The appetite among professional services (PS) firms for mergers and acquisitions (M&A) appears as healthy as ever. But for any firm embarking on an M&A deal – especially across international markets - growing your business this way is not without its challenges.
Merging with - or acquiring - another firm is about more than simply bringing together the nuts and bolts of an operation. It involves combining the intangible elements of a business, such as people, differing company culture's and brands. There are also other, crucial operational considerations to throw into the mix, vital to its success, namely blending IT systems and business processes.
When it comes to unifying technological processes, things are often more complicated than they need to be. Firms come with their own assortment of disparate systems and software packages. The risk of duplication and gaps in reporting as well as a lack of business optimisation will often directly hit a company’s operating margins through lack of efficiency and divergent decision making. This reinforces statistics unveiled in a Deloitte survey, which states that 75% of acquisitions do not achieve value targets due to lack of integration, mainly because of a failure to align metrics and provide insightful reporting.
Let it roll
When it comes to M&As, the boardroom goal is almost always for the dominant firm to reignite growth and become more competitive in their current and or new markets. But, according to research Deltek recently commissioned, the majority of PS firms will take up to a year to fully integrate new companies.
Installing an industry specific ERP system will enhance communication, connect resources and provide a deeper and more meaningful level of visibility for both parties. The right technology will be one of the key drivers of the acquisition, leading to the objectives and financial goals of all parties being met sooner rather than later.