Customer ready whitepaper developed for MIcrosoft Corporation. The whitepaper illustrates how Microsoft Office 2007 helps improve post merger integration success by helping merging organizations effectively form teams quicky, securely, and efficiently, regardless of network infrastructure or organization. Link: http://www.microsoft.com/en-us/download/details.aspx?id=9841

1. Improving the Post-Merger Integration
process with Microsoft Office Groove
2007
Secure, efficient collaboration to improve post-merger
business integration
White Paper
Published: November 2007
For the latest information, please see www.microsoft.com/peopleready

3. Contents
Overview ......................................................................................................... 1
Now That the Deal Is Done: Critical Factors for Successful Post-Merger
Integration .................................................................................................... 2
1. Effective integration planning ............................................................. 3
2. Effective internal and external communication ................................... 3
Challenges to a Successful Post-Merger Integration ................................... 4
Solution: How Microsoft Office Groove 2007 helps improve Post-Merger
Integration .................................................................................................... 4
What Is Office Groove 2007? ....................................................................... 5
The Office Groove 2007 Solution ................................................................. 6
1. Office Groove 2007 supports effective post-merger integration
planning ..................................................................................................... 6
2. Office Groove 2007 facilitates secure communication (internal and
external) .................................................................................................. 12
Office Groove 2007 in Action – Agility........................................................ 13
Conclusion..................................................................................................... 13

4. “A successful integration melds not
Overview
only the various technical aspects of
Merger activity is on the rise. the businesses, but also the different
According to the Wall Street cultures. The best way to do so is to
Journal, global merger and get people working together quickly
acquisition (M&A) deal volume to solve business problems and
in the first seven months of accomplish results that could not
have been achieved before.”
2007 was $3.65 trillion, up 51
Key Lesson from “Making the Deal
percent compared to the same
period in 2006.1 Real”, Harvard Business Review
Many studies have shown that the majority of acquisitions do not meet their
financial goals. According to an analysis of over 7,000 mergers and
acquisitions, between 55 and 77 percent of mergers fail to deliver on the
financial promise predicted when the merger was initiated.2
Evidence Study Sponsor
65%-70% of deals fail to enhance shareholder value McKinsey, 2000
58% of deals reduced shareholder value A.T. Kearney, 1999
27% increase value,33% no change, 50% reduce BusinessWeek,
value Mercer
An article in The Economist stated that ―A stream of studies has shown that
corporate mergers have even higher failure rates than the liaisons of
Hollywood stars.‖3
Why do mergers and acquisitions fail to meet expectations?
A Bain & Company survey of 250 global business executives involved in M&A
found that the number-one reason such deals are unsuccessful is ―ignored
potential integration challenges.‖ More often than not, mergers fail to deliver
expected value because of poor post-merger integration execution.4
A critical success factor for post-merger integration is getting people from the
companies involved to begin working together quickly, even though they may
be on separate network infrastructures and in different locations during the
transition period.
Microsoft® Office Groove® 2007, part of Microsoft Office Enterprise 2007,
provides a collaboration solution that can help improve post-merger
integration. It enables team members from multiple organizations to efficiently
share large amounts of information across multiple locations and networks.
1
Wall Street Journal, August 31, 2007.
2
Alexandra Lajoux, The Art of M&A Integration (New York: McGraw Hill, 2005).
3
―How Mergers Go Wrong,‖ The Economist, July 20, 2000.
4
Jay Grob and Matthew Meachem, The Merger Before the Merger (Bain & Company, February 1, 2005).
Improving the Post-Merger Integration process with Office Groove 2007 1

