Strategies on Changeover of ERP Systems in an Acquisition

Hi Kristi, I think it really depends on the size of organizations and structure of acquisition as to whether a whole new ERP system is required. When the deal is a smaller asset purchase or carve out, the acquired company retains their A/P, A/R, etc. The ERP of the buyer would just be updated to do go forward billing of the acquired customers and existing reporting would be modified incorporate the new business unit / set of customers. In an equity purchase situation, or addition of a new division or similar, care needs to be taken in the diligence period to determine the size and scale of the organization being acquired. From my experience, the best approach is to bring in IT and ERP experts who know what to look for in terms of transaction volume, complexity of ERP configurations, etc. They can then create a realistic frame of reference for what is needed in future and what the associated cost might be. In our case, we haven’t yet needed to fully replace our ERP. We have had to add integrated tools and expand licenses but the cost of that is a fraction of a full replacement.