Growth rarely leaves a manufacturing company exactly as it found it. New facilities, acquisitions, and markets become part of the business, often bringing their own systems and processes with them.
For a while, that complexity may be manageable. Teams adapt, local processes keep working, and the business keeps moving. But the problem (or problems) often become apparent later, when the company tries to integrate an acquisition, modernize its ERP, centralize operations, or obtain a clearer view across the organization.
At that point, years of growth can become years of accumulated complexity. The challenge for manufacturers is figuring out how to simplify what they have built without slowing down what comes next.
Growth Adds More Than Capacity
Growth tends to add to the systems and processes already in place rather than replace them. Over time, that can make integration increasingly difficult.
That challenge is showing up in manufacturers’ technology investments. In fact, in one survey, 89% of industrial products respondents said they had not realized the full results they expected from their technology investments. More than half, 52%, pointed to integration complexity as a reason.
Here’s one real-world example of how growth can create backend complexity. After a series of acquisitions, Hershey said several of its newer businesses were operating largely in silos. Rather than continuing to manage those businesses separately, the company began bringing them onto a common SAP S/4HANA environment to improve consistency and visibility across operations.
This example is a useful reminder that growth does more than make an organization larger. It creates more pieces that eventually need to fit together.
How Business Growth Reshapes Finance
Finance teams often inherit the complexity created elsewhere in the business. That can leave organizations managing financial environments that grew piece by piece rather than by design. Medical technology and device manufacturer, Medtronic, had accumulated more than 100 institutional banking relationships and nearly 1,000 bank accounts as the company expanded, including through acquisition.
At that scale, the challenge is not simply the number of systems or relationships involved. It is the work required to keep them coordinated. Finance teams still need reliable cash visibility, consistent controls, and processes that can support the business as it continues to change.
As those layers build, finance teams can end up managing a financial environment that reflects the history of the company rather than the way it would be designed today. That is what makes financial complexity difficult to address. Most of it began as a reasonable response to a real business need. The challenge comes later, when finance needs those separate pieces to operate as one environment.
The Cost of Carrying Complexity Forward
A complex financial environment can be manageable until the business needs to change. That is often when years of local processes, banking arrangements, and workarounds become harder to ignore.
That integration work can be significant. Most companies reported M&A transactions in advanced manufacturing and mobility carried integration costs exceeding 5% of the target company’s revenue. Those costs extend well beyond finance, but they illustrate how much work can follow a growth decision once systems, infrastructure, and operating models must come together. For finance leaders, existing fragmentation can add another layer to that effort.
ERP modernization is a good example. Moving to a new ERP can create an opportunity to simplify, but it does not automatically resolve the surrounding questions about how banking and finance processes should work across the organization.
Adhesive solutions manufacturer tesa, faced that decision during its global SAP transformation. Rather than simply carrying its existing banking structure of multiple ERP environments and disparate e-banking tools forward, the company used the broader initiative to partner with TIS to utilize one unified cloud-based platform that seamlessly integrates with SAP. This helped simplify an environment that included more than 90 banks and 430 bank accounts, ultimately reducing those numbers by more than half.
The question for other manufacturers is whether a transformation actually reduces complexity, or simply moves it into a newer system.
Making Transformation Decisions That Last
These decisions are particularly relevant as manufacturers pursue growth and modernization at the same time. In fact, 64% of manufacturing CFOs named data analytics and ERP upgrades among their top two technology investment priorities. Acquisition integration and active M&A also appeared repeatedly among CFOs’ near-term priorities. In other words, many finance teams are not choosing between growth and transformation. They are managing both at once.
So for finance leaders, the question is not simply whether to standardize. It is deciding where standardization will make the biggest difference without creating unnecessary disruption.
That can mean determining which processes should be consistent across the organization, how banking and payments should fit into an ERP transformation, and whether existing processes should be carried forward or simplified along the way.
Those decisions will look different for every manufacturer. The important thing is making them deliberately rather than allowing the next transformation to inherit the complexity of the last one.
Turning Growth Into a More Scalable Model
For manufacturers preparing for an ERP modernization, acquisition, or finance transformation, these questions are part of the larger initiative. Addressing them early can help prevent existing complexity from simply being carried into the next environment.
TIS and Manufacturers Alliance will explore these issues in an upcoming webinar, examining how manufacturers are approaching ERP modernization, banking and payments, and scalable finance operations. Register for our upcoming Manufacturers Alliance Webinar today.
