Post-Acquisition Integration and Delivery
We lead our clients to post-acquisition success with seamless integration and performance recovery to avoid losing time, revenue, personnel, and momentum
What are the actual goals of M&A, and why is it so hard to get it right? First, find a compatible candidate company, complete the due diligence, close the financial transaction, and get past the turbulent transition period as quickly as possible. Then, reduce turnover resulting from uncertainty after the financial close, and quickly transition to get as close as possible to that operating state represented in the economic model. That is, to get across the performance gap that typically accompanies acquisitions without losing too much time, revenue, personnel, or momentum.
When you sign the documents at the financial close, you have essentially stepped up to the starting line, not the finish line. Most acquisition failures result from not following through on the details. Post-acquisition integration is not complex, but it can be very hard. It is like breaking rocks – a simple concept, but not easy; just arduous work! Nevertheless, the milling and grinding deliver the goods; blocking and tackling allows the fancy pass-play to work.
Acquisitions do not meet their financial projections typically because they look only to one side – cost efficiency (a tactical approach), rather than business expansion (a strategic approach)
– and fail because they ignore the effects of culture.
Why Acquisitions Anyway?
After all, acquisitions are pretty hard to do, not to mention hard to do right! There are only a few fundamental reasons to make an acquisition:
- to get more customers for your services
- to get more benefits for your customers
- to add capacity and capability
- to expand into new territory
- to increase cost efficiencies, or
- to improve financial strength.
Other more subtly complex reasons include
- defense, to keep someone else from getting the target
- coercion, to force a target to sell (the infamous “hostile takeover”), and
- distress, to rescue a target in financial trouble.
How We Help Clients
Financial Reporting Integration Issues
In many cases, newly merged companies have different ERP, CRM, Workforce Management, and other systems. There are several options here. First, merger, acquisition, and divestiture strategies are developed. A complete integration approach can work well if an acquisition is integrated into the new parent’s company. If the acquisition is to be held for a short term, say less than five years, it does not make sense to do an ERP integration, so a plan for financial integration follows. If the acquired organization is likely to be divested in the next five years, then a similar financial integration model will work.
Human Capital Integration Issues
We have all seen corporate cultures wholly destroyed with a significant complex merger. For example, consider the Hewlett-Packard and Compaq merger. Carly Fiorina ended up as CEO and Chair of the board at HP, leading the acquisition of Compaq. Insiders say that she often favored Compaq persons over HP persons for positions of responsibility, thereby effectively destroying one of the most revered and influential corporate cultures in history.
Organizational Cultural Differences
We lead workshops to map the organizational and cultural differences between the acquirer and the acquired. Business processes for each organization are laid out and compared in an orderly fashion, and the final business processes across the new organization are approved and communicated.
Leadership / Management Retention
The first step to post-merger success is to have the proper operations team in place. You may already have the team selected. On the other hand, it may be a merger of the two existing teams, or you may need to acquire additional talent to get through the post-acquisition integration phase.
IT / Systems Compatibility Integrations Issues
Determining which IT vendors will survive the merger is difficult at best. Common vendor relationships reduce the cost of acquisition. However, the use of existing vendors may not reduce the total cost of ownership
What We Do
Enterprise BCM Performance
Ensuring success – If it costs only 30% more than you expected, generates only 20% less than you predicted, and takes only 50% longer than you planned, consider that a success! This experience may hold especially true in the early stages of learning how to do this.
Assume it will always:
- Be more complicated than you think
- Cost more than you think
- Generate less revenue than you think
- Take longer than you think
Financial vs. Strategic Integration
Focusing on the core objective can prioritize cost savings over opportunity development. While there is inherently a limit to cost reductions, there is essentially no limit to new revenue opportunities.
Acquisitions essentially focus on financial capital – due diligence, inventorying and valuing assets, modeling future earnings – and are often mainly about hard assets and revenues.
Integrations are more focused on intellectual capital and leading and deploying that unique resource to optimize returns. Soft assets, including people and what they can do, who they know, and their relationships with customers, suppliers, and each other, will ease the burden.
Improving the capability to assess and compare competitive performance across multiple success criteria and provide reliable guidance to future business capability model (BCM) performance.
Driving Business Strategy to Align with Business Capabilities
The success of an actual merger of equals is also very rare. In most cases, it is an acquisition – somebody writes a check, and somebody gets bought! The merger part follows when you integrate the organization into the acquirer’s operations.
