In the specific case of corporate take-over by acquisition, I’ve often been surprised by how much the first 100 days of integration is difficult: instead of fitting nicely into the acquirer’s operations the acquired company reveals obviously very different practices.
Those discrepancies were perhaps noticed during the #DueDiligence process but left over for later because of so many different other topics to cover in a such limited time frame. On top of that, it is not unusual to see the due diligence process carried out by a part of the acquirer’s corporation totally different than the part who will be in charge of the integration. The #investmentbanker can bring a very valuable and professional advice during this very difficult pre-acquisition phase. But once the deal is settled the characteristics of the operations need to match.
A significant amount of time and effort from both sides has been devoted to understanding the hard and soft #synergies leading to the improvement of value creation. The best prepared also spend time to align the #valueproposition of the acquired company and its Mission, making sure the Vision and Values are also in phase. So what is missing? I mean, all the hard work has been done so what else can go wrong?
Does this look familiar, have you been experiencing this kind of situation? Here’s my top 3 of the most challenging issues:
1 – IT
Merging the IT structures can be a daunting task as the IT infrastructure relates to the operation, the management and even the historical background. The IT being a critical part of the company in term of security, the IT manager is often not very keen to open his mind to other concepts.
2 – Accounting
This is probably an unexpected topic. After all the accounting has most of the time a very similar format. But again, different cultures have different practices, especially when it comes to analytical accounting. With differences in the way of tracking the cost and revenues and the way to understand the concept of a project, it is common to generate a bunch of useless records and reports, leading to conflicting discussions on how to interpret them.
3 – Reporting
As expected, the reporting is a difficult part, with different formats, different topics and subjects to be covered. The acquired company may even not be used to reporting practices, at all.
But do all the different practices need to be harmonized? What if the strength of the acquired company is also due to its organization?