5. Office Groove 2007 also protects all data with
military-grade security. Often, the solution can be “In many ways, an
deployed quickly and with little IT support. acquisition is like an
arranged marriage:
There are three key aspects of the Microsoft
the „parents‟
Office Groove 2007 solution that help support
negotiate the deal,
post-merger integration:
sign the contract,
 Enabling dynamic, cross-organization teamwork
and then expect the
 „newlyweds‟ to live
Providing anytime, anywhere access
together in
 A single place for virtual teams to work together
harmony.”
– Ashkenas,
Now That the Deal Is Done: Critical Factors
for Successful Post-Merger Integration DeMonaco, and
Francis, ―Making
Recent research on mergers and acquisition (M&A) best practices reveals
the Deal Real.‖
some of the most common factors affecting the success of post-merger
integration:5
 Effective integration planning with a focus on synergies, the merger‘s expected revenue
and cost benefits
 Effective communication
 Clearly defined corporate and merger goals, while simultaneously addressing cultural
differences
 Retention of customers and key employees
 Speed of post-merger transition
Technology cannot replace the critical leadership skills needed to lead post-
merger integration, but it can bring the people, information, and processes
together in a single workspace to work more efficiently. When technology is
used to enhance collaboration between the merging organizations effective
integration planning and effective communication are directly improved raising
the chances of a successful integration. Recent M&A research supports the
relationship between effective integration planning and communication to
overall merger success.6
Evidence Study Sponsor
Firms that focused on choosing a strong deal management KPMG
team and performed in-depth integration planning did 66
percent better than average.
Companies can lose 1 to 2 percent of their planned growth Accenture
during integration unless there is a dedicated integration
plan for revenue retention.
5
Paulter, Paul, The 8 Effects of Mergers and Post-Merger Integration: A Review of Business Consulting Literature (Bureau of
Economics, Federal Trade Commission, January 21, 2003).
6
Paulter, The 8 Effects of Mergers and Post-Merger Integration
Improving the Post-Merger Integration process with Office Groove 2007 2

6. Pursuing synergies vigorously and communicating well KPMG
helped improve a merger‘s financial performance by 45
percent.
1. Effective integration planning
The need to plan early for post-merger integration is critical to success. In
addition to beginning early, integration planning should clearly focus on the
merger synergies, the expected revenue enhancements, and cost savings
resulting from the combination of the companies.
The post-merger integration planning team must work with the deal team to
understand the projected synergies, and then create a road map to achieve
them. This task is challenging because employees from the merging
companies may be located in multiple geographic regions and work on
separate networks. Integration team members cannot share documents and
information through their network and often must depend on e-mail to work
collaboratively.
Collaborating via e-mail and sending highly valuable, business critical
documents raises serious security concerns, including the potential loss of
intellectual property. Recent research7 in high-tech manufacturing has shown
that close to 80 percent of workers have used non-secure public
communications tools to collaborate with partners, and only 27% of business
users and 37% of technical decision-makers surveyed consider their
collaboration tools to be ‗definitely‘ secure. Therefore, the vast majority of the
managers realize the risks they are taking when sharing information through
non-secure e-mail, yet they do little to avoid this risky action.
In addition, e-mail may not be able to support the sharing of larger documents,
such as benefit plan documents, causing members to burden IT or even print
and mail paper copies of documents. E-mail based collaboration can also
create versioning issues and cause revisions to be lost. These issues can
create delays for the integration team when collaborating via e-mail rather
than a secure workspace.
2. Effective internal and external communication
Most acquisitions involve organizational restructuring to improve efficiency of
the combined company or ensure the fit with the new owner. As with any
merger, there are tough decisions that need to be made and communicated.
―Decisions about management structure, key roles, reporting relationships,
layoffs, and other career-affecting aspects of the integration should be made,
announced, and implemented as soon as possible after the deal is signed—
within days, if possible. Creeping changes, uncertainty, and anxiety that last
7
―Microsoft Collaboration in High-Tech Manufacturing Survey 2007‖, Microsoft PressPass, October 25, 2007.
Improving the Post-Merger Integration process with Office Groove 2007 3

7. for months are debilitating and immediately start to drain value from an
acquisition.‖8
Communicating early and often to the newly acquired employees helps
reduce uncertainty. The acquiring company often has a standard plan for
post-merger communication, but in almost all cases, effective internal
communication requires collaboration between management, human
resources and other departments of both companies.
With so many internal decisions to be made and a significant amount of time
spent communicating with employees, some companies going through post-
merger integration lose focus on their external communication to customers,
clients, vendors, the community, and the media. As with internal
communication, it is critical for the management of the two companies to work
together to effectively communicate to its external stakeholders and
customers.
One cause of ineffective or delayed communication is inefficient processes.
Integration team members often waste time reading and reviewing multiple e-
mail messages and multiple document revisions, preventing timely delivery of
communications content.
Other communication challenges related to post-merger integration are similar
to those involved in integration planning, as both require employees to work
across the merging companies. The same difficulties regarding different
locations and separate networks apply.
Challenges to a Successful Post-Merger Integration
Some of the common challenges with post-merger integration planning and
communication include:
 Different organizations, geographies, networks, firewalls, and technology
 Integration team members lack a single space to share information and work together
 Team members are frequently traveling and require offline access to documents
 Maintaining a single version of documents that require input from multiple team members
 Security and confidentiality of information must be ensured
These challenges can delay or even help prevent the achievement of the
merger‘s expected benefits.
Solution: How Microsoft Office Groove 2007 helps improve Post-
Merger Integration
As the quote at the beginning of this paper suggests, the best way to
successfully integrate the technical aspects of the merged businesses and
8
Ronald N. Ashkenas, Lawrence J. DeMonaco, and Suzanne C. Francis, ―Making the Deal Real: How GE Capital Integrates
Acquisitions,‖ Harvard Business Review, January-February 1998.
Improving the Post-Merger Integration process with Office Groove 2007 4

