M& A Integration
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M&A integrations can often be extremely complicated due to the level of interdependencies throughout the entire organization. What are the key tasks that need to be done to ensure the synergy benefits are realized? How should tasks be prioritized for optimal value delivery?
One of my favorite sayings to use throughout an integration process is “If everything is a priority, nothing is a priority.” Many integration teams will want every project to work in tandem to complete the implementation in the shortest time to start growing the business. This thought process brings in inherent risk to the overall programs success due to overlooking many of the interdependencies throughout these projects. Tasks should be prioritized based on critical path items and “nice-to-haves.” The goal of the integration team is to align with all parties on the critical path projects to complete, which will ensure business continuity is maintained and there will not be any “re-work” on the back-end.
A consultant’s favorite answer, “it depends.” Industry, size, executive strategy and goals will all dictate what needs to get accomplished to make the integration successful. With that being said, establishing proper governance will shine light on the path forward. We consistently utilize a solution architecture group who acts as an intermediary between the project management group and the many functional workstreams that they oversee to bubble up high-priority risks and issue and address the simpler items to keep the team directed towards the most important tasks on the integration project plan.
The key tasks to realize synergies is dependent on the deal rationale. The deal rationale will articulate the revenue and cost synergies to be realized, which should then be delegated to the respective functions and/or business units to realize. The IMO can help track and manage the synergies, but will not directly own the outcomes of targeted synergies, since it is a temporary governance structure. However, the IMO can and should help identify, track, and manage interdependencies that are identified by functions and BUs that may be required for execution; conflicting interdependencies can then be managed through the IMO escalation/approval process (e.g. SteerCo).
Hi !
In my opinion, the key to getting the priorities right for optimal achievement of synergies will depend entirely on the realistic ‘Post-Close Operating Model’ that the new entity arrives at keeping in mind its Mission, Vision, Strategy, Guiding Princples & Transaction Objectives. Hope this helps.
Hi! I think there are many good points here by the other repliers, however I would just like to point out something about realizing synergies – firstly you have to confirm with the Target that the synergies that you have estimated (based on limited information in the pre-singing phase) are actually achievable and discuss with them how. Perhaps there are also other synergies that you can come up with together now that you have full information about both parties, that could even add on to those you came with initially.
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