M&A Integration Efficiency & Effectiveness

The Interim state and end state business model must ensure that the opportunities to improve both efficiencies and effectiveness are delivered. This means not just identified synergies, but, overlap, duplication, waste, inconsistencies due to the changing strategic direction, standardisation, bottlenecks. The independent integration teams must be able to cut through the politics and constantly review promised delivery to ensure improvements are captured throughout the integration.

M&A Integration Efficiencies

There is always a lot of politics involved in mergers, who gets what job, budget, where does the power sit. Having an independent expert to help cut through the crap can be invaluable.

Looking for efficiencies have a number of facets. Each organisation currently has inefficiencies built in through decisions that might have seemed or been good ones at the time, but times have changed, customers, people, technology, competition and the market place have changed and in some areas our organisation has not had the impetus or money to do so. The same will be said for the company we acquire. There is an opportunity to become more efficient.

There will also be strategic changes due to the merger, which will affect functions, departments or divisions on either side, these too will enable efficiencies in the future that we can plan now and start delivering.

There will also be duplication or overlap across the merging organisations, these can provide the largest efficiencies.

All efficiencies need to be logged for cost vs benefit and easy of delivery, together with plans made to deliver them, governance put in place to ensure good decision making on which to move forward on and when. The Synergies to be captured and ensure the financials of the deal are a success.

M&A Integration Efficiencies Plans

 

Overlap or duplication

From due diligence we have a rough idea of the overlap or duplications. There is a whole piece of work to be done as we get closer to close and then into the ownership of our nice new company, of really getting into the detail and fully understanding where there is overlap, duplication or redundancy (waste).

What can be cut or shaved? where do we need to flip it over or change it? Who gets to decide is key? All people involved, except external integration experts, will have skin in the game and may wish to influence decisions to fit their personal agenda.

Getting this right, fast decisions on detailed changes and rapid implementation is difficult and often the downfall of many deals, getting stuck in internal politics.

Standardisation

Reviewing what can be standardised and what needs to be bespoke, together with the cost of change both financially and in people, as well as the savings to be made, and if they are realistic.

Realistic timescales for these changes and the dependencies they have within the integration and other parts of the business.

Waste

There is now a new paradigm, new integration strategy and may be changes to the business strategy. Many activities currently done in either organisations may not ben needed in the future. These come from not only the strategic change but also the general idea that most organisations have some waste already, the merger is a good time to route these out and change, or cut the waste.

 

Change of activities

Given the strategic changes going on, there will be a number of activities that are no longer needed. Most people in the organisation do not yet know the interim state or future state, so its for the integration to review the activities in the organisation that are no longer needed or should be changed. These are planned to time with the deliver of strategic change and will deliver the savings or efficiencies needed.

Bottlenecks

There will be bottlenecks in the current organisations, some of which will stay. There will be some that we create in the new organisations. There will be integration bottlenecks which slow the pace of change. Understanding these three and the dangers they pose, together with the cost of removing them and the advantages we gain from each of their removal.

Decisions made and work done to remove bottlenecks where this is cost effective.