Companies Acquiring ERP Consulting Firms – the Benefits

There has been a steady series of acquisitions of ERP consulting companies over the past year by reputed Information Technology (IT) and consultancy firms. Four recent instances of such acquisitions are NTT Data’s purchase of Intelligroup, KPIT’s buyout of CPG solutions, BAASS Business Solutions buying ProfitPoint and KPMG’s ownership of IT-Net Group. The acquisitions and mergers indicate that ERP consulting companies are considered to have a significant prospect of growth.

Organisations which had been relying on disparate legacy systems for managing their business processes, data and related functions have seen the importance of implementing Enterprise Resource Planning (ERP) software systems. ERP systems can integrate different types of data into a single database, which can be accessed and managed by different functional processes or transactions. All functional areas such as finance and accounting, supply chain management, sales and marketing and human resources can utilise a single ERP system. A global business with distributed partners, customers and employees can definitely benefit from an ERP implementation.

ERP consulting firms provide expertise in selecting, configuring, implementing and managing ERP systems in a way best suited to the needs of the organisation. The valued expertise of ERP consultancy firms and high demand for their services make them attractive candidates for acquisitions and mergers. Let’s take a look at the recent acquisitions of ERP consulting companies and why they are beneficial.

KPIT Cummins Buys CPG Solutions

In the end of September 2010, KPIT Cummins Infosystems Inc, an IT consulting firm based in Pune, India and with global reach announced that it had acquired CPG Solutions. CPG Solutions is a consulting company based in the United States (US) specialising in Oracle-based solutions including ERP implementations. Its services are geared towards the areas of supply chain, manufacturing and engineering. An ERP consulting company with more than twelve years of service in North America, CPG Solutions was bought for US$13.2 million.

KPIT Cummins aims to enhance its Oracle-based ERP consulting services with the expertise of CPG solutions in the engineering and manufacturing sector. In a partnership that spans continents, KPIT together with CPG would be able to leverage their global presence to provide worldwide ERP implementations, with offshore facilities.

KPIT Cummins was part of a merger deal with Sparta Consulting, an SAP ERP consultancy in California, US in October end 2009. The merger was to enable the emergence of a company with a larger global presence, which can be used to provide best ERP consulting solutions based on SAP. Sparta Consulting had experience in sectors such as Energy and Utilities.

KPMG Acquires IT-Net – ERP Consulting Services for Government

In late September 2010, another global consultancy firm, KPMG LLP, bought IT-Net Group Inc, which is a Canada based ERP consulting provider. IT-Net is a public sector consultancy which provides management, security and ERP consultancy. Its government customers include City of Ottawa, Citizenship and Immigration Canada and Department of National Defence, Canada.

With the acquisition of IT-Net, KPMG seeks to expand its services in providing network data security as well as ERP consulting services. The expertise of IT-Net in government ERP projects would further benefit KPMG, itself a consultancy of considerable repute.

NTT Data Buys Intelligroup, ERP Consulting Services Provider

In June 2010, Japan’s NTT Data Corporation acquired Hyderabad-based ERP consulting company, Intelligroup for US$199 million. Intelligroup, with more than two thousand employees has offices in India and the US. It is a major player among ERP consulting companies, with ERP solutions constituting 70% of its total revenues.

Having Intelligroup in its bag would enable NTT to enter the Indian ERP consultancy market. It would also be able to benefit from Intelligroup’s expertise in Oracle and SAP ERP implementations. Intelligroup’s customers in turn can use to their advantage the cloud computing capabilities provided by NTT as well as greater global presence.

BAASS Business Solutions Acquires ProfitPoint

BAASS Business Solutions is a technology and ERP consulting firm specialising in Microsoft Dynamics NAV ERP solutions and Sage ERP. A provider of ERP solutions in Southern Ontario and North America, it acquired ProfitPoint Inc, which also provides Microsoft ERP implementations.

With this buyout, BAASS seeks to expand its Microsoft ERP consulting business, and use ProfitPoint’s speciality in ERP implementation in sectors such as manufacturing, distribution and fashion.

Acquiring Best ERP Consulting Firms – What are the Benefits?

Why do companies seek to acquire or merge with speciality best ERP consulting companies? Let’s look at some reasons organisations have for buying ERP consultancy firms:

High Demand for ERP solutions - A main reason is the desire to get a foothold in the ERP solutions sector, which is predicted to grow fast in the coming years. It is said that the SAP-based ERP consulting itself will be worth more than US$100 million within the coming three years. Microsoft ERP solutions are said to have more than one million users. In this scenario, it makes great business sense for companies to expand their services to include ERP consultancy. By investing in best ERP consulting firms, companies can use achieve business goals of growth.
Increase Global Presence – Some companies may buy ERP consultancy firms in order to enhance their global customer reach. A company in India, buying a US-based firm, can not only access US customers but also provide offshore services to global customers.
Enhance expertise – Firms, which acquire experienced ERP consulting companies, can take advantage of the expertise offered by the acquired company. The expertise can be due to experience, number of senior consultants and type of software used or may even be sector-specific. For example, an ERP consultancy which specialises in the Energy sector can be acquired by consultancy firms keen to expand into that sector.

The acquisition of an ERP consulting firm can provide existing IT companies and consultancies with a competitive advantage in a global market. It can lead to business growth and greater value for its customers.

What are the steps to be taken to account the performance ERP software programs in your organization?
Getting to know BPR
Choosing ERP Software
Customizing ERP Software
How to set ERP Standards?
Factors influencing ERP price
What is the Necessity for ERP Gap Analysis and how is it done?
ERP Implementation Guideline
ERP Implementation Life Cycle
Challenges faced by ERP
Flaws in ERP training
How to overcome ERP troubles?
Significance of ERP Implementation
How to make ERP User friendly?
What are the lessons learnt from ERP Performance Studies?
What are the different methods in implementing ERP?
Constituents of ERP Training
Errors in ERP implementation
Process Management