Nowadays a critical part of the enterprise lifecycle are the ERP system changes brought about by investments and divestments. For an enterprise, the choice of business unit to buy or sell and the systems they run, can be the difference between remaining in business or not.
Most people are aware that an investment involves the acquisition of a business and often leads to the requirement to review or purchase additional ERP licenses or purchase an alternative ERP solution to support the activities for the acquired business, often to bring it in line with the wider enterprise plans. Divestment, also known as divestiture, is the opposite of an investment, and it is the process of selling a business for either financial or competitive goals, this divestment process often leads the purchaser to seek a replacement ERP solution.
When an enterprise acquires a business running SYSPRO, we often see that during the systems review stage, SYSPRO, in almost all cases, is categorically proven to be a better fit and more cost effective solution than anything else available in the market. We also find that following an acquisition there is a very low appetite for a complete re-implementation of an ERP system. For this reason and despite the fact that a good proportion of our own K3 customers have been acquired by much larger entities, they remain – as the larger entity has chosen to remain with SYSPRO and simply integrate the solution back to the groups’ ERP system using K3’s DataSwitch Integration platform.
Divestments though are on the increase, mainly due to mature markets and tough trading conditions. EU businesses also want to be lean and Brexit-ready and don’t want to get caught out with poorly performing business units that aren’t suited to their portfolio and specializations.
From a divestment perspective, there has been a marked increase in the number of investors choosing to opt for SYSPRO for the divesting manufacturing business, especially where there has been a need to dramatically cut the exorbitant Tier 1 ERP annual license and support fee and where the requirement exists for the new system to be implemented quickly and efficiently and during the period of transfer between the entities.
So, if you are looking to buy a business or you are an investor looking for a solution for a divested business from a larger enterprise make sure it has a strong ERP solution that you won’t have to replace through acquisition.
The important thing is ensuring continuity and business as usual.