Infosys-Oracle Blog

As companies tread through this growth trajectory, the million dollar question here is from where the growth will come. Typically companies have followed both inorganic and organic paths to grow. While, organic growth is time consuming there are challenges in terms of integration for inorganic growth. And as consolidation happens in the market place, mergers and acquisitions are the immediate fallout.

There are various reasons why acquisitions happen, namely access to markets, better synergies, economies of scale. While in most of the cases a proper due diligence is done before a go/no-go decision, there are cases where companies are bought over a gut feeling. But one thing companies miss is the kind of ERP systems which they have.

Once the acquisition decision has been taken, every company has to go through the pangs of the integration process.  Different cultures, different policies, different systems are some of them. Leaving aside the debate about which is better, SAP or Oracle, a big challenge here is which system to follow. Company A is on Oracle and has acquired a Company B which is on SAP. The customer is confused because if it is a mixed order, he does not know whether to Order it through Company A and Company B because the two systems are not integrated. And even if we decide to have integration points between the two systems, there is the additional challenge of building interfaces to synch up the two systems.

While the logical way is to have one system, but it is not easy as it looks to be. Even if the Company B is to be brought over to Oracle, the process is time consuming and there is the additional task of educating the end users of Company B. And believe me, it is very difficult to let go of something you are so used to doing.

ERP is always a business enabler and if the acquisition has the potential to trigger growth, it makes perfect business sense to go ahead even at the cost of disparate systems. After all, this is more of a strategic move and the company is in business because of the products which it is selling and not because it has an ERP system. With SOA coming up in a big way, future integrations are going to be lot simpler. But it is always prudent to have ERP as one of the decision parameters to minimize the birth pangs.