The M & A market is booming. So far this year we have mergers between leading companies such as Bristol Myers Squibb and Celgene. United Technologies and Raytheon and FIS and WorldPay– and the trend will not stop so fast.
The most interesting merger of 2019 in my opinion? BB & T and SunTrust. The merged company will be the sixth largest bank in the US and, as the largest banking merger since the 2008 financial crisis, will be a major transformation. In the words of Greg McBride, Bankrate's financial analyst, "This deal will open the floodgates for a series of further bank acquisitions and another wave of consolidation."
While such businesses are beneficial to businesses, they are often a significant burden on those involved. Or, as I sometimes call them, the four headaches.
Four common problems
When two companies get married, the following situations are guaranteed:
- Lack of visibility – Do you have full insight into the assets, services and processes of the other company?
- Streamline your portfolio – Are there redundant functions? How can you make sure you do not have two independent tech stacks?
- A coordinated approach – How can you ensure that all employees are visible in all workflows?
- Providing an integrated employee experience – How can you give employees a simple experience from day one? How can you make these employees feel part of something bigger and better?
The good news: Although you can not completely avoid these problems, there is a (relatively) simple way to reduce their impact, streamline the process, and, in my opinion, make M & A virtually painless.
The key factor: visibility
Transparency is the most important factor in mergers and acquisitions as it is critical to virtually all of the actions you take – including full regulatory compliance. For example, each M & A requires due diligence and integration planning, which relies heavily on providing detailed information from financial data to resources. Without the overall picture, it is very likely that your integration in a year will break the budget and leave behind unconnected and overlapping features.
So the question is how to create visibility. In that case, Application Portfolio Management (APM) is your new best friend, allowing you to manage costs, streamline your portfolio, and see overlapping business and technology features.
Create a seamless experience
Mergers and acquisitions are not just stressful for executives. Your employees will be worried about how their lives will change, and your customers will wonder if the quality of their service will decrease. The process can be confusing and stressful for them. They need to make sure they feel calm. Ideally, your employees will not only feel less stressed. They feel part of something bigger and better than before.
One way to achieve this is to provide them with a unified employee experience. While your HR systems may still be flawed in the early stages of integration, employees should not have to bypass this complexity. Create a "level" – an intuitive experience for employees, where background requests are routed to legacy systems.
This feature is not limited to employees only. A similar level can also be created for customer service. And for organizations like banks that can not afford to have complex or dysfunctional customer systems, such measures serve as protections while the underlying systems are consolidated and streamlined.
So there you have it: my best tips for a relatively painless merger or acquisition. Let me know in the comments, and do not hesitate to contact me LinkedIn if you want to discuss this further.
Brian Retzlaff, Executive Consultant, Financial Services at ServiceNow
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