Take the pain away from M&A

The M&A market is booming. So far this year, we’ve seen mergers between leading enterprises such as Bristol Myers Squibb and Celgene, United Technologies and Raytheon and FIS and WorldPay— and the trend won’t stop anytime soon.

The most interesting merger of 2019, in my opinion? BB&T and SunTrust. The merged entity will become the 6th largest bank in the US and, as the largest bank merger since the 2008 financial crisis, it signals a sea change. In the words of Greg McBride, chief financial analyst of Bankrate, “This deal’s going to open the floodgates to a number of more bank acquisitions and a renewed wave of consolidation.”

However, such deals, while beneficial for the companies undergoing them, often put considerable strain on the people involved. Or, as I sometimes call them, the four headaches.

Four common issues

When two companies wed, these situations are guaranteed to arise:

  1. Lack of visibility – Do you have full visibility into the other company’s assets, services and processes?
  2. Rationalizing the portfolio – Are there redundant capabilities? How can you ensure that you don’t have two independent tech stacks?
  3. A coordinated approach – How can you ensure everyone has visibility across all work streams?
  4. Delivering an integrated employee experience – How can you deliver a simple experience for employees from day one? How can you make those employees feel like they’re part of something bigger and better?

The good news: while you can’t entirely avoid these issues, there’s a (relatively) simple way to lessen their impact, streamline the process and, dare I say, make M&A nearly painless.

The key factor: visibility

Visibility is the single most important factor when it comes to M&A because it’s critical to nearly every action you’ll take – including contending with extensive regulatory considerations.  For example, every M&A requires due diligence and integration planning, both of which rely heavily on acquiring detailed information on everything from financials to resources. Without the full picture, it’s all too likely that your integration will blow through the budget in a year and leave disconnected and overlapping capabilities.

The question, then, is how to create visibility. In this case, application portfolio management (APM) will be your new best friend, allowing you to manage costs, rationalize your portfolio and see overlapping business and technology capabilities.

Creating a seamless experience 

M&As aren’t just stressful for executives. Your employees will worry about how their lives will change, and your customers may wonder if the quality of their service will go down. The process can be confusing and stressful for them, and it’s up to you to make sure they feel reassured. Ideally, your employees won’t just feel less stressed; they’ll feel like they’re a part of something bigger and better than before.

One way to accomplish this is to present them with a unified employee experience. While your HR systems still may be fractured in the early stages of integration, employees shouldn’t have to work around that complexity.  Create a “layer” – an intuitive experience facing employees, with requests routing to legacy systems in the background.

This capability isn’t just limited to employees. A similar layer can be created for customer service as well. And for organizations like banks, who can’t afford to have complex or dysfunctional customer-facing systems, such measures serve as protection while the underlying systems are consolidated and streamlined.

So there you have it: my best tips for a relatively painless merger or acquisition. Let me know in the comments, and feel free to reach out via LinkedIn if you’d like to discuss this further.

Brian Retzlaff, Executive Consultant, Financial Services at ServiceNow