ERP systems and A&M—towards IT ‘nirvana’

Deloitte white paper investigates ERP options during oil and gas mergers and acquisitions.

A white paper* from consultants Deloitte looks at the aftermath of oil and gas acquisitions and mergers from the viewpoint of the CIO. Deloitte’s thesis is that to create a ‘high-functioning’ organization from two or more disparate businesses, first you have to adopt a single enterprise resource planning (ERP) solution. This can be achieved by either starting from scratch and transforming business processes during an ERP consolidation, or by adopting one of the pre-A&M company’s business processes and platform. Deloitte advocates the latter ‘integrate, then transform’ as allowing post merger companies to begin working off the same page much more quickly than would be the case with the ‘transform then integrate’ approach.

The study describes a state of IT ‘nirvana’ enabling executives from the separate organizations to ‘work rapidly and harmoniously to […] choose the best possible business processes.’ Companies ‘work tirelessly to transform their businesses into a single, high-functioning organization partially enabled by a single, effective ERP solution.’ Such ‘nirvana’ may or may not be achievable given real world constraints of sub-optimal processes and budget limitations. Time constraints and the complexity the oil and gas business may make the goal of an effective solution elusive. Technologies evolve and ‘ideal’ solutions mutate into ‘fix-it-quick’ remedies such as offline spreadsheet analysis of financial reporting and customer sales forecasts.

Rapid integration of IT systems is crucial to the creation of a single corporate culture out of two merging companies. If management chooses to delay this process by implementing an ‘optimal’ system, companies run the risk of going through the culture clash and expense of merging all over again when the new system rolls-out! Deloitte claims to offer a ‘comprehensive methodology’ designed to help companies put merger integration initiatives on the fast track. Standard activities, milestones and tools have been developed to help companies at such critical times.

Comment—The white paper is more sales pitch than analysis, but as we heard recently, over 50% of Exxon’s IT spend is SAP related. ERP really is the elephant in the room—in both A&M and in operations too. More from


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