8. cultures is ―to get people working together quickly to solve business problems
and accomplish results that could not have been achieved before.‖
Microsoft Office Groove 2007, part of Microsoft Office Enterprise 2007, can
help solve the communication and collaboration challenges organizations face
during a post-merger integration.
What Is Office Groove 2007?
Office Groove 2007 is a Windows®-based collaboration software program that
helps you and your team members work together dynamically and effectively
on projects and activities from any location. Office Groove 2007 enables
colleagues, partners, and customers to collaborate and stay productive,
whether they are online or offline, all within Office Groove 2007 workspaces
that have advanced security protection and require no IT assistance to set up.
Office Groove 2007 helps
post-merger integration teams
Key Benefits of Microsoft Office Groove
bring the team, tools, and
2007
information together in one
 Work together securely, effectively, and
place, a secure workspace
dynamically
that is accessible to all team

members right on their Bring the team, tools, and information
together in one place, in seconds
computers. Office Groove

2007 provides a collaboration Create and customize workspaces
solution that enables post- without worrying about server space or
security
merger integration teams to

effectively plan, coordinate, Securely Collaborate with colleagues,
partners, and customers — with one
and manage communications.
product. Stay productive anywhere, online
Team members work more
or offline.
efficiently, regardless of
 Workspaces are stored on team
location or network
members‘ computers
connection. Office Groove
 Stay in sync, automatically and
2007 provides both online and
efficiently.
offline collaboration capability

through synchronization. The Automatic synchronization keeps team
members up-to-date
solution can be deployed

quickly and without being Streamline content creation and process
execution
impacted by traditional

barriers to collaboration, such Extend business files, data, and
as network permissions and workflows to team members wherever
they work
firewalls.
 Work with files and structured data right
Office Groove 2007 works in the workspace, online or offline
with Microsoft Office
 Team updates easily become part of
SharePoint® Server 2007 and
the corporate record
Windows SharePoint Services
to form a highly integrated
Improving the Post-Merger Integration process with Office Groove 2007 5

9. collaborative platform, one that helps teams and organizations work together
and share information more effectively. Office Groove 2007 is ideal for ad hoc
collaboration within teams, and Office SharePoint Server 2007 is a Web-
based solution with a scalable, searchable back end that is ideal for broad
information sharing across a team or organization.
The Office Groove 2007 Solution
Some of the characteristics of Office Groove 2007 solutions for post-merger
integration are:
 Teams can form quickly and can include members from all organizations involved in the
merger.
 Large amounts of information can be gathered and disseminated to team members in a
secure and timely manner.
 Team members have access to documents both online and offline, which is critical for
post-merger integration team members who frequently work away from the office.
 Confidential information remains secure at all times, on the desktop and across the wire.
1. Office Groove 2007 supports effective post-merger integration
planning
Office Groove 2007 helps the post-merger integration team work and plan
together effectively inside a collaborative workspace that puts team members,
tools, and information in the same context. Office Groove 2007 workspaces
can be created with no IT assistance or server space, saving the team time
and reducing the chance of post-merger integration delays.
Improving the Post-Merger Integration process with Office Groove 2007 6

10. Post-Merger Integration Planning Workspace
Fabrikam Inc., a worldwide manufacturing firm, has acquired Contoso.
1. Scott Mitchell, the integration manager for Fabrikam, decides to set up
a Microsoft Office Groove 2007 workspace for post-merger integration
planning after seeing the challenges that employees experienced
during previous company acquisitions. Scott creates an Office Groove
2007 workspace for his team on his computer.
2. In a matter of minutes, he sends invitations to join the workspace to key
people from both Fabrikam and Contoso, who are currently on separate
networks.
Improving the Post-Merger Integration process with Office Groove 2007 7

11. 3. When they accept the invitation, each person receives a copy of the
workspace, which is stored on their computer.
4. Office Groove 2007 helps ensure that all members‘ copies of the
workspace stay in sync every step of the way. The workspace is a
virtual place that enables teams to collaboratively share, modify, and
discuss files; chat; hold threaded discussions; manage recurring project
meetings; track tasks, opportunities, and issues; and more.
Improving the Post-Merger Integration process with Office Groove 2007 8

