Strength in numbers – ten tips for successful post-merger integration
Article by Ritu Bugli, Chief Operating Officer, SKS Business Services
As the accountancy sector undergoes unprecedented consolidation, SKS chief operating officer Ritu Bugli shares what she has learnt about post-deal integration while leading the successful mergers of over 15 firms into the SKS group.
Mergers deliver the efficiencies, technology and marketing powers of a larger group, but success hinges on post-deal integration. Combining two companies will inevitably disrupt longstanding routines, culture, and workflows. Here are ten tips to transform integration from a challenge to an opportunity.
1. Create an end-to-end integration plan (and execute it as early as possible)
A comprehensive integration plan will ensure that a merger works for both parties from Day One. It outlines how the newly acquired business will integrate into the group-wide operating model in a defined timeline.
It should be created in parallel to the M&A process and identify critical tasks, stakeholders, timelines, risks and mitigation.
2. Create an integration working group
The integration plan should be created by a dedicated working group, comprising the acquirer’s integration team and a team from the firm to be merged. Its purpose is to ensure partnership in the transition from existing business processes to new ways of working together.
3. Set realistic timeframes
The M&A and integration teams need to be aligned with the project timelines. The integration team should flag any activities that cannot happen within the proposed timeframe at the project planning stage to avoid unnecessary delays. For example, the migration of some business operations may take longer if they are complex or deal with large volumes of information.
4. Don’t forget the clients!
Focusing on internal integration planning makes it easy to forget about clients. Evaluate how the integration is likely to affect client relationships and plan accordingly. A thorough communication plan with timely messaging is crucial. The senior stakeholders should choose the best way to communicate the news, usually by telephone calls to their most sensitive clients, followed by personalised emails or letters to all clients. The communication must convey a positive message highlighting the benefits of the merger.
5. Accept that integration is an emotional process
The period immediately after a merger can be unsettling for staff as the status quo changes. We cannot overstate the importance of change management and a dedicated internal communications plan to mitigate this.
The acquirer’s executive team, M&A team and integration team must work closely with the local team and HR to make this aspect of the business merger as smooth as possible.
6. Ensure clear and candid information exchange
As the M&A progresses, it is helpful for the acquirer’s operations team to meet with the target company to understand current ways of working, strengths, weaknesses and opportunities for improvement.
There should be a detailed handover between the two teams to avoid re-working things which are already part of due diligence. All information should be stored in a centralised location.
7. Identify areas for prioritisation
Not all areas of integration need the same amount of attention. For example, the newly acquired company might already use the same accountancy software as the larger group, so no training is needed. On the other hand, their current systems and processes might be quite different and need alignment with the group’s standard policies.
The prioritisation schedule should consider seasonal timings and deadlines, existing staffing levels, and other background projects.
8. Monitor progress
Once the M&A is completed, the integration team must monitor and track the progress of the end-to-end integration plan. This enables them to capture and mitigate risk. In addition, it prevents bottlenecks that could delay the integration process.
For example, integration requires significant input from senior stakeholders from the incoming business. If they are not available, there is a risk of delay. The integration team can remove this risk by allocating stakeholder time in advance and managing it as the process progresses.
9. Ensure open communication channels
M&A often creates fear and uncertainty for employees and management. Regular communication can help build trust and confidence. Management should be well prepared and prompt in responding to employee questions and concerns. So, again, an excellent internal communication strategy is vital.
10. Get the executive team visible and involved
The executive team of the larger group should have an up-to-date overview of the integration process through high-level meetings and dashboard data. In addition, they should join local team meetings where possible. Not only does this give the executive team an understanding of progress, but it also demonstrates a top-down commitment to the new partnership.
Never stop learning
As each of our mergers at SKS moves from new beginnings to ‘part of the family’, we learn and add to our end-to-end integration planning checklist. This ensures the subsequent merger or acquisition has the benefit of those before it.
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