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How can merged companies benefit from cloud-based ERP applications? And what benefit could Platform-as-a-Service (PaaS) bring?
Remember when you first moved into your college dorm or the first time you rented an apartment with a friend or significant other? If your experience was like mine, I imagine there was a little chaos and a lot of waste. Suddenly, you have two of everything. Two sets of silverware, two sets of plates, two sets of pots and pans. Then, of course, you have to learn how to live with that person and adapt to their way of doing things. Maybe they don’t think doing the dishes is a big deal, or maybe they don’t like the toilet seat being left up.
Once you get past the pains that come with adjusting to life with a new person, having a roommate can bring a lot of benefits from saving money to companionship to opportunities to learn about different opinions. Eventually, you become like an extended family and experience all the perks that come with that.
Mergers and acquisitions is a lot like getting a roommate. It has the same benefits: opportunities for new revenue streams, new ways of doing business and the creation of a larger family with whom knowledge and experience can be shared for the benefit of everyone. At the same time, M&A shares a lot of the same pains. Suddenly, you have two of everything, your differing business practices might not mesh well, and often something has to give.
Much of the cost of M&A comes down to ERP. Unlike a second set of silverware, these big, monolithic systems become so complex and tied to day-to-day operations that throwing one out just won’t do. You can’t afford to lose any functionality. At the same time, two ERPs would be unwieldy. Conventional wisdom says to integrate the two, and break out the important parts of the new ERP into standalone apps. Of course, that would require extended development time and cost on top of the long-term problems of connectivity and communication that might arise from having such a fractured infrastructure.
A simple way of adding value is to adopt a cloud strategy when it comes to M&A. A good PaaS with rapid application development (RAD) tools can reduce the time and cost of breaking those ERP functions out into manageable chunks, even if it doesn’t immediately solve the fragmentation problem. Additionally, the cloud is a natural place for data to live, and many solutions will give you the option of whether you want to utilize a public, private, or hybrid model based on your needs. RAD, combined with robust data integration features, means that finding a place for everyone’s stuff in your new “apartment” is no problem.
In the long run, a PaaS can even offer solutions to the communication problem that comes with getting to know a new “roommate,” by providing a single place to access everything you need and a community platform through which ideas and solutions can easily be shared. M&A is likely to always be a complex and difficult beast to manage, but it doesn’t have to be as hard as it is.
As the senior director of product marketing and strategy for the Progress solutions and audience marketing team, Paul Nashawaty keeps his eyes peeled on what enterprises are doing about big data as it relates to digital transformation. Paul is responsible for applying practical business methodologies using technological solutions to drive success in organizations.
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