By Shoeb Javed
Bringing two companies together during a merger or acquisition (M&A) can be stressful on many levels and carries a high level of risk. To ensure profitability, processes need to be standardized and business systems need to be consolidated. There are mountains of data to analyze, combine, and integrate into one system—whether it’s human resource workflows, product information, sales leads and operations, or quote-to-cash processes.
A recent Deloitte Insights for CIOs article notes that many M&As unsurprisingly fail to deliver their expected return on investment. In fact, a full 78 percent of companies cite failing to integrate effectively as one of the major reasons these deals fall short, according to Maximizing IT Value During M&A Events, The Wall Street Journal, Dow Jones & Company, published in August 2015. The article’s authors say effective integration is also typically the most expensive part of M&A.
Adding to the complexity, newly merged or acquired organizations typically have overlapping systems and applications that must be reviewed and rationalized in order to have a single view of their business and their customers. While organizations aspire to have this happen all at once, it usually takes several months of dual operating to ensure it’s done with accuracy.
Additionally, organizations merging usually have some distinct differences in the way they do business. Typically, there can be any number of business process variations within an individual company. The ability—or inability—to remove inefficient processes and convert to an optimal business model quickly can have a major impact on whether or not an M&A goes well.
In a common post M&A scenario, companies devote armies of skilled talent to finding critical information scattered throughout disparate systems, spreadsheets, and files. Unfortunately, the lack of documentation and variations in processes and systems often prevents teams from getting a complete understanding of what’s actually going on. How can you effectively combine systems and companies if you don’t know what your existing processes are, let alone how they will eventually integrate? In addition, because the discovery is done manually, it is prone to inaccuracy. A person might think their company’s process for quote-to-cash is X when it’s really Y.
A Better Approach Emerges
Fortunately, technology is starting to play a larger role in helping to make M&As smoother and more efficient. In a recent Deloitte study, 63 percent of respondents say they use new M&A technology to assist with reporting and integration. But 62 percent also say they still rely on clunky spreadsheets. That means that while new technologies exist, there are still gaps in the adoption of digital integration strategies available to support M&As.
Today’s most innovative industry leaders turn to automation to discover, document, analyze and verify end-to-end business processes critical to M&A success. Automation can be used to capture actual users’ activity as they perform normal daily tasks and then auto-generate visual workflows and comprehensive documentation for training and compliance.
Rather than tying up highly skilled subject matter experts and relying on costly consultant interviews to define and record business processes and their variations, automation technology can capture the steps a person takes to complete their job. Today, leading companies use automation platforms to discover, map, analyze, and verify end-to-end business processes and capture data critical to the success of mergers and acquisitions. Automation can create visual representations of critical processes across enterprise applications, while generating comprehensive documentation for training and compliance in near real-time. With this technology, M&As are no longer as prone to the human error and inefficiency that have often plagued them.
A solution that deploys process automation to streamline M&A should also suto discover and generate business process flow chart diagrams to show typical user paths in enterprise systems—including how they interact with Microsoft Word, Excel, and various databases. The discovery and documentation of business processes can also include how multiple users or various departments work together via common process paths.
It is important to collect data in a single repository that reflects a golden record of business process information, common user paths, and user interaction analytics.
Create an automation library that can be easily shared across teams and reused by system integrators for an out-of-the box automation solution for new projects.
M&A Profitability
Time, cost, quality, and accuracy are the four key issues that make or break the profitability of any M&A. Automation helps in each of these areas by increasing velocity and streamlining consolidation efforts. Specifically, automated discovery can support M&A efforts by speeding up and simplifying the mundane, time-consuming tasks of finding, aggregating, and reporting data necessary to combine two company’s people, records, and business processes.
In addition, process automation tackles hundreds of steps required to gather employee, product or pricing data, then modify it and enter it into a new company system. With process automation, data is extracted from every system or spreadsheet needed and pulled together in a fraction of the time, with fewer steps, and greater accuracy, giving peace of mind to CIOs and business owners.
Not only does automation save labor hours and eliminate errors due to incorrectly entered values, but it also boosts quality and ensures accuracy by eliminating the human bias that might interpret data differently.
The bottom line is that M&As in the digital age are more complex than ever and can be costly undertakings prone to human error. Teams that leverage automation to tackle consolidation efforts associated with a M&A can save time and money and help create a more streamlined and efficient organization after integration is complete.
Shoeb Javed is the CTO for Worksoft.
