Mergers and acquisitions (M&A) represent fruitful business expansion opportunities, however much of the value that a company is likely to realize as a result of these transactions lies in the post-merger integration endeavor. If there is inadequate effort to combine the two firms, operational interferences, value erosion and culture clashes will result. It is an established domain that a properly executed post-integration merger process optimally utilizes the identified areas of synergy of the new formed entity while meeting its objectives.
The post-integration merger phase is an important stage for the convergence of operations, cultures, and governance of the merged entities. It consists of the combination of some or all of the information technology systems, operational procedures, human resources as well as company culture. By concentrating on the details of the planning and communication and leadership while managing the integration, they are able to reduce the chances of disruption and manage however the change flows.
Setting Out a Certain Strategy for Integration
Arguably, one of the most important stages of the M&A integration process is the preparation of the integration plan, which is done prior to the approval of the merger, such as securing all necessary regulatory approvals. In this regard, it is important to define the objectives of the integration, the critical success factors, and the timeline for the integration process as a whole. It is extremely important to screen conflicting ones such as cultural differences or clashing operating procedures at this stage in order to counter them earlier on.
The integration plan should include also the division of decisions and responsibilities amongst the leadership teams from each of the two companies such that all decisions are made without wastage of time or inconsistency. It is necessary to have such an integration plan for efficient execution and for the smooth incorporation of the two entities into one.
Merging Culture and Leadership
One of the factors that are taken for granted in the process of post-merger integration is culture. Employees of the merged entities may experience confusion, feelings of low-ness or even hostility to the merger process in the presence of who culture which does not include them. Failure to do so would bring these problems back again on the leadership hierarchy.
This can be done by allowing employees to communicate freely on what is expected of them, getting employees to accept change, and ensuring that everyone clearly knows what the purpose of changing structure is. It is also important to bring together leaders representing the new co-culture for post-merger integration.
Planning and Executing Operations and Technology Integration
The reconciliation of the elements of the operational integration and technology and systems is also the other ingredient to a successful post-merger process. This stage consist of not cherry picking operational IT, harmonization of operating structures and collaborative chain management. Careful preparation of a plan for the integration of technologies used by the two entities eliminates the problem of jeopardizing the current modes of operation by either of the institutions.
In addition, there is a need to have regular evaluations within the process of the integration to see any deficiencies or contradictions. This ensures that the companies change their ways in an appropriate manner, and that the integration continues being consistent with the main objectives of the merger.
Post Merger Success through Integration
To realize the full benefits of an M&A deal and make the M&A process work, the post-integration merger process is the most important. A seamless merger can be achieved through proper planning of the integration and designing the company’s operational and technology processes. Success is assured if these sensitive areas are targeted as they will assist the rationalized entity in fulfilling its strategic objectives and reducing risks.