12. 5. The integration planning team can use the workspace to share large
data files, collaborate in real time, and track issues related to post-
merger integration. Offline access to all documents, discussions, and
information in the workspace enables team members who frequently
travel to be more productive when working away from the office.
Improving the Post-Merger Integration process with Office Groove 2007 9

13. Creating the Post-Merger Integration Project Charter
Scott is finalizing the post-merger integration Project Charter, but he requires
assistance from executives to confirm the future cash flow projections for the
merged company. Scott requires input from Jeff, Fabrikam‘s finance director,
and Carol, who was the finance director for Contoso prior to the merger. Scott
uses the Files tool in Microsoft Office Groove 2007 to post the Project Charter,
and then sends Jeff and Carol a message through Workspace Chat with
questions about expected revenue synergies. Carol can quickly open the
Project Charter document in the workspace and reply to the Office Groove
2007 message with details about the past sales revenue of Contoso.
Jeff is in meetings all morning, but when he opens Office Groove 2007 on the
airplane during an afternoon flight, he sees the Office Groove 2007 message
and Carol‘s reply. He makes changes, adds comments, and saves the edited
Project Charter document back to the workspace. When Jeff gets to his hotel
and connects to the Internet, his changes are automatically sent to Scott‘s
computer and synchronized with his copy of the workspace. Scott will see that
his questions have been answered.
In the process before Office Groove 2007, when the post-merger integration
team is formed, a large amount of documentation is sent as an e-mail
message to the team members. In some cases, external Web-based tools are
utilized to share information. This becomes an issue in terms of the network
connectivity requirement, the access control issues, and the lack of portability
of information. Iterations of documents are typically sent as an e-mail
message between team members.
Improving the Post-Merger Integration process with Office Groove 2007 10

14. By utilizing an Office Groove 2007 collaboration workspace, the post-merger
integration team members have an efficient, secure workspace in which to
create and share knowledge. Previous limitations on the portability of
information are eliminated. Teams are now able to easily share information
with all members in the workspace. Integration teams can help keep everyone
on your team apprised on important project milestones, meetings, and
updates.
Post-Merger Integration Planning for Employee Benefits
Ben is the benefits administrator for Fabrikam. Megan has been the benefits
administrator for Contoso for the past 15 years. Ben and Megan have begun
coordinating their efforts to merge the employee benefit plans. The benefits
integration team starts with a simple Microsoft Office Groove 2007 workspace
consisting of a Files tool, which they used to share large files, such as benefit
plan documents and other information. Ben and Megan use the Discussion
tool to securely exchange information about employee plan updates. They
quickly discover that it would be helpful to have a benefit integration team
activities calendar where they can share important planning milestones. They
begin to use the Calendar tool to build a shared employee benefits integration
schedule to track important deadlines, meetings, and upcoming
communication delivery dates.
Office Groove 2007 is an ideal solution for facilitating dynamic teamwork
across the firewall, as in the preceding example. Office Groove 2007 is the
workbench for very frequent information exchanges and dynamic teamwork.
Office SharePoint Server 2007 is a portal for storing and archiving large
Improving the Post-Merger Integration process with Office Groove 2007 11

15. amounts of data that can provide the centralized, scalable systems where that
work gets published, broadly shared and searched, and integrated with
structured business applications.
Some of the documents created in Office Groove 2007 may need to be
archived to an internal Office SharePoint Server 2007 site, both to allow
access for other members of the team while the project is ongoing, and to
create a record once the project concludes. Team members can easily
synchronize the documents back to an Office SharePoint 2007 Server site to
remain part of the permanent project record archive.
2. Office Groove 2007 facilitates secure communication (internal and
external)
The process for creating and reviewing communications to employees of the
newly acquired company can be streamlined with Office Groove 2007. With
Office Groove 2007, reviewers have access to the most up-to-date version of
communication memos. Offline access enables reviewers to complete their
responsibilities even when out of the office. Since speedy communication is
critical during post-merger integration, the ability to resolve issues via real-
time discussions in the workspace helps keep the organization better
informed.
Collaboration on Internal Communications
A human resources team consisting of employees from the both Fabrikam and
Contoso must work together on personnel communications. Ben, Fabrikam‘s
Benefits Administrator, has a standard benefits frequently asked questions
(FAQ) document for employees of the acquired companies. Prior to using
Microsoft Office Groove 2007, creating and reviewing this document took
weeks; Ben had to send an e-mail message to dozens of people, collect all
their changes, and then incorporate them into the master document.
With Office Groove 2007, Ben uses the Files tool to post the FAQ document to
the shared workspace. When Andrea, Fabrikam‘s vice president of human
resources, opens the document, Ben receives an alert that she has entered
the workspace. He clicks on the alert, which takes him into the workspace with
Andrea. Ben then sends Andrea a message through Workspace Chat with
some questions about the retirement plans. Together they engage in
impromptu problem solving, which helps get the FAQ out to employees much
faster.
In addition to these examples, many other employees who execute post-
merger integration activities can benefit from the capabilities of Office Groove
2007. Sales teams that were servicing the same customer can collaborate on
their sales plans. With Office Groove 2007, marketing teams can use the
Discussion tool to gather information about market activities of a competitor,
enabling them to make better-informed decisions and respond faster during
the merger transition period.
Improving the Post-Merger Integration process with Office Groove 2007 12

