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Has anyone a firm view on creating an internal PMO lead or hiring externally. Often an external PMO resource won’t know the business and things take longer but there is a better structure and process around the change. On the other hand, a good internal resource seconded to the PMO lead knows the business well and can clear roadblocks easily. MAybe a combination of both is good but the cost is also a hindrance to external.
On a recent transaction, we have capitalize on both, and it was important that the Consultant was involved during earlier stage of the transaction, hence familiarity with the nature of the deal was very crucial.
I think a lot depends on the frequency of M&A for the company. If one of the main strategies for growth is through acquisitions, it makes sense to build an internal IMO bench and supplement that with external consultants if there is a knowledge gap on a particular deal, or if the deal is large and warrants more resources. Having an internal IMO team with knowledge of the nuances of the businesses, operations, processes, and teams is very valuable. All it takes is one unwitting external consultant to make bad assumptions about operations or about a process and things could go off the rails.
I am in favor of internal PMO, although finding the right resource might not be easy and also freeing up that resource from day-to-day tasks. I think being an M&A PMO is a great opportunity to motivate and develop internal talent. Furthermore, this person can easily remove roadblocks. Consultants should be hired to support when needed but, in my opinion, the internal PMO should take the drivers’ seat.
I would say it depends on the acquisition strategy, because if we are talking about acquiring a small company with no huge complexity, having an internal PMO might be sufficient to handle the integration process. If the acquisition take places with more complex companies, with hundreds or employees and in another country, the support of an external expert might help in having a smooth and quicker integration process
From my experience, its good to have both internal and external support. In our case, we had an internal PMO team to help, and we hired an external consultant to facilitate some of the PMO activities, and provide support as needed. This allowed the work load to be balanced, especially when dealing with a portfolio of transactions.
For me it needs to be led internally, however there is always a need for external support for specific needs (e.g. Tax). But looking specifically at the PMO/PMI it depends on the amount of transactions, size of transactions and the level of expertise within the business to take this on.
My prior experience has always been internal (from buy side doing several deals). I do think it is/should be based upon prior deal experience/size and if the proper personnel exist in the organization.
I think the transaction leader needs to be from internal side of the firm because as you mention he/she knows the business well and can clear roadblocks easily.
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