M&A strategy shifts creating unforeseen integration implications

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    Dustin Delewski
    Participant

    Over the last few years, I’ve seen my company’s M&A strategy evolve from building onto core capabilities to branch out into new capabilities (new revenue streams, new customers). A lot of this is necessary to sustain growth as we’re running out of M&A options for the core capability space. I see executives underestimating the complexities that integrating new revenue streams and customer types brings, especially in the order to cash business process. Introducing new revenue streams and customers into the business processes often requires that IT applications supporting the business process need to be configured or even enhanced to accommodate taking an order and invoicing for a new type of service/revenue stream. This also typically means that the staff currently supporting these pieces of the process cannot simply absorb the extra workload as the sub-processes vary from the current state. Adding new competencies into a business unit that supports a core competency becomes more expensive and/or less synergistic than deal leadership and corporate development expected (either the current system/team needs to be built out to integrate the new sub-processes, or the original system of the acquired company and team may need to stay in place).

    I’m curious to know if others are seeing this in their businesses and what that looks like for them. In addition to educating leaders and becoming more ingrained in the early conversations of M&A strategy, what other suggestions and best practices does the community have for these M&A strategy shifts and integration expectations?

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