Guiding leaders to make their mark by taking risks and aiding them in getting the right people in the right place at the right time. However, creating a team means more than gathering people together and naming someone captain. It means aggregating skills and intellectual capital and deploying people and capital appropriately for a defined purpose.
Global Data Integration
Implementing a single source of the truth with top to bottom views of enterprise performance is critical. Integrating hundreds of disparate data sources to achieve near real-time responses to the latest what-if questions is a significant competitive advantage. In addition, role-based views of the same data sources allow the entire enterprise to make consistent decisions.
BCM Scorecard / Dashboard
Delivering a Post Acquisition Integration and Delivery dashboard enables each operation to review hundreds of metrics and other management information needed for business capability modeling. This dashboard reflects the operational performance in the new organization and delivers a new business scenario model.
ERP / CRM Integration
Helping deliver a newly acquired company in months, not years, by integrating ERP and CRM systems. Success has shown that as many as eight companies can be integrated in seven months using a proven rapid merger, acquisition, and divestiture model.
Executive Briefing - Get Stuff Done
Delivering executives what they need, when they need it, and allowing them to ask “What-if” questions without building new models is ideal. Reducing the time for a weekly executive briefing from hours to 15 minutes is easily achievable with the right expertise.
Helping Leaders Make Their Mark
Promoting the customer resulting in a pay raise or bonus creates tremendous mutual loyalty. Over the past 30 years, more than 82% of our customers have achieved this due to the successful projects delivered.
Digital Transformation Strategy
Delivering a prioritized post-acquisition integration roadmap showing the workstreams by function and the status of all projects required. In addition, this “Get Stuff Done” roadmap dashboard keeps PE Partners informed of the position of the overall project and the budget status.
Quality Focused, Result Driven
We begin with a set of post-acquisition solution scenarios perfected over more than 300 successful projects
Digital Transformation Business Capability Model (BCM)
We begin with a set of capability and maturity assessment models to provision a world-class Digital Transformation Business Capabilities Modeling Program. We then prioritize and organize a roadmap for the post-merger integration activities. The concept is simple but powerful. We begin with a set of blocks on a page that lays out the identified BCM projects, like those shown in the example following. Next, we work with our client to mark up the titles or project names to reflect what we need to deliver accurately. Finally, we make sure to include completed projects and programs.
As an example of such a working roadmap, review the diagram following. Green represents projects completed, dark blue denotes projects underway, light blue, orange, and purple refer to new projects with high, medium, and low priority. An actual briefing document follows as an example.
Data-Driven Discovery and Outcomes
We guide our clients through the channel program development process. First, we look at the desired outcome, making sure that we ask the right questions to allow deep dive “What-if” analysis. Then, we ensure that we have the data needed to answer those questions.
The simple object model diagrammed below calls out many objects that we populate with data supporting post-acquisition integration. Likewise, the model diagrammed following calls out many objects that we populate with data supporting post-acquisition integration.
Data Acquisition for the Digital Transformation Experience
Building access to clean, accurate, and timely data is a primary concern of digital transformation success. The quality of the what-if sensitivity analysis is entirely dependent on the accuracy and timeliness of the data. After the data is secured, what-if tools can be developed.
Our approach uses “Common Business Objects” to guarantee that only clean data reaches the data consumption engine. This approach isolates master data management outside the walls of the data repository.
Post Acquisition Integration and Delivery - Digital Integration
Delivering a complete acquisition integration requires the assembly of data, controls, and those algorithms that provide the magic behind the screen. With all that in place, informed analysis determines details from the scaling of inputs to the desired data range for what-if controls, and of course, the complex business scenario that connects all these elements.
Post Acquisition Integration - Digital Insights
Data integration makes possible delivery of a set of comprehensive consolidated digital views of the merged enterprise. These views deliver immediately actionable insights such as revenue and profit by product comparisons between divisions or regions.
The example dashboard shown below demonstrates a newly-formed four-region enterprise where each region uses a different CRM or ERP system. With digital insights, you can translate strategy into purposeful action.
Sustained, Unfair Competitive Advantage
Sectors We Serve
Delivery the Enterprise What-If Capability
Global IT Strategy - Customer and Revenue Focused
Providing the Key Program Manager
Bringing an Oil Storage Facility Back to Life
Delivering Infrastructure Requirements for a New Organization
What if You Have to Integrate Multiple ERP and CRM Systems?
Four Steps to BI Dashboard Success
Lead Source Yield
Solutions For All Aspects of Your Business
Understand how our team can help your organization with Post Acquisition Integration and Delivery.
J. Paul Oxer