To receive additional benefits from business mergers, it is necessary to competently integrate them. This procedure requires special skills and experience, This article will present the post-merger integration plan.
The peculiarities of the post-merger integration process
Currently, large companies seek to find additional ways to expand their activities, methods to reduce costs and deal with the consequences of the crisis. One of the most popular ways to solve these problems is through mergers and acquisitions (M&A). In market conditions, this process is becoming a common phenomenon, almost every day. But at the same time, the procedure for integration of two organizations is a completely non-trivial process. Often, companies forget that the transaction consists of several important stages, the owners receive the final result only after the asset has been successfully integrated. Thus, there is a need to draw up an integration plan.
What is the post-merger integration framework?
M&A deals are one of the most popular and challenging areas of change management. Thus, there are many ways for managing these transactions, which have the same structure but differ in the degree of detail and focus. So, it is recommended to follow the “5 step practice” to help you address the needs of the business during the merger and gain control over your finances. This model ensures that key procedures are followed and provides a clear and concise guide to action:
- Planning, timing, benchmarking
Typically, an integration plan is drawn up even before a merger is announced. This is done to ensure that integration is possible in principle and that it can be done quickly. It is important to be clear about your goals. This way you can benchmark and regularly evaluate the progress of the integration. In the initial phase, it is necessary to assign responsibility for the implementation of each process of the finance function.
- Personnel assessment in the finance department and accounting
The takeover firm must immediately conduct an assessment of the acquiree’s finance staff to determine who should stay, who should move, and who should leave. The most effective tool for communicating with staff and creating an atmosphere of trust is general meetings. Also, managers should meet with key people as soon as possible to explain in detail their new roles and responsibilities.
- Ensuring financial control
When establishing control over your finances, do not forget to comply with the Sarbanes-Oxley Act. The due diligence report should be reviewed in detail. It is imperative to analyze the regulatory environment within which you will have to operate. The primary task here is to obtain or create a list of existing requirements and convey the new requirements to everyone who is affected by them.
- Assessment of IT systems
Integrating two or more IT systems can be incredibly difficult, if not impossible, so it is imperative to understand their merits and demerits and to hedge against possible problems. The acquiring company needs to understand the technology platforms and software of the acquired company. The main goal is to ensure that IT systems function normally after the merger and ensure the stability and security of the business. The biggest risks here are business continuity threats, data loss, unauthorized intrusion into a computer system.
- Integration of financial and management reporting
Integration of accounting systems is a complex process. During one merger, we spent months transforming accounting policies, procedures, and forecasting systems to ensure consistency across the merged companies. First, define deadlines for external and internal reporting and test IT capabilities. Then integrate the systems as quickly as possible.