Merger Implementation steps & issues A concept document

1. Merger Implementation
Steps and Issues
A concept document

2. 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 hal@lpf.com
November 2008
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3. 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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4. 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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5. Four step implementation process:
 A merger implementation process can be defined
in four steps:
Management structure,
Structure processes and tools
Inventory
Plan
Implement the Plan
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6. 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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7. 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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8. Step 2: Inventory
Structure
What organizations, products,
Inventory systems etc. does each
company have?
Plan
Implement the Plan
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9. Inventory products, systems, ops
 The inventory process will move through a series
of phases, each adding greater detail
Pre-close
Pre-close is
constrained in
terms of the data Strategic
that can be Strategic level meetings between the
exchanged – companies specifically to exchange
attorneys provide information. Becomes an iterative process of
guidelines planning then inventory then more planning
Tactical
Increasing levels of detail to
support plans and implementation
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10. 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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11. 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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12. 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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13. 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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14. Step 3: Plan the implementation
Structure
Inventory
Line of business will nominate
products; systems and operations will
Plan assess; all three will select which to
carry forward and the sequence.
Implement the Plan
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15. The planning process
 Line of business, systems and ops select products
based 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 select major implemen-
Review and sequence tation plan
Subsequent select next implemen-
Initial
Reviews Initial sequence major tation plan
and select Implemen-
Review select major
and sequence tationImplemen-
plan
Review and sequence tation plan
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16. 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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17. 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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18. Step 4: Implement the plan
Structure
Inventory
Plan
Implement the Plan
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19. 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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20. 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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21. 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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22. Four step implementation process:
 Structure will reduce the complexity of the
merger implementation and provide greater
control
Structure
Inventory
Plan
Implement the Plan
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23. 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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24. Lyon, Popanz & Forester
The white spaces of organizations occur on
organization charts between internal departments,
We work in the in contractual ambiguity and regulatory complexity.
They are places where
white space of functional misunderstandings occur,
communication falters, roles change, priorities conflict,
rewards are unclear, risks are unknown, and
organizations … managers sometimes see threats to their careers
that outweigh the opportunities.
including merger We work in those white spaces to
define problems so they can be solved,
implementation design solutions so they can be implemented, and
structure implementation so it can be managed.
http://lpf.com hal@lpf.com
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