16. Office Groove 2007 in Action – Agility
Agility is a global provider of integrated supply chain solutions. It is a publicly
traded company with 450 offices in more than 100 countries.
―Over the past decade, the global logistics and transport market has
undergone substantial consolidation, which has resulted in the emergence of
several major logistics players offering extensive services. Agility has turned
to mergers and acquisitions to further use and grow out our network. We are
also investing in sophisticated IT technologies to optimize the flow of
information through the supply chain.‖ Bilal Saleem Perwaize, IT Business
Collaboration Coordinator at Agility, ―
―Early deployment of the 2007 Microsoft Office system has shown how our
people can save time, boost productivity, and strengthen the quality of team
deliverables,‖ said Perwaize. ―We can invite colleagues, partners, and
customers in without worrying about networks or servers. We also found we
can take documents offline in Office Groove 2007, which is a really big
advantage.‖
Conclusion
As the number of mergers and acquisitions has risen dramatically in recent
years, so have the challenges involved integrating the teams and businesses
once the deal is done. Many of these mergers and acquisitions fail to achieve
their financial objectives, and studies have found a major reason is the
inability of teams to work together effectively. The traditional combination of
tools, technologies, and
transportation simply cannot
Groove in Action – Microsoft
provide a secure, dynamic
collaboration platform required Groove, the company, was acquired by
to make the merger work. Microsoft in 2005. Groove Virtual Office
was used by the IT team during post-
As part of the 2007 Microsoft
merger integration to efficiently gather
Office System and a key part
and consolidate key information from
of the Microsoft collaboration
multiple people. Without Office Groove,
platform, Microsoft Office
the process could take several days for
Groove 2007 solves this
an IT integration team member to
problem by making it easy for
gather and consolidate information
employees to get up to speed
about their business processes from
quickly and begin working
20-30 people. With Groove, the IT
together on business issues.
integration team member was able to
Office Groove 2007 provides a
use Groove Forms to collect the key
virtual place for team members
information in a structured format in a
to share information and
centralized workspace, import the data
coordinate their efforts. It
into Microsoft Office Excel®, and share
allows them to connect with
that information via Groove for final
one another in a single
review. The streamlined process cut
days off of this particular post-merger
Improving the Post-Merger Integration process with Office Groove 2007 13
integration task.

17. workspace, regardless of organization, geography, or network infrastructure.
With the 2007 Microsoft Office System, Office Groove 2007 becomes the rich
client for dynamic teamwork, while Office SharePoint Server provides the
centralized, scalable system where work gets published, broadly shared and
searched while integrating with structured business applications.
Office Groove 2007 is more secure and effective for dynamic teamwork than
e-mail or conferencing, and it avoids the IT cost and delay involved in creating
dedicated user accounts for external access. Files can easily be shared
across multiple networks, saving bandwidth and time while making sure
everyone has access to the latest version of the project. Team members are
always up-to-date on project status, and synchronization allows them to work
online or offline. All of these features help generate quick wins that engage
the organization and demonstrate the value of the newly merged business.
To learn more about software for the people-ready business and to find out
how people-ready your company is, visit www.microsoft.com/peopleready.
Legalese
The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the
date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment
on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication.
This white paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS
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© 2007 Microsoft Corporation. All rights reserved.
The example companies, organizations, products, domain names, e-mail addresses, logos, people, places, and events depicted
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Improving the Post-Merger Integration process with Office Groove 2007 14