Post merger: do you need a consolidated ERP system?

Post merger: do you need a consolidated ERP system?

How do you achieve a single ERP system across all businesses in a newly merged organisation?  Is a single ERP even necessary? In a newly merged organisation where Oracle, JDE, SAP, Infor and other ERP systems co-exist, consolidation of up-to-the-minute, accurate information for purchasing poses a huge challenge.  In a Bain report, they said that one of the reasons mergers and aquisitions fail is poorly managed systems integrations. Where the potential commercial benefit runs into millions, many consider a single ERP system across all parts of the business to be the solution.  At the same time, anyone who understand ERP knows that this is a hugely complex and time-consuming undertaking. The good news is that we have proven that ERP consolidation isn’t always necessary.  For businesses where complex trading agreements are commonplace and pricing is determined by rebates and retrospective discounts we have implemented DealTrack as an alternative to using a single ERP system for the purposes of consolidated deal management. If you are a business that buys and sells finished goods (like building materials, wholesale distribution and buying groups), here are a few questions to ask yourself before you think about consolidating your ERP systems:

  • Do any of my ERP systems actually give me ALL the information I need to strike better deals?*
  • What would be the cost of actually setting up a single ERP system and which one would we choose?
  • Do purchasing processes essentially work OK in their disparate systems and therefore do we actually need a single system?

*  You might want to read our blog “Why your ERP system doesn’t cope with rebate management” for more information. Look hard at point 3 above — for many, the commercial benefit is in striking the right deals with suppliers — and to create those deals requires accurate consolidated information, not systems. Enable helps businesses to continue operating their mix of ERP systems whilst at the same time enhancing their buying power through consolidating purchasing information and providing a solution to deal management and rebate tracking. Enable provides functionality to record, track, manage and negotiate complex trading agreements involving rebates. To find out more download our guide “Realising M&A synergies faster”.  It is written for businesses looking to consolidate trading agreements across disparate ERP systems — as often happens post merger or acquisition.

Andrew Butt

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