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WHY TIMELY DATA AND PROCESS INTEGRATION IS KEY TO SUCCESSFUL M&A

05/02/2019

Jeanette Mifsud, manager, product marketing, Winshuttle

 

Inorganic growth is a key survival strategy in today’s competitive marketplace. Increasingly, large, established brands are buying up smaller companies with authentic stories and loyal customers. But small companies aren’t the only ones being acquired.

 

The Coca-Cola Company’s acquisition of Whitbread-owned Costa Coffee for £3.9bn is progressing, and all eyes are also currently on supermarket giants Sainsburys and Asda and their plans to merge, which could see them collectively owning over a third of the UK’s grocery market.

 

Regardless of company size or business sector, M&A activities take place to increase market share, reduce operating costs, and achieve economies of scale. But such benefits hinge on the successful integration of physical assets, people, supply chain, distribution channels and partnerships—and something that is often underestimated—data and processes.

 

Many large companies run their business on an ERP system, like SAP, which typically handles everything from financial accounting to manufacturing, sales, and distribution. These ERP systems require vast amounts of data and while extremely powerful, require business users to manually enter and change data via a specialized user interface, which can hamper productivity.

 

Increasing efficiency with business-friendly ERP automation

Let’s take the case of where a large manufacturer acquires a small consumer-goods company. To maximise the potential of the acquisition, the large manufacturer must quickly assimilate the new product line into their business processes, so they can leverage their extensive manufacturing capacity, buying power, and sales and distribution channels. Failure to do so can negate the value of the acquisition if the fast-moving consumer-packaged goods market has moved on.

 

But this assimilation is not easy if launch processes are manual or inflexible, which is often the case with large manufacturers, who typically collect hundreds of data points for each product during the launch process—some of which is needed to comply with external regulatory bodies or internal policies and procedures.

 

The first step is to automate manual ERP processes and give people business-friendly tools like Excel workbooks or web forms that exchange data with the ERP system, eliminating tedious data entry and improving data quality. But it’s key that these automated solutions can easily flex and change to assimilate the processes of the newly acquired company—whether that be merging product launch processes or any other business process, such as procurement, facilities maintenance, invoicing, or HR.

 

Speeding up data migration and ERP consolidation

M&A activity presents other data challenges for large companies, including the consolidation of multiple ERP systems, which can take months or even years without the right automation solutions—even if both companies are running on the same platform such as SAP.

 

These data consolidation and migration tasks often fall to already overworked IT departments or are outsourced to expensive third-party resources—delaying the benefits of the new venture and reducing profitability.

 

One solution is to recruit business teams to help with the data management tasks by giving them Excel-based solutions that enable them to extract, clean and reload data en masse.

 

No longer the purview of technical IT users, these solutions can be created and executed by business users familiar with their systems and data. This business-led, IT-enabled approach can greatly speed up the data integration process and allow the new entity to enjoy many of the promised benefits of the M&A activity sooner.

 

Flexible automation solutions are key to fast business process integration

The ability for large companies to quickly adapt and change ERP business processes after a merger or acquisition can mean the difference between resounding success, mediocre results, and outright failure—regardless of the industry segment. If processes in either of the business entities are manual or automated with ‘homegrown’ solutions, it can take years to consolidate data and create a set of cohesive business processes—hampering growth and innovation and stifling efficiency.

 

Whether companies are attempting to merge production lines, financial accounting teams, or any other business process, a flexible ERP data management platform can give them the agility needed to maximise the benefits the newly merged entity and position them well for future growth and market resiliency.

 

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