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Why Manufacturers Should Care About Private Equity

Global Shop Solutions, ERP software

As stated by Matt Jarzemsky, writer for Yahoo!, private equity has a new favorite industry: tech. The world is starting to see a widespread expectation and acceptance of technology and specifically, software in every aspect of our lives that private equity firms feel there is no better place to put their money. You can now find software driving the automotive sector, literally, thank you Tesla, in the kitchen, thank you Samsung, in our HVAC, thank you nest, and the list goes on and on.

If you are a manufacturer, you should care about this a lot. You might ask yourself, what the heck does this have to do with manufacturing? The answer is simple: everything. According to the ERP graveyard the vast majority of ERP software systems have been bought and sold at least once, if not several times which means for the majority of manufacturers you are using a software system that is not built from the ground up and fully integrated, but pieced and stitched together. Bigger than the product, you have to ask yourself, will the company I am using to support the most critical functions of my business be there tomorrow? Are the dollars I am paying for the software being used for research and development or to pay private equity dividends? Would you buy parts from someone knowing their machines are 10 years old and the majority of their profits go to bankers? The answer is no, you’d rather partner with someone who is reinvesting in their business so you can trust their stability for years to come. These business-focused questions are often overlooked but can have a larger impact on your business than the software itself.

When comparing manufacturing ERP software, there are several factors that can be easily overlooked. We have prepared this information to identify some of those less visible, but foundational, considerations. Every manufacturer should review the checklist here when selecting the best ERP software for their company.

Push the Sled blog is written by Dusty Alexander, CEO of Global Shop Solutions, because no matter how good you get (at physical fitness, running a manufacturing business or being an ERP user) you can always work harder, get better, and be humble.

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