This post was previously published on 13 September 2013. For more up to date information on the PIC scheme and other budget initiatives, please refer to our most recent blog post on Singapore Budget updates, with the latest available information from IRAS. For the full details, visit the IRAS PIC site.
Companies set to grow, either on their own or through a merger / acquisition face huge challenges to enable sustainable growth, retain the best talent and work in more efficient ways across all functions. In this week’s post, we will focus on some of those key challenges faced when companies join forces and some of the solutions Blue Ocean Systems can help put into place.
Three main outcomes most companies will agree on when going through a merger;
- Keep customers happy and provide them with improved products / services
- Increase revenue and achieve high returns
- Identify the best systems/processes/procedures from each company and standardise them
Let’s look at each of these outcomes with some common challenges and solutions…
1. Keep customers happy and provide them with improved products / services
Challenges:
- A variety of shared products/services with a possible overlap causing duplication of ordering, storing, marketing and selling. This can also cause confusion to the customer.
- Different ordering, returns and customer service procedures leave customers frustrated
- The customer is forced to take a lower standard of product and/or at an increased cost
- Staff in both organisations are duplicating their efforts across the warehouse, fulfillment, customer service functions and they are becoming disillusioned and unmotivated
Solutions
Ideally during the merger, it was established and agreed whether the right ERP solution is being used by each company and whether that ERP system has multi-company allocation options. If so, the transition will be much smoother, both internally as well as for the consumer.
The right ERP system can help to;
- Eliminate reliance on human memory and individual devices for business data
- Create a single version of the truth to respond quickly to customer queries and increase information visibility and accessibility
- Reduce or eliminate the need for duplicate data entry and potential human error
2. Increase revenue and achieve high returns
Challenges:
- Investors and shareholders are expecting good financial results but obtaining the right numbers is cumbersome and produces unreliable data
- Internal management are not focused on driving revenue until the day-to-day operations are more efficient and their teams are happy
- There is a duplication of work producing financial data, little of which is accurate
- Different data and technology sources make solid financial reporting impossible
Solutions
Possibly the biggest headache of all during mergers; the financials. But, through an efficient ERP system, combining data sources and multiple cost centres is not the nightmare most CEOs fear.
The right ERP system can help to;
- Draw accurate financial data from multiple sources in real time and present it in a clear and meaningful way
- Remove reliance on Excel spreadsheets and individual files for all financial accounting processes
- Eliminate human requirement to produce timely and accurate month end reporting (with SAP Business One your month end closing can normally be completed in less than 3 business days)
- Get your organisation Big Data ready to increase its competitive edge
3. Identify the best systems/processes/procedures from each company and standardise them
Challenges:
- Multiple systems provide varying degrees of accuracy across each department
- Reliance on human memory and non-standard processes create a huge risk factor
- Where non-standard processes might have worked for a smaller company, post-merger processes need to be optimised and standardised for growth
- Employees are unhappy that their role has changed so much; potential loss of key talent
Solutions
Merging two (or more) sets of employees, processes and preferred methods of working can be a human resources disaster if not managed appropriately.
The right ERP system can help to;
- Automate key processes to enable staff to work on business-generating strategies
- Retain key talent who will help to drive innovation and creativity for future growth
- Standardise procedures that, in turn, retain customers and increase profits
- Create best practice methods and meet industry-specific KPIs and requirements
Whether merging your organisation or not, 2013 is an optimum time to look at your ERP solution needs and with financial incentives such as the Productivity and Innovation Credit (PIC) offered in Singapore, you could soon be realising benefits included above as well as;
- Get ready for newer business models: e-commerce (B2B & B2C), affiliate and franchisee management, mobile access and transactions
- Provide greater business real-time information on the performance of a company or group of companies for shareholders
- Solutions that empowered talent want to work with – reduces outflow of high quality employees
- Take advantage of new technologies, like SAP HANA, to stay ahead
- Read our recent PIC post here
To take the next step towards the right ERP solution for you, contact the friendly Blue Ocean Systems team of SAP experts today.