Successful ERP Selection in M&A

Selecting the right Enterprise Resource Planning(ERP) system is a critical decision in the performance and growth of a company. ERP is essential for any industry and if selected and implemented correctly, ERP can be a catalyst for sustained growth and success.

ERP in Mergers & Acquisitions(M&A)

Mergers and Acquisitions represent strategic maneuvers that organizations undertake to enhance their market presence, streamline operations, and achieve synergies. In the contemporary business environment, where agility and adaptability are paramount, successful mergers and acquisitions hinge on the effective integration of diverse business processes.

Streamlining Operations with ERP

ERP systems play a pivotal role in M&A scenarios by providing a unified platform for managing core business functions. From finance and human resources to supply chain and customer relations, ERP systems act as the backbone, harmonizing diverse processes into a cohesive whole.

Data Integration for Informed Decision-Making

In the realm of mergers and acquisitions, informed decision-making is the linchpin of success. ERP systems facilitate this by seamlessly integrating data from disparate sources. This integration not only expedites the decision-making process but also ensures accuracy, laying the foundation for a robust and well-informed strategy.

The ERP Selection Process is Key To Success

N2M works with many leading companies, private equity firms and portfolio companies assisting with ERP selections, assessments and implementations. Often we see firms wanting to select an ERP system due to their current needs and cost, without understanding the costs they may incur in modifications to fit their current needs, future needs and also integration costs with their other IT systems.

Industry & Organizational Fit is Critical

ERP systems can be very challenging to implement, and ERP requirements vary by industry and organization. Therefore, companies must analyze their needs and expectations when selecting an ERP system. Functional fit is essential to successful ERP implementation. It’s important to determine which modules your company needs now and in the future and if you require industry-specific features. Your company’s industry, and business requirements and processes should be a primary driving factor in selecting the correct ERP system with the functionality needed to support your unique needs.

Focus on Current and Future Needs

In Private Equity in particular, we see companies often selecting systems based on the portfolio company’s current needs. This can unknowingly lead to additional and often significant costs in modifications to fit all the business requirements and integrate with existing systems.

As many companies are growing their portfolio companies through acquisitions, a thorough analysis should be done on the ERP system to ensure it can provide a platform for growth as well as the ability to integrate without extensive and costly modifications.

Key ERP Selection Criteria

ERP selection is an important and complex process and can be especially complex in M&A. It’s critical to ensure that the ERP system is a fit for the business’s current requirements but also the future growth needs of the business.

Key Criteria for ERP Selection:

  • Functional Requirements Fit
  • Business Alignment & Business Process Analysis
  • Fit for Company’s Current Needs & Future Growth requirements
  • Customization Analysis & Requirements
  • Industry-Specific Functionality
  • Systems Integration
  • Scalability
  • Implementation & Maintenance Cost
  • Vendor Technology & Roadmap
  • Vendor Support
  • Systems Integrator and Availability of Resources

IT Integration Challenges in M&A

” Two thirds of M&A initiatives fail in terms of financial outcomes. The reasons for failure include cultural problems and lack of operative integration – which can be partially related to problems with ERP systems integration.”

IT and ERP integration is often an underrated risk in mergers and acquisitions, while the consolidation of business processes is a crucial factor to success in M&A. ERP systems are directly tied to the business processes of an organization. Integrating two or more ERP systems can be complex and challenging, leading to delays, cost overruns, and decreased productivity if not handled properly.

IT integration can be one of the most costly factors in ERP implementation and some companies often overlook this or don’t fully understand the full cost to implement a system given their IT integration needs with their current systems. When selecting an ERP system you need to understand not just the price of the system but the full cost of integration.

The cost of IT integration, or inaction, and the impact on future IT Total Cost of Ownership (TCO), through unnecessary duplication and complexity can be very high. A thorough technology due diligence can help accelerate the transition lifecycle and maximize value.

N2M – Over Thirty Years of Experience In ERP

N2M ‘s team is comprised of IT and ERP industry veterans with over thirty years of experience. Our team is comprised of the most talented ERP experts in the industry including former Oracle, Workday, Deloitte and Accenture executives, practice leads and senior consultants. N2M is known in the industry for our senior expertise and extensive industry experience.

N2M is an award-winning boutique digital consultancy with specialized experienced in M&A. Differentiated by our agility and specialized expertise, we provide personalized solutions tailored to the unique needs of each of our clients. N2M is a preferred partner to leading companies, private equity firms and portfolio companies worldwide.

Led by a team of technology industry veterans, N2M has been at the forefront of technology for decades driving change and innovation. N2M serves leading Private Equity firms as strategic advisors for technology projects, providing IT & Cyber Due Diligence, IT Integration, Assessments, IMO, SMO Services, ERP, HCM, FN, CRM Selections, IT Implementations, PMO services and more. We provide C-level talent: CIOs, CTOs, COO, CISOs on an interim, fractional & full-time basis

Contact an Expert at N2M for your ERP Selection Needs