So, you just found out that your ERP software vendor has been acquired. Yikes!
Unfortunately, in today's world, mergers and acquisitions are pretty common, especially in the software industry. But that doesn’t mean you automatically know how to handle them. In this article, we’ll give you some pointers on how to do just that.
Understand the Impact
When a software vendor gets acquired, it can have significant implications for its customers. You might experience disruptions in support, delays in product updates, or even changes in key relationships. In the worst-case scenario, you might be forced to switch platforms or vendors altogether if the acquiring company decides to discontinue the original offering. So, it's essential to assess the potential impacts and prepare for possible changes.
Do Some Research
There are always press releases when an acquisition happens. Read them. They will give you a lot of information about what the acquiring company’s primary business focus is. Is it the same or different from your former provider? Do they mainly focus on ERPs for healthcare, education, local government, private companies, etc.? Look at the other companies that the acquiring company owns. Do they have a competing ERP that you’ll have to switch to eventually?
Ask Tough Questions
Start by asking your vendor some tough questions about the future of your current solution. Find out why the acquisition took place and how it will affect the product and its support. Understanding the acquirer's intentions and plans will give you insights into the fate of your system. Dig deep and evaluate whether your current solution is still the best choice for your organization.
Do Your Due Diligence
Treat the acquiring company as a new vendor and conduct your due diligence. Create a list of questions to ask the acquirer, such as the product roadmap and future plans for leadership and customer support. Reach out to the acquirer's current customers to get their feedback on the vendor's performance, implementation, customer service, and product quality. Update your due diligence process to reflect the changes brought about by the acquisition.
Be Prepared for Possible Issues
Acquisitions can sometimes lead to unintended consequences for customers. Be ready to address any potential issues that may arise. Prepare an exit strategy in case the product you rely on is discontinued or the quality of customer support declines. Keep an eye out for cost-cutting measures that could impact system cybersecurity, service levels, and product development. Active monitoring of the new vendor's performance is crucial to ensure that your needs are still being met.
Consider Alternatives
While going through the acquisition process, it's wise to research alternative solutions. Update your requirements document and evaluate whether other vendors can better meet your organization's current and future needs. Start the search early, so you have enough time to make an informed decision and migrate if necessary. Engage with management to align their preferences, understand budget constraints, and assess financial implications.
Document Everything
Track promises made by the vendor regarding support, pricing, and product enhancements. Keep a record of support case responses, product releases, and any personnel shifts or departures. Documentation will provide you with evidence and help you build a case for change if needed.
Have a Plan B
Even if you're still at the tendering stage or considering a vendor, it's crucial to have a backup plan. Understand the impact of the merger on pricing, product roadmap, and service-level agreements. Ensure that you have a clear understanding of how the merger will affect financials, upgrades, data location, cybersecurity, integrations, transparency, and existing relationships with other vendors.
Remember, mergers and acquisitions can bring both positive and negative changes. While they may lead to product enhancements and improved support, they can also introduce uncertainties and risks. By asking the right questions, doing your due diligence, and being prepared, you can navigate the acquisition process more effectively and make informed decisions that will benefit your organization in the long run.
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We have an entire suite of government software solutions that help with budgeting, accounting, utility billing, AP automation, payroll & HR, transparency, and more. We are more than happy to answer any questions you have. Or, do your own research by looking at case studies and webinars.
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