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Avoid the M&A Uh Oh Moment! Have a Plan!
 

Avoid the M&A Uh Oh Moment! Have a Plan!

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Is your company considering, or are you already involved in, a merger or acquisition? ...

Is your company considering, or are you already involved in, a merger or acquisition?

Read this whitepaper now to learn how to standardize Accounting processes and systems during your M&A event!

Who should read this–CEOs, CFOs and Finance & Accounting executives and managers considering or engaged in an M&A event

Top 3 things you’ll learn:
1. Why mergers don’t always achieve the expected synergies
2. How to find the integration model that works best for your organization
3. The benefits of F&A standardization

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    Avoid the M&A Uh Oh Moment! Have a Plan! Avoid the M&A Uh Oh Moment! Have a Plan! Document Transcript

    •    Finance  and  Accounting  Services       Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment       Table  of  Contents     Introduction             2   M&A:  The  Good,  The  Bad  and  The  Ugly         3   How  To  Create  a  Plan  for  Your  M&A  Events     4   The  Key  to  Standardization  Success       5   7  Critical  Questions           6   The  Big  Question:  In  or  Out         6   Benefits  of  Standardization         8   A  Working  Example:  Accounts  Payable       9   How  An  Outsourcing  Partner  Can  Help                              11   How  Sutherland  Can  Help  You                                11   About  Sutherland  Global  Services                              12     Sutherland  FAO-­‐  A  Practical  Overview                              12     Contact  Information                                                            13           Authors:   Steven  Braud,  Vice  President,  Finance  &  Accounting   Stan  Mejia,  Assistant  Vice  President,  Finance  &  Accounting   Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  1
    • Introduction  Many  companies  view  mergers  and  acquisitions  as  a  way  to  increase  synergies  through  increased  market  share,  broadened  customer  base  and  united  corporate  strength.  While  M&A  does  have  the  advantage  of  being  the  fast  route  to  growth,  too  often  these  organizations  do  not  achieve  the  predicted  results.  Numerous  empirical  studies  show  that  a  very  high  percentage  of  mergers  and  acquisitions  fail  to  produce  any  benefits.  Many  times,  the  companies  are  weaker  together  than  they  were  separately.  It’s  no  secret  that  mergers  and  acquisitions  bring  their  own  set  of  challenges.  M&A  events  generally  result  in  multiple  process,  disparate  technologies  and  lots  of  questions  from  people  on  all  sides.  Frequently  after  a  merger  or  acquisition,  companies  are  not  fully  prepared  for  sheer  scale  that  the  integration  and  centralization  of  two  distinct  enterprises  entails.  During  integration,  standardization  is  critical  to  M&A  success;  it  enables  the  newly  merged  company  to  control  costs  and  improves  efficiencies  across  all  departments.  From  IT  to  HR,  and  from  Accounting  to  Sales  &  Marketing,  a  strategic  plan  and  strong  sponsor  is  required  to  ensure  a  smooth  transition  and  capitalize  on  the  combined  synergies.    Savvy  companies  will  centralize  and  standardize  their  F&A  functions  across  their  company,  so  they  can  reap  the  economies  of  scale  that  were  intended  in  their  acquisitions,  and  so  they  can  have  better  cash  efficiency.  This  paper  is  intended  as  an  introductory  guide  to  preparing  for  an  M&A  event  and  building  a  plan,  with  a  spotlight  on  F&A  functions  and  activities.Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  2
    • M&A:  The  Good,  The  Bad  And  The  Ugly  Mid-­‐market  and  larger  organizations  look  to  M&A  activities  to  increase  market  share,  diversify,  lower  operational  costs,  acquire  knowledge  and  patents,  improve  profitability  and  EPS,  or,  quite  simply,  to  survive  in  an  increasingly  competitive  market.  It’s  easier  to  raise  money  as  a  larger  corporate  entity,  and  the  merge  can  bring  in  fresh  talent,  specialized  skills  and  new  areas  of  expertise.    While  it  may  sound  like  a  corporate  match  made  in  heaven,  study  after  study  puts  M&A  failure  rates  anywhere  between  70%  and  90%.  In  fact,  according  to  a  KPMG  study  "83%  of  all  mergers  and  acquisitions  (M&As)  failed  to  produce  any  benefit  for  the  shareholders  and  over  half  actually  destroyed  value."    There  are  any  number  of  explanations,  however,  commonly  cited  challenges  and  obstacles  in  achieving  post-­‐M&A  expectations  are:     1Poor  Strategic  Fit  –  Behavioral  economist  Richard  Thaler  coined  the  phrase  The  Winner’s  Curse ,  which  refers  to  the  fact  that  the  average  acquirer  materially  overestimates  the  synergies  a  merger  will  yield.  Too  often  both  parties  indulge  in  an  overly  optimistic  viewpoint,  seeing  greater  opportunities  than  those  supported  by  hard,  cold  data.  