.
- Simplified administration: new cloud-native solutions will reduce the complexity of IT architecture, simplifying IT department management. However, these improvements are still insufficient to significantly reduce administrative teams.
- Diversification of uses: cloud platforms will integrate more diverse functionalities such as budgeting, simulation, and specific modules for CRSD or Pillar 2 directives. These tools will facilitate process automation and improve data reconciliation.
Technological modernization contributes to talent retention and the attractiveness of companies equipped with modern solutions. Technology thus creates value for both groups and their employees, offering more understandable systems adapted to the needs of consultants and consolidators.