www.pwc.co.uk/consulting
Integrating
successfully
Make sure your deal delivers
Getting the right balance
The motivation behind every deal may be different, but the underlying theme is always
the same – value. There are two sources of value in the context of a deal, whether it’s a
large scale merger or an acquisition to add a niche capability.
There is the value to be gained from the opportunities that arise
when bringing two organisations together, the reduction of costs,
increased revenues and the invigorated culture. And there is also
the value of the underlying business, which needs to be protected
while the integration is underway. That involves managing the
integration risk sensibly, structuring the integration to meet your
time and cost objectives and avoiding too much complexity.
The vital step is to balance the integration- securing the new
value and also protecting the old. This needs a strong focus on
three key priorities:
• having clarity around objectives and targets that detail the
value to be delivered
• maintaining strong control over costs, issues and scope
• managing your people through the change.
Stay focused on the value
In our experience, over 70% of transactions leave value
opportunities unexplored. The key is to develop a comprehensive
view of the sources of value in your integration from a clear
statement of your deal rationale, and make sure it’s understood
and agreed. Once identified you can then set targets, and plan how
you’ll integrate the acquisition early in the deal cycle. There will be
several sources of value depending on the nature of the deal –
some very focused, such as purchasing synergies, and others will
require a fundamental rethink of your operating models and
business functions. The earlier you look at this, the better.
Are you getting your integration right?
• Are you clear on the rationale and objectives for the deal?
• How detailed are the synergy estimates used in the
financial model?
• How, to what level and at what speed will you integrate?
• What are the right operating models within each of your
key businesses/functions?
• Does your team have both the experience and the
bandwidth to deliver?
• What will change on Day 1?
• Are you clear on the cultural differences and how best to
address them?
A balanced approach to successful
integration
Value
Stay in control
Many deals fail to deliver their expected value because of the
challenging risk profile transactions present. Managing ambiguity
and the management stretch during an integration needs objective
challenge, robust process and fit for purpose governance structures to
allow speedy and effective decision making to maintain momentum.
Bring people with you
Integrations are challenging times for your people. Leading the
process requires focus on both the rational and emotional aspects
of the change and managing the cultural migration as effectively
as the physical changes you want to make. Engaging your people
in the process, establishing your top team quickly and building
clear interim and future operating models across the business is
key to managing ambiguity and uncertainty to give as much clarity
as possible to new and old colleagues.
Integration
Control
Core
business
People
A successful integration
across all your functions
The integration will touch every function in your organisation
and each will face its own specific challenges. These include:
Finance – operating successfully from Day 1, the first 100 days
and delivering on all the necessary business as usual requirements.
Tracking the benefits and value of the integration and defining the
role they play as well as creating a strategy and vision for the
combined finance function.
People – considering the legacy cultures of the organisations,
understanding skills needed and retaining and engaging
with people through the transition process. Designing the
new organisation structure, and harmonising the reward and
benefits programme.
Technology – making technology work for the business with an
IT strategy, supporting architecture and systems from the right
suppliers at the best price. Management information you can rely
on and risk and security processes in place.
Procurement – deploying a tested process to get the most value
from your suppliers, supporting the needs of the business from
Day 1. Implementing the most effective supply chain model.
Bringing value to you
Every integration is different and has its own challenges.
We will assemble the right team to help you identify those
critical gaps in your integration. We’ll keep you focused on
what’s important and of real value to you. Here are just some
of the benefits we’re delivering to clients:
Synergies without disruption – Well managed integration
delivers synergies more quickly, causing less interruption to
business as usual.
Resolution of issues previously seen as too difficult – Integration
programmes are often a catalyst to address underlying concerns
in performance or the operating model.
Effective management of potential risk – Solid process
and governance gives stakeholders comfort that risks are
under control.
A refreshed and engaged workforce – Clear and consistent
communications can motivate a newly merged workforce.
A client story
We supported a UK listed semiconductor company in their
$300m acquisition of a competitor, fielding teams in the UK,
Silicon Valley and Israel to manage the integration
programme. Over six months, with our specialists in
integration, culture and programme management we helped
them to identify and plan for the delivery of $100m in
savings, equivalent to 12% of the combined cost base.
“The PwC team was personable, knowledgeable and
approachable and had a good cultural fit with our company.
We agreed unanimously that they would provide the necessary
resource to keep us focused, point us in the right direction and
make things happen.”
Client feedback: Senior Vice President, Human Resources
Contacts
Erika Schraner
+44 (0) 20 7804 0401
[email protected]
Fiona Webb
+44 (0) 20 7804 4650
[email protected]
Holger Hintze
+44 (0) 20 7804 0559
[email protected]
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