Effectively Managing Post Merger Integration

The Art of Post M&A Integration

One of the many questions that companies face in a post M&A environment is “How do we identify and manage access rights to existing and new systems that are in place?” Corporate IT is faced with the challenge of determining what systems and projects require new levels of approval. Not only do new approval processes need to be established, but providing a common platform to define and execute processes, document proper approvals and provide users immediate updates are simply not in place to handle the additional workload.

These are common challenges that many IT departments face in the wake of corporate M&A. In order to ease the pain of integrating organizations into a unified corporate structure, required approval processes not only need to be established but executed through a common system. By adopting technology that can provide this capability quickly and effectively, a post-M&A corporation can reduce the chance for unauthorized user access, inappropriate approvals, heavy reliance on IT for end user support and lost documentation of process activity. Nutrient Workflow solutions address these key challenges and deliver the high ROI and rapid deployment that is critical to the success of any M&A integration.

The M&A Marketplace

The demand for solutions to these problems will only increase. Merger & Acquisition activity should continue at the same rate in 2005 and 2006. Fewer targets have created higher pricing. Low-interest rate environment in many instances has created higher acquirer stock prices. Balance sheet capacity is a significant long-term issue for sellers. Increase in regulatory requirements such as Sarbanes & Oxley may cause potential sellers to sell.
Considering the 2005 increase in M&A activity and further activity expected for 2006, IT departments should be well prepared to handle integration issues. Companies that respond quickly to address these issues can expect efficiency gains and a reduction in costs associated with integrated process management.

Research evidence going back to the 1970s demonstrates that mergers and acquisitions have an unfavorable impact on profitability. They are strongly associated with lowered productivity, labor unrest, higher absenteeism, and poorer accident rates. Depending on which study one reads, 50% to 80% of all mergers and acquisitions turn out to be financially unsuccessful.
Research also indicates that senior executives rate “underestimating the importance and difficulty of integrating cultures” as a major cause of integration failures.

High ROI - Customer Case Studies

Nutrient Workflow’s solution for BPM has been implemented to help solve the problems that organizations face as part of the post-merger integration.

GlaxoSmithKline (GSK) was formed in 2000 through a merger between Glaxo Wellcome and SmithKline Beecham, two organizations with histories reaching back to the early 1800s. With such a large workforce culled from two sizable established organizations, GSK’s IT team found its request processing methods to be diverse and disconnected. The company’s IT departments were developing their own methods and interfaces for processing users’ requests for IT equipment and service without following a standard template or system. There was a redundancy of some processes and resources while some services and equipment weren’t even available through online requests. While the work was getting done, users were confused about where to go for service and how to make their requests, and management wanted a more organized and efficient method that would more effectively manage and utilize staff and resources.

As a key component of the GlaxoSmithKline post-merger integration toolkit, Nutrient Workflow solutions facilitated the accelerated integration of employees across the merging organizations through secure and authenticated processes that manage their IT business support.

Northern Natural Gas (NNG), on being acquired by MidAmerican Energy Holdings from Enron, was in a situation where they lost a majority of their product licenses and were faced with having to quickly adopt new technologies to support their business. NNG needed something immediately to manage user requests, routing and approvals for IT access and licenses. After searching for a solution that could be implemented quickly and would be flexible enough to meet their current and future needs, NNG turned to Nutrient Workflow. They now rely on iApprove to manage over 800 processes that involve user requests for access and other critical business functions.

After the acquisition of CCB, National Commerce Financials IT Operations team needed a system to manage the growing branch and user population. There was not a system in place to control access to systems by employees at their many branches. NCF implemented Nutrient Workflow to improve efficiency and document approvals for user access requests across the newly expanded organization.

Nutrient Workflow: Key to effective post-merger management

These real-world success stories show how implementing a web-based system can not only execute processes according to an organization’s unique business rules but do so quickly and without extensive training.

Post-M&A organizations need answers to 2 essential ingredients with a request/approval management system:

-Simplicity in their process definition and user interfaces
-Rapid implementations, not lengthy projects.

Nutrient Workflow’s Lean BPM solution provides these and more.

The Solution: Nutrient Workflow

Nutrient Workflow’s flexible process management system allows companies to automate requests and streamline approval processes. The software provides form creation, routing definition and tracking tools to those responsible for processing requests, which leads to minimizing data entry and simplifying requests for approval and fulfillment. Nutrient Workflow is Web-based, allowing both easy user accessibility and management of approval processes. It eliminates typical problems related to labor-intensive processes, such as manual paper handling and email requests, and can reduce costs per transaction 60 to 90 percent compared to paper-based processes.

With Nutrient Workflow, efficiency gains are immediate, and most companies can expect a return on investment (ROI) in three months or less. And this is the kind of result that can make any M&A a win.