Centralization / offshoring during post-merger integration

This topic contains 2 replies, has 3 voices, and was last updated by  Eneko Ferrero Martín 1 year, 8 months ago.

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    Siva Prasath B

    Have you come across M&As in the service sector, where the two merging organization have different strategies for centralization and offshoring? An example could be that the acquirer doesn’t offshore at all, or offshores to third party BPO providers, whereas the target has its own captive shared service centres. In such cases, what has been the strategy of the combined organization post the acquisition / merger, and why has it been so?



    I can’t speak to offshore, but I can speak to centralization. In 2016, my organization went from a decentralized model to a centralized model. It was a 3-year initiative to integrate people, processes, and tools. When we acquired a long-term care organization in 2019, they functioned as a decentralized model and many of their individual facilities were even running basically as independent entities. They had financial issues in the past, and we had shown much success with our centralized model that it was more of a tell vs. discussion of what the HR / Corporate Services strategy was going to be. Through this effort, we needed to fill 180 FTE into our centralized model and those roles were eliminated from the individual facilities.


    I have lot of experience doing IT M&A from/to organizations that are completly have centralized and decentralized model. I think that that one factor to measure the dificutly of the project is the type of industry of the companies. I worked in several projects in industry (automotive and lifts) and are completly different. Automotive are more complex because the facilities need to follow with the production and providing goods to the customers, so any change in the systems has lot of impact. In the lifts industry is easyest because the production is not so ‘complex’ so the change can be done better.

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