This whitepaper is part of a series focused on how IT can increase deal value and minimize business risks during a transaction. The series will highlight principles that the Technology M&A team in KPMG Canada leverages to help maximize value and minimize risks for clients across industries.

Prioritizing Enterprise Resource Planning (ERP) systems for pre-deal assessment and post-deal value creation planning can help private equity firms and pension funds realize the full potential of ERP systems for long-term scalability and value maximization.

In the rapidly shifting deal landscape, maintaining a competitive edge across portfolio companies is paramount for private equity firms and pension funds. Organizations across various sectors are beginning to appreciate the extensive advantages of ERP systems, deploying these robust tools to help enhance value, guide decisions, and gain a strategic advantage in the industry.

Furthermore, ERP systems are proving to be crucial in mergers and acquisitions (M&As), across both pre-deal and post-deal phases. They facilitate data consolidation, seamlessly integrating information across operations and back-office functions into a unified platform, while also automating workflows and standardizing key business processes, which collectively often lead to improved operational and cost efficiencies.

Recent research has proven ERP implementation to be a game-changer, empowering businesses with material process improvements. A staggering 95% of organizations have witnessed tangible enhancements in their operations through adoption of the right ERP system. The research has highlighted three leading benefits, which deliver substantial ROI:

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40% reduced IT costs

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38% reduced inventory levels

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35% reduced cycle time

However, 83% of M&A deals failed to boost shareholder returns, primarily due to various post-merger integration challenges, many of which could be addressed with a right-fit ERP system, as shown in KPMG in Canada’s 2023 CEO Survey. Read the full report below to learn more.