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Is there a particular functional area that seems to have more challenges than others in regards to integration? In my experience, the underlying change management layer is under serviced in most deals.
In my experience, the Accounting and Financial areas have the most challenges due to limitations around month-end, quarter-end and year-end processing activities. Additionally, SME’s are often limited in this area which has the potential to significantly impact BAU if not properly managed.
Relating to a simple acquisition of subsidiary:
Though not necessarily the most challenges, financial reporting integration will be the most glaring initially as it would be tested immediately on monthly basis. There may be new reporting requirements and details in which the the acquired entity was not required to prepare under previous ownership.Our operations SMEs are often squeezed between supporting the integration and continued support of ongoing business. Long-term planning is critical to understand when you will need those resources for integration activities – analysis, testing, etc. It’s incredibly important if you have any area that deals with seasonal spikes in their volume of routine business.
I don’t know what the norm is – but for the companies I’m working with the primary issue is accounting. The accounting needs and systems of the acquiring company (some of which are informed by compliance) don’t best serve the management and performance needs of the majority of their subsidiaries.
At my software company, it’s the systems. They have taken upwards of 3 years. Moving from one instance of Salesforce to another with a different configuration can be surprisingly complex.
In software companies operations / systems / IT is hugely disrupted by M&A.
I agree with @adrienne that even moving from one instance of SalesForce to another can be very complicated and cause serious pain for affected employees.
I believe in merging / simplifying systems as quickly as practical (not possible). If a critical team needs to retain its own isnstance for 2/3Q’s, let that happen and make the progression to a unified system over a set period of time.
The answer to this isn’t staying separate, its definately merging over time. But a careful evaluation should be taken as to ‘when’ to get this right.
IT integrations are detailed and imperative to business continuity. I’ve experienced that legal / compliance is a particularly hard integration. Specifically, contract entanglements and managing contracts for both companies.
I agree that the change management layer is often under serviced. It is critical to keep your employees informed on what is happening and why, otherwise you risk valuable people resources leaving to go work for competitors.
I think some functions are less seen or cared for than others such as HR and Culture.
But one of the things I have seen is often mishandled is organisation, which leads to missing parts and delay. It is also miscommunication across the functions from company A and company B.I have always found culture and people to be the biggest challenges. If that is aligned and people are sincere in making an integration successful, then any of the functional challenged like IT or Finance/Accounting can be resolved. More often than not it is differing attitudes, close-mindedness, poor communication and lack of motivation from the integration teams that lead to failure.
IT Integration is a large component in a Merger, especially when your looking to have both companies work in one environment, such as utilizing the same outlook, single sign on, ERP, etc. Another component is people. Employee retention and employee experience is important to consider when dealing in M&A.
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