Merger and acquisition (M&A) process are gradually becoming an imperative choice for organizational growth to increasing market share and shareholders value. The phenomenon of rising M&A deal is observed across various continents, although, it has commenced much earlier in developed countries and is relatively recent in developing countries. Companies in all the industries have grown quite speedily, mainly because of an aggressive merger and acquisition strategy. Digitalization and technological advancements have increased the pace and the size of the M&A deals significantly. Technology companies, in search of new ideas, new products, strategic relationships and additional market share, have been the most rapacious.
A merger or acquisition poses a serious short-term challenge for CFO’s in integrating data that is spread across multiple systems and locations. Manual driven processes combined with dependency on excel to produce financial reports is time-consuming and inefficient. This inefficiency delays digital transformation efforts.
Most of the time M&A data are merged into the Group Consolidation system. “For Management Reports, CFO needs to align Profit Center, Cost Center etc.” Statutory Accounting reports can be produced using any consolidation system. What about the Management Reports? For example, parent entity dealing with “product” buying and a child entity dealing with “Services”. CFO’s are left to align the profit center and any other dimension required for preparing management reports.
Aligning the data for group forecasting and budgeting at various product or service levels is never going to be easy. CFO’s are challenged by dealing with a time consuming manual process. And in most of the cases, even after 4 or 5 years after the M&A event, some organisations are still running with the legacy systems.
Insiet has made it simpler to collect data from various source systems and generate files for posting to the target system be it in SAP| Oracle HFM | Microsoft etc. They provide solutions to import the data, carry out the mapping and generate journal entries that can be posted either in Parent ERP or consolidation system.
Another big challenge for the CFO’s is the need to align the Profit Center and Cost Center for management Reporting. For example, if the parent entity is dealing with “Product” buying and a child entity is dealing with “Services”, CFO’s are left to align the profit center and any other dimension required for preparing management reports. Insiet Reporting Suite produces those Management Reports. If organisations are running multiple systems across their business, Insiet helps in streamlining the data and making necessary M&A adjustments. Adjustments such as minority adjustment, Intercompany and currency adjustments are all performed in order to produce group financial reports without the need of a developer.
To learn more about how Insiet can help your business, request for a case studies from the team.