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Mitigating risks - what customers should expect when ERP software companies consolidate

by Sarah Coish

In today’s competing and open environment of enterprise resource planning (ERP) software companies, it is not uncommon to hear that one of the larger players has decided to acquire a smaller ERP provider. Due to the latest news of Oracle acquiring NetSuite, we have recently received a lot of questions from both existing NetSuite customers, as well as businesses considering buying a new ERP solution. Most of the questions and concerns are related to what effects a consolidation could have on them as a customer. Will this acquisition impact my Total Cost of Ownership (TCO) of my overall ERP solution? That is more than a fair question when a growing business owner is putting it’s trust and dollars into an ERP solution that will affect users across the company – as well as the business itself.

In talking to many prospects that are reviewing new ERP solutions or looking to implement ERP for the first time after using an accounting software package, words like ‘uncertain’ or ‘confused’ are often heard when they are trying to determine how this could affect their purchase or implementation. Obviously the software publisher itself has a host of drivers and reasons they feel the acquisition makes sense. This post is not to speculate or review those. The focus here is on the customer – so we wanted to share the advice we are regularly providing to prospects and existing users that reach out to us when the product they are using or evaluating is going through an ERP software consolidation.

You want to be able to protect your investment – not just financial but time investment that you have put into that solution across your organization. Asking the right questions to your ERP reseller or consulting partner will help guide you and enable you to have the right answers within your organization when your employees hear of such software acquisitions across the press wire. Remember - It is a fair question to ask ‘what’s in it for me?’. Your ERP reseller should be working with you as a partner and be most concerned that you get the answers you need to feel confident when a software acquisition takes place. If you are using a very industry specific solution or add-on, these questions become even more important:

·         Will my existing software agreement/contract be fully honored and any commitments made to me by the ERP software company being acquired?

·         Is there a clear product roadmap for my existing ERP software or will that be changed or re-visited by the company acquiring my ERP software?

·         Are there any changes in my software support, bug fixes and product enhancements, or in how I get support for my ERP solution?

·         Will there be a change to the ERP software publisher portals or intranets I use to access latest product documentation, generate license keys etc.?

·         Are there any changes with your relationship or partner contract as a reseller now that the ERP product has been acquired by a different company? Will this change the way that we are able to work with you directly?

·         Will the new software publisher support multiple products indefinitely?

·         Will the ERP software brand that I am working with be maintained or will there be product re-branding or re-positioning?

·         What relationships will the new ERP software company have with add-on partners for the acquired product? This is a key question if your ERP solution includes vertical or horizontal add-on solutions that allow you to get more for the software or customize further for your business processes

·         As a potential buyer or current customer of the ERP software being acquired, what will be the communications process with me throughout this consolidation? Will my communications come from the acquired ERP company, the new ERP provider or with the ERP reseller themselves?

ERP software company acquisitions and consolidations can have a significant number of benefits – but while the companies are busy working out the specifics and what it means to their own employees, it’s important as the customer that you know the facts and get the answers you need – outside the public media. As a growing business owner or executive, you have enough on your plate. You want to feel supported and confident that you have a stable ERP solution in place that will grow with your organization.

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