merger implementation steps+issues
DESCRIPTION
Merger Implementationsteps & issuesA concept documentTRANSCRIPT
Merger ImplementationSteps and Issues
A concept document
This is a concepts document to assist in the planning and management of merger or acquisition implementation projects. Information in this document is based on our experience as management consultants and sources we consider reliable. There are no further warranties about accuracy or applicability. It contains neither legal nor financial advice. For that, consult appropriate professionals.
http://lpf.com [email protected] 2008
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Agenda:
Merger Implementation Assumptions
Four step implementation process:
Step 1: Management structure
Step 2: Inventory
Step 3: Plan the implementation
Step 4: Implement the plan
Conclusion
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Merger Implementation Assumptions
Objectives:
Minimize time & costs
Retain customers
Retain key employees
The merger will capture and integrate the best products and systems of both companies
The implementation will be staged rather than a “big bang”
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Four step implementation process:
A merger implementation process can be defined in four steps:
Inventory
Plan
Implement the Plan
StructureManagement structure, processes and tools
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Step 1: Management structure
Project is generally structured around lines of business with exceptions for facilities, such as networks, that are shared by multiple lines
Within a line of business, structured by major functions: business, systems and operations
A Project Management Office to provide process expertise, coordination, and communication at the project level and major lines of business
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Expand the structure as required
Staff members of the merging companies know the markets, products and systems
Consultants can provide additional:
PMO and project management resources and expertise
Merger implementation structures, guidelines and processes from initial planning to implementation
System integration and data transformation resources and expertise
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Step 2: Inventory
InventoryWhat organizations, products, systems etc. does each company have?
Plan
Implement the Plan
Structure
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Inventory products, systems, ops
The inventory process will move through a series of phases, each adding greater detail
Pre-close
Strategic
Tactical
Pre-close is constrained in terms of the data that can be exchanged –attorneys provide guidelines
Strategic level meetings between the companies specifically to exchange information. Becomes an iterative process of planning then inventory then more planning
Increasing levels of detail to support plans and implementation
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Inventory assumptions
There is great deal of information required for the merger integration:
Find it or develop it
Test and update as needed
Make it available in data bases for the project team and the planners
The planning process will be driven by the amount and quality of the information that is available to the lines of business, systems, and operations
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Pre-close: inventory major activities
Identify the available information about your company’s products, systems and operations
Define, build and begin to populate the data bases that will be used over the life of the merger project
Use public sources and sources approved by your attorneys to develop information about the other company
Prepare for strategic exchange of information immediately after the close
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Inventory information management
Develop one or more data bases to deal with and link the following data topics:
Organizational structure and product ownership
Products – a critical element of the planning process
Computer centers – where, what do they do, …
Operations centers – where, what do they do, …
Communication networks – connect, capacity, …
Data bases used – feed to and/or draw from …
Potential issues related to expansion or termination including civic, leases, utilities …
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Information management - issues
The first level of planning will be based on major products to be carried forward, integrated or terminated; product information is critical to the process
The same product name may be used by more that one business unit and by the two companies to refer to significantly different products; provide for multiple names for the same product and sufficient detail to differentiate products with the same name
Look at current demand and capacity as a baseline plus the other company plus growth to find opportunities for consolidation
Allow for different organizational structures for the ownership of products – changes will have to be coordinated
Test databases, particularly older ones, to assure actual data content maps to data documentation
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Step 3: Plan the implementation
Inventory
Plan
Implement the Plan
Line of business will nominate products; systems and operations will assess; all three will select which to carry forward and the sequence.
Structure
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The planning process
Line of business, systems and ops select productsbased on product benefits and system costs They select implementation sequence based on
market benefits and system costs The planning process will move through a series of
levels, each in greater detail
Initial Review
select majorand sequence
implemen-tation plan
Initial Review
select majorand sequence
Implemen-tation plan
Initial Review
select majorand sequence
Implemen-tation plan
Subsequent Reviews
select nextand sequence
implemen-tation plan
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Planning assumptions
The selection of products will drive the requirements for systems and operations
The planning process will be driven by the information from the inventory that is available to each line of business, systems, and operations
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Planning management - issues
The first level of planning will be based on major products to be carried forward, integrated or terminated; product and relative cost information is critical to the process
Subsequent planning will select additional products and respond to new information about products that have been selected
The same product name may be used by the two companies to refer to significantly different products; provide for multiple names for the same product and sufficient detail to differentiate products with the same name
Planning for products may force consideration of changes in the organization of one company or the other
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Step 4: Implement the plan
Inventory
Plan
Implement the Plan
Structure
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The implementation - assumptions
The implementation will be done in phases and will probably be structured geographically
The process will be driven by:
Time and resources available to make changes
Market impact of changes and their sequence
Systems impact of changes and their sequence
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Implementation issues
Change management is critical to deal with market factors, new information, unforeseen problems, lack of resources, etc.
Changes must be coordinated widely to manage expectations and to integrate elements as planned
All elements must be thoroughly tested; failures will be public
Delivery must meet market commitments
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Implementation issues
Change management is critical to deal with market factors, new information, unforeseen problems, lack of resources, etc.
Changes must be coordinated widely to manage expectations and to integrate elements as planned
All elements must be thoroughly tested; failures will be public
Delivery must meet market commitments
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Four step implementation process:
Structure will reduce the complexity of the merger implementation and provide greater control
Inventory
Plan
Implement the Plan
Structure
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Planning and processes must be built in
Objectives:
Minimize time & costs
Retain customers
Retain key employees
It is almost impossible to meet these objectives unless planning and processes are built in at the start of the project and then managed to completion.
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Lyon, Popanz & Forester
We work in the
white space of
organizations …
including merger
implementation
The white spaces of organizations occur on organization charts between internal departments,
in contractual ambiguity and regulatory complexity. They are places where
functional misunderstandings occur, communication falters, roles change, priorities conflict,
rewards are unclear, risks are unknown, and managers sometimes see threats to their careers
that outweigh the opportunities. We work in those white spaces to
define problems so they can be solved, design solutions so they can be implemented, and
structure implementation so it can be managed.
http://lpf.com [email protected]
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