Strategies for Successful Post-Acquisition Integration

  • by David Hannon, Contributing Editor
  • February 17, 2011
Management
As the economy improves and companies’ access to capital continues to grow, so too does the amount of mergers and acquisitions (M&A) across a variety of industries. If M&A activity reaches your company, will you be prepared to integrate unfamiliar systems together under one unified ERP environment?

A recent survey from consulting firm BDO USA found that 78 percent of CFOs at technology firms expect merger and acquisition (M&A) activity to increase this year, as companies look to return to pre-recession numbers more quickly than organic growth typically allows. “After scaling back on R&D and operational expenses during the recession, many technology companies are flush with cash and well positioned to spend,” says Aftab Jamil, partner and national leader of the technology and life sciences practice at BDO USA. “M&A will be a primary tool for companies looking to boost profitability through strategic growth and increased market share." See the sidebar Where will M&A heat up most? for sectors that will see the most growth.

Where will M&A heat up most?

Sector that will see most M&A growth        % responding

Traditional software sector                                32%

Media and telecom                                           30%

Biotech and life sciences                                   15%

Clean technology                                              13%

Hardware                                                         10%

Source: BDO USA survey of technology CFOs

Jill Hatton, executive vice president and co-founder of Symphony Consulting, says the companies she’s working with aren’t talking about “an acquisition” this year, but are considering “acquisitions” in the short-term — some planning as many as three or four this year alone, she says.

Beyond new acquisitions, Ali Sarraf of Enowa Consulting points out there are still many companies that never fully integrated previously acquired businesses into their ERP systems — projects that now may be reassessed as resources become available. “Between all of these cases, there is a tremendous amount of activity happening around SAP ERP,” says Sarraf.


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