The deal may be closed after M&A transactions are concluded however, if companies do not take the proper steps to integrate following the closing of the transaction, they may lose out on significant value. As with all M&A activities Merger acquisition integration is the most difficult and time-consuming to execute. A solid team that is well-functioning with clear communication and a solid plan are vital to ensure success.
Pre-integration planning can eliminate many of the issues that companies encounter when integrating. Integration of systems, for example, requires a attentive consideration of issues like data ownership processes sync, ownership of data, and others. Additionally, IT solutions have to be developed early to enable the new unified firm to quickly gain benefits. Planning should start during due diligence, and the PMI Framework should be completed before the transaction is completed. The most important factor to PMI success is to track and identify important integration milestones to track progress and focus on the intended outcome of the transaction.
One common error in integration is to integrate too much, devaluing value by fundamentally altering elements of the acquired company that made it attractive in the first place. Acquiring companies often underestimate the amount of time needed to successfully integrate a newly acquired business.
Another common error is not assessing culture and working norms in sufficient depth. For instance, if workplace cultures of two companies differ there could be conflicts. To avoid such problems http://www.virtualdataroomservices.info/what-is-deal-flow-management/ the acquiring company can begin the assessment during the due diligence phase by bringing key personnel from the target company to examine their work habits and cultural. This can be extremely helpful in determining the type of integration strategy that will be needed when the deal is completed.