Over the past years, across different sectors, we witnessed a significant number of acquisitions and mergers, which impacted entire companies or specific branches.
These kinds of operations are a response to a continuously changing market and to an extremely competitive environment.
There are several reasons behind these operations and can be categorized into one, or more, of the following elements:
- Turnover increase
- Market coverage
- Diversification
- Bandwagon effect
- Scale economies
Regardless of these reasons, the transformations are usually managed at central (global or regional) level and tend to follow three main phases:
1. Plan: Preliminary phase until go-live, this is when the real integration process begins. In this phase the following activities occur:
- the new organizational structure (at least for apical roles) is roughly defined
- the synergies and cost savings are identified
- the location of the new company is selected
- the communication towards external and internal stakeholders starts
2. Integrate: The real integration phase until the go live. Based on different drivers, it can happen with different approaches:
- Big bang: one whole Company at integration day
- Phased: consecutive “waves of change”
- Function driven: integration by functions (Sales Force, Sales Operations, Business Functions, Support Functions)
3. Stabilize: The so called “business as usual” management phase. It focuses on redundancy management and synergies realization.
Every single operation commences with a centrally designed blueprint, which should be applied for every single country. Unfortunately, this isn’t always possible due to the different peculiarities of each market in terms of business, regulation and human resources. For this reason, local support becomes crucial. This support provides necessary levels of expertise and market knowledge, which potentially guarantees the business continuity and minimizes possible disruptions and issues.
Other than this, a solid background in pre & post-merger operations is crucial, in order to best manage all the key aspects that will be faced.
Having been involved in numerous integration projects, we acquired a significant level of knowledge. This give us the capacity to identify what the key items are:
- Stock management: The knowledge of the local market and the connection with customers is essential to avoid any stock out or missing products, ensuring a fluid business continuity
- People management: The ability to identify what are the key resources, distinguishing:
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- key talent: specific skills hard to replicate and long-term needs
- key people: critical know-how for migration and short-term needs
- Site choice: Logistic, financial and qualitive drivers necessary to make decisions on the new location of the Company. This should be evaluated only at local level, with specific analysis to be carried out by “Country expert”
- IT systems harmonization: From an IT perspective each company has a set of local applications. This is because the systems adopted by single functions require local adaptation, in order to select the most fitting systems with the future business processes. Often, these systems are not identifiable from a global perspective.
- Order to cash: The review of the order management process, represents a crucial step in the correct implementation of the change. Since each country has its own legal and geographical specificities, local experts in logistic, supply and distribution are highly suggested as supporting players into the decision-making phase. This is to design and select the best model for the future organization.
Over the past years, we have been involved in several merger & integration projects, especially within the pharma environment. Thanks to this, across the years we have developed large experience in such work environment. This allowed us to be recognized by our clients, after implementing successful, flawless and smooth transitions.
For further information, please contact:
Angelo CENTRONE
a.centrone@eurogroupconsulting.it
Riccardo LAURENZA