ERP - Integrating Acquisitions
Challenges in M&A
Mergers and acquisitions are raining in banking and financial industry. Recently there have been a lot of them in Banking space across geographies to meet different needs of organization varying from survival to growth. However most of initiatives fail to deliver expected outcome due to various reasons including system integrations.
To meet M&A objectives, firms should have proper strategic direction on system integration and back office works. Firms should focus on two different areas like process and data integration in a phased manner. Data integration should happen first followed by Process integration to move toward Centre of Excellence
A clear integration model and strategy needs to be chalked out for ERP integration of the merged entity with a proper project charter and governance. Some key directions can be
a) The internal IT strategy should aim to integrate, centralize, outsource, and economize
b) Power and Politics should be properly managed i.e. more time and money should be spent for BPR and change management
c) Innovative strategy to retain employees with relevant knowledge is key for integration
d) An excellent communication strategy is important
e) Focus on gradual IT cost reduction by Application portfolio rationalizations
The integration of two ERP systems is a complex project, which involves several challenges. The important things to be kept in mind are:
- A high degree of integration of the different systems can provide large benefits
- An excellent communication strategy is important
- Maintain competitive parity in technology usage
- Focus on gradual IT cost reduction
