In a perfect world, the time available before an acquisition is closed is sufficient to fully assess the business processes, personnel, information systems and myriad of issues which need to be considered to develop a detailed plan for the business systems of the company to be acquired. This undertaking can be very challenging when multiple business systems are involved.
In the real world there is often not enough time before an acquisition is closed to adequately develop a plan. The detailed information available from due diligence is usually not available until later in the acquisition process. If you do not have time for adequate planning, the best scenario for dealing with multiple business systems may be to delay a final decision until after the acquisition is closed.
This approach is possible if you use consolidating software which can pull data from disparate business systems. You can continue to operate your legacy systems and the legacy systems of the acquired company separately, and use consolidating software to provide the data and reports needed to consolidate results and manage the combined companies. Cloud-based consolidating software applications are available, which facilitates installation and operation.
WHAT TO DO NEXT?
Assuming you have bought yourself some breathing room, you can finish developing a plan for dealing with multiple business systems post acquisition.
The key issue to be considered in developing a plan is the level of integration of the business systems, if any, that is needed to successfully operate the combined companies going forward. This largely depends on the similarity of the businesses and the amount of intercompany activity anticipated between them.
The more similar the businesses are in terms of customers, products, services and businesses processes, and the greater the amount of intercompany activity, the more likely it will be that the business systems should be integrated.
If the businesses are not similar and intercompany activity is limited, then it will probably make more sense to keep the legacy business systems and use consolidating software to pull data for consolidation and reporting.
Another consideration is that integration, while it may be beneficial, may be too expensive and too disruptive a process to undertake in the near term. The architecture of your legacy systems may not be scalable enough to handle the data and transactions of another company, so that you would have to migrate to a new platform. In these cases it may also make more sense to keep the legacy systems of both companies and overlay a cloud-based consolidating software application.
BUSINESS SYSTEM PLAN
The business system plan you finish developing should include a thorough analysis of the key elements including:
- Organization and personnel
- Business culture
- Business processes and procedures
You may decide to keep separate legacy systems, and utilize consolidating software. You may also find that some of the business applications could benefit from automation. In these cases you should partner with an experienced software provider that can sync information from virtually any business application, and has experience automating accounts receivable applications.
Lockstep Collect is a leader in cloud-based and premise-based software solutions for consolidating data from disparate business systems and automating account receivable processes.
If you would like to learn more about how you can benefit from consolidating software and accounts receivable automation. Please contact Lockstep Collect at www.lockstep.io.