The recent announcement that Oildex has acquired the on-again, off-again accounts payable automation product from ADP (Automatic Data Processing, Inc.) serves as another reminder of just how many mergers and acquisitions have occurred in the financial process automation industry over the past few years. Since 2010, Lexmark has gobbled up Kofax, Brainware, Perceptive Software and ReadSoft, while Gimmal acquired Prodagio Software in April 2015. It’s been a trend for behemoth companies like Lexmark, EMC, Open Text, and IBM to snatch up the niche players of the industry. In fact, some enterprise content management (ECM) companies have gone through multiple ownership changes over the past few years. As a client of such a company, how can you be assured that your solution will survive, much less continue to evolve, when there is seemingly a new owner every six months?
Clients of ECM companies that have been purchased by larger providers have to worry about whether their AP automation solution will cease to exist, or whether the price of the solution will suddenly skyrocket while other essential benefits, like customer support services, either go away altogether or deteriorate in quality. The uncertainty alone is something we hear our clients say they don’t have time for. It’s even possible that the AP automation solution you purchased will be discontinued and you will be required to purchase and implement a new solution offered by the acquiring company.
If you’re a customer of an acquired organization, you need to get assurances that your new provider is committed to providing you with superior service and that your solution will continue to evolve and offer feature enhancements in the future. There’s a chance that such an acquisition turns out to be positive – your solution could actually improve significantly – but more times than not the result is negative, and you need to seek out answers to the queries posed above to get a sense of exactly what the future holds. You should also do some research and find out as much as you can about your new provider’s history, customer base, and vertical expertise.
Earlier this year, we published a blog that outlined in greater depth the potential negative repercussions for clients of acquired/merged companies. If you have any further questions, contact us at info@DataServ.com and we will be happy to help.