top of page
  • Tony Zeigler

Dynamics 365 Finance and Supply Chain Management: Optimizing ERP for Mergers and Acquisitions

Key Considerations for ERP Integration Strategies During Mergers and Acquisitions


In the news, we often focus on how a merger will make two corporations more deeply entrenched as an industry juggernaut. While considering the consequences of the acquisition of power is exciting, this article delves into the ERP integration strategies crucial for incorporating companies during mergers and acquisitions.


Every company has its own systems and software for conducting business, which is why consolidating both businesses onto one ERP platform and ensuring consistency in operations during a merger is complicated and difficult. For example, if two companies operate on the same ERP platform, such as Dynamics 365 Finance and Supply Chain Management, they may still have separate modifications, configurations, or even business processes. So, what happens to the technology in the event of a merger or acquisition? When should your technology executives start to decide which technology to keep and which to eliminate? Do you start with just integrating GL transactions, or do you immediately refactor one company’s business process to match the other’s business processes? Or do you take the opportunity to evaluate both business’s processes and streamline both? Incorporating ERP integration strategies during mergers, specifically using Dynamics 365 Finance and Supply Chain Management, can streamline processes and ensure a smoother transition.


What does a fully optimized technology footprint look like?


A business that has fully optimized its technology footprint has incorporated its operations as much as possible within a single ERP, only relying on third-party software vendors where necessary. While industry-specific platforms are available, for growing companies that may expand, an ERP with a broad and deep background such as Dynamics may be a better choice to ensure the greatest footprint within a single ERP system. The second aspect is ensuring similar business practices between units, and in support of that using similar configurations and modifications.


The following are common steps of integration during mergers and acquisitions.


Effective ERP Integration Strategies for Mergers Using Dynamics 365


  1. Integrating General Ledger Only Say Company 1 purchases Company 2. The first and most common initial step to integrate the two companies is to retain Company 2’s technology and operations and integrate their financials to incorporate into Company 1’s general ledger account. This way Company 1 can adhere to financial reporting regulations and Company 2 remains intact and functioning. In this process, Company 1’s technology is only configured to record Company 2’s financial reports and is not concerned with streamlining processes and operations or with visibility, yet. While this is the initial step for many businesses during a merger, it often leaves a lot of potential value on the table. So the next question is how and when to integrate, replace, or configure Company 2’s technology.

  2. Refactor the acquired company’s business processes to match organization-wide processes To reach that ideal technology footprint where redundancies are limited and operations and processes are streamlined, there comes a point where Company 2 must adopt the processes and technology of Company 1. To do this, there has to be a cross-functional team of representatives from both companies to discuss and iron out the to-be processes and create a migration plan. Along this path, businesses realize value by consolidating software and thus being able to retire unused/obsolete systems. They also realize value by streamlining inefficient processes. Once this strategy is complete, it is easier to cross-train workers within the business, and it also provides vendors and customers with a common interaction.

  3. Optimization across the board If you don’t have a set of processes that you feel confident about implementing across the organization, you can take this opportunity during a merger to review the full processes. This strategy is similar to strategy 2, but the messaging gives it another set of pros and cons. In this strategy, workers are more open to considering optimizations that impact existing business units, however, executives will have to work harder to control scope. The cross-functional team is still necessary but the direction they take is going to lead them towards more in-depth discussions of current business processes. It is suggested to focus the team to an individual area, such as accounting or manufacturing while scoping this activity. The benefit of this strategy is similar to strategy 2, but it can extend to existing business processes.


Where technology and business consultants come in handy


By leveraging Dynamics 365 Finance and Supply Chain Management, companies can achieve efficient ERP integration, leading to optimized business processes and successful mergers. However, even in the same industry, there are no two businesses that are exactly alike. That’s why consultants, such as Strategic Solutions NW, who have experience working in various industries with companies using different configurations can offer valuable process guidance and technical support during acquisitions or mergers. Read our case study with Planar and how we implemented Natural Point with Dynamics 365 Finance and Operations.


Streamline your business with Dynamics 365 Finance and Supply Chain Management


Strategic Solutions NW is a tight-knit tech management consulting company headquartered in Beaverton, OR with clients around the world. We specialize in integrated software implementation and recovery, applying every solution with a business-wide approach. Our repertoire includes creating and managing the accounting function for 500 million-dollar manufacturers, specialized forest product experience, and longstanding partnerships with a swathe of major software vendors. Led by three partners with decades of experience in software and business solutions, we approach each client with a long-term relationship in mind, providing continued support and communication beyond project timelines. Contact us if you’re thinking of taking your enterprise to the next level.

11 views0 comments


bottom of page