|
.
BUSINESS
PROBLEM STATEMENT:
.
Out of 500 recently merged
companies, about 50% failed to meet specified objectives, 50% reported
an overall drop in productivity in the first 4-8 months and 61%
failed to return their cost of capital. Out of 125 companies in the
post-close period, 66% were found to be financially unsuccessful.
“One-third of all acquired firms are sold off within
5 years and 90% never live up to their expectations” (M. Leofke, Why
So Many Mergers)
.
We
believe one key reason so many acquisitions are failing to deliver
value is that the initial strategic objectives of the deal, whether
they are revenue or cost synergies,
are lost in the integration phase. During the integration phase, the
focus shifts towards functional (silo) optimization.
We
believe that a successful integration has to be founded in the
translation of the strategic objectives of the deal into the
integration approach, structure, and plan; hence, often resulting in
a complex cross functional and cross company exercise.
.
A
great example of this scenario is the necessity of the acquired
company’s sales force to understand their future bonus
structure. Since
the sales bonus structure
is a
key retention driver, Sales has to work with Finance, HR and IT to
develop a new bonus structure and the transition to that new structure
in record
time. A delay in
developing the sales bonus structure may certainly lead to the
attrition of key sales reps, loss of customer relationships, and revenues.
..
SOLUTION
DESCRIPTION - OUR APPROACH
..
MODULE 1
- SETTING UP THE INTEGRATION BASIS
.
The goal of this module is to
translate the overall vision of the combined company and high level
synergies, into key strategic functional integration activities and performance measures. At
the same time we will set up the integration structure, define the
customer experience during the integration, and identify key roles and responsibilities.
..
KEY
ACTIVITIES INCLUDE:
..
- •Defining / reviewing strategic
objectives, priorities of the integration, and performance measures
- Identifying / reviewing synergies
and timeframe for realization
- Developing the integration roadmap
with key milestones
- Developing the integration
structure and identifying integration team
leaders
- Defining decision making,
escalation, and communication processes
.
MODULE 2
- SETTING UP AND MANAGING INTEGRATION TEAMS
.
The goal of this module is to
set up the integration teams and the Project Management Office (PMO),
as well as to define integration tools and processes.
The
PMO will report status to the steering committee and support the
functional teams with subject matter expertise and best practices.
..
KEY
ACTIVITIES INCLUDE:
..
Mobilizing integration teams:
- Developing team charters, stating
team goals, members, roles, scope and
deliverables
- Defining functional integration
project plans with key milestones
- Identifying key integration risks
and defining risk mitigation
- Identifying and planning both
“Day 1” and 60 day
operational necessities and risk mitigation
.
•Setting up and managing
the program management office:
•.
- Reporting integration status to the
steering committee
- Developing and managing an overall
communication plan
- Identifying integration roadblocks
and escalating integration issues
..
•Supporting functional
integration
teams:
..
- •Providing integration best
practices
- Facilitating cross functional
process integration, such as order
management, or integration of sale force and service
- Highlighting common integration
pitfalls and how to avoid them
- Facilitating the development of
interim processes through rapid process
mapping
|
