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Mergers & Acquisitions with SAP

Mergers and acquisitions are big business. In 2019, 49,849 M&A deals were made worldwide, with a combined value of $3.7 trillion

Mergers and acquisitions aren’t all alike. They can vary considerably in regard to the scope of assets that, according to the terms of the deal, must be shared or transferred from one entity to another. This has serious implications when it comes to SAP management. Because SAP systems are so widespread—they assist in generating 77% of global transaction revenue—most companies that participate in an M&A transaction are forced to contend with a pressing question: What is to be done with all the SAP data that was previously the exclusive property of one organization?

Challenges of SAP Mergers & Acquisitions

It’s important to understand the various issues involved in SAP mergers and acquisitions. Typically, there are multiple risks and challenges that need to be addressed, such as the following:

  • Complexity – Whether the project calls for merging two SAP systems or performing a carve-out, the process of transferring data, systems, and processes from one entity to another can be extremely complex and time-consuming. For example, data must be carved out in a predefined sequence to avoid disruptions to interlinked tables. Another issue is the terms and conditions linked to the use of SAP systems, which can complicate attempts to merge separate business entities.
  • Proprietary property – In many cases, not all data from an organization should be transferred to another entity engaged in the M&A process. There may be certain business units that are not legally part of the deal, and their proprietary data should not be copied or relocated. Consequently, care must be taken to identify and disentangle this type of data from that which is to be transmitted to the new entity.
  • Security – Data security is an issue that often arises when third-party organizations participate in mergers and acquisitions. Business entities need reassurance that their internal processes will not be subject to unwarranted scrutiny and that their data will be adequately protected during the carve-out
  • Accurate data apportionment – The purchasing company should receive all data sets—no more and no less—that are authorized for transfer by the law and the terms of the contract.

These are only a few of the obstacles that commonly arise during the mergers and acquisitions process. Failure to manage them properly could expose one or more of the affected organizations to liability and/or serious harm to their business operations.

“Most companies that participate in an M&A transaction are forced to contend with a pressing question: What is to be done with all the SAP data that was previously the exclusive property of one organization?”

What Constitutes a Successful SAP Merger or Acquisition?

Considering all the snags that can potentially develop during a merger or carve-out, what needs to happen during the process to ensure success? What steps must be correctly completed? Important goals of the SAP M&A process include:

  • Compliance with deadlines – Failure to go-live within the scheduled timeframe can result in severe financial consequences for the organizations involved.
  • No adverse impact on RemainCo The entity from which data is being transferred must be able to operate normally during the carve-out
  • Complete reintegration – Because SAP is integrated into a business’ operational processes, conducting a successful data migration requires undoing that integration and then carefully reintegrating SAP into the acquiring company.

In order to minimize the risk posed by these kinds of delays and errors, it is extremely important to choose the right partner to oversee the M&A process.

Selecting a Partner

What do you need in an SAP M&A partner? You want to find a partner with a proven track record in managing mergers and acquisitions without causing negative impact to the operations of any participating entity.

Protera has a 100% success rate in managing the transfer and consolidation of SAP systems in mergers and acquisitions. Our SAP carve-out approach ensures the smooth transfer of assets with zero risk, providing clients with:

  • Transparency – Organizations are provided with a statement of work (SoW) that outlines the various stages of the project, relevant timelines, and other pertinent information. All concerned entities are given the opportunity to sign off on the project.
  • Detailed methodology – Protera performs a thorough analysis of the project’s scope prior to commencement, which gives us an opportunity to devise a detailed execution plan.
  • End-to-end project management – Protera manages all stages and integration points, so involvement from multiple firms is unnecessary. This bolsters data security and eliminates redundant activity.

Since 1998, Protera has provided SAP-centric organizations with a wide range of ITO services, including SAP hosting, managed cloud, and application services. Use the form below to reach out with any questions; we would be happy to assist you.

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By |2020-08-12T01:01:43-05:00July 12th, 2020|Categories: SAP Support|

About the Author:

Avatar for Les Redei
Les Redei is the VP of SAP Professional Services for Protera Technologies, with over thirty years of technology expertise, comprised of twenty-two years in SAP covering the areas of R/3, ECC, NetWeaver, HANA, S/4, SRM, PI/PO, BI, EP, MDM, PLM & SCM. Les has IT project leadership and project management experience and thorough technical and analytical problem-solving skills.