Acquirers  must  take  a  good  look  at  how  the  target  company  fits  into  their  overall  strategy,  casting  a  gimlet  eye  over  the  proposed  benefits  and  synergies.    Lack  of  Thorough  Due  Diligence  –  Assessing  financial  statements,  exploring  the  tax  implications  of  a  deal,  and  evaluating  risk  are,  no  doubt,  key  elements  of  due  diligence.  There  are  a  wide  variety  of  reasons  that  seller  may  provide  inaccurate  numbers  about  the  financial  health  of  their  business.  However,  when  operational  due  diligence  factors  like  strategy,  competencies,  organizational  structure,  company  culture,  and  leadership  are  ignored,  it  can  result  in  disastrous  consequences.    Weak  Leadership  –  Organizational  transformation  requires  strong  leadership.  Leading  the  integration  of  two  cultures  requires  engendering  trust  and  collaboration  between  the  two  separate  entities,  as  well  as  the  ability  to  create  the  common  values  and  visions  that  all  employees  embrace  and  aspire  to  achieve.    Culture  Clash  –  Different  management  styles,  corporate  culture,  conflicting  loyalties  and  linguistics  can  be  overlooked  as  a  “soft”  issue  or  abstract.  Yet,  cultural  differences  and  human  capital  integration  are  often  mentioned  as  two  of  the  most  significant  M&A  challenges.  And,  all  too  few  organizations  bother  to  understand  the  cultural  values  of  the  seller  before  introducing  change.    Poor  Communication  –  Ambiguity  of  message  and  lack  of  answers  fan  the  flames  of  customer,  stakeholder  and  employee  uncertainty  and  nervousness.  Positive,  clear  communication  is  key  to  quelling  public  and  internal  issues  like  layoff  rumors  and  misinformation.  Poor  communication  has  a  direct  link  to  lost  productivity,  employee  morale  and  turnover.    Insufficient  M&A  Resource  Allocation  –  M&A  transactions,  from  the  initial  offer  to  the  close  of  the  deal  and  beyond  through  integration,  require  expertise  at  every  stage  of  the  process.  Companies  considering  M&A  must  examine  the  resources  required  for  due  diligence,  deal  negotiations,  post-­‐merger  human  capital,  process  optimization  and  integration  planning.  1 Richard H. Thaler, The Winners Curse: Paradoxes and Anomalies in Economic Life, Princeton, New Jersey: PrincetonUniversity Press, 1992.Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  3
    • How  To  Create  A  Plan  For  Your  M&A  Events  Strategic  realignment,  the  inevitable  layoffs  and  shutdowns,  the  creation  of  a  single  accounting  system,  integration  of  your  top  talent  and  human  capital,  audits  and  more  audits…  mergers  are  hugely  complex  and  each  step  poses  a  high  risk  of  error.  The  creation  of  a  transition  plan  is  required.  This  plan  needs  to  consider  all  company  divisions  and  end-­‐to-­‐end  business  processes,  include  best-­‐practices  for  integration,  and  set  out  a  fully  accountable  roadmap  that  reduces  any  missteps  and  vastly  improves  the  success  rate.               Definition:  Process  Standardization  3  Critical  Moments  in  the  M&A  Transition   Standardizing  global  processes  is  an   important  step  in  achieving  world-­‐class  To  facilitate  the  successful  centralization   performance.  It  helps  implement  of  the  two,  or  more,  companies  after  the   change  and  improvements,  and  allows  M&A  transaction,  the  work  begins  well   organizations  to  be  m ore  flexible,  before  the  deal  is  closed  with  a  plan  that   transparent  and  realize  organizational  encompasses  all  project  management  and  process  functions.  The  success  of  the  plan   excellence.  Process  standardization   is,  essentially,  a  better  set  of  controls  hinges  on  three  critical  moments:   that  increases  the  efficiency  of     F&A  operations.    1.)  Baseline  Review    As  always,  the  old  management  adage  of  “You  can’t  manage  what  you  don’t  measure”  is  equally  applicable  to  M&A  integration.  Discovery  sessions  and  cross-­‐enterprise  process  mapping  provides  a  transparent  method  of  documentation.  It  allows  both  key  stakeholders  across  the  organization  as  well  as  teams  to  see  their  part  in  whole.  Inefficiencies  become  much  clearer  and  the  interrelationship  among  process  is  more  easily  understood.  More  than  a  simple  document  of  process  flows,  this  baseline  review  is  an  essential  tool  for  leveraging  the  synergy  of  the  combined  operations.  Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  4
    • 2.)  The  Plan  –  Building  &  Executing  Key  stakeholders  must  review  the  end-­‐to-­‐end  process  map  and  prepare  a  plan  for  the  integration  of  all  core  functions.  It  will  cover  hiring,  training,  quality  assurance,  IT  infrastructure  and  the  required  facilities,  and  risk  planning.  Regions  and  countries  are  not  homogenous.  There  will  be  differences  in  technology,  process,  compliance,  language  and  local  policies.  You  have  to  allow  for  some  customization  at  the  local  level.  However,  all  common  points  across  the  organization  must  be  consistent.  Change  must  be  prioritized  across  the  silos.  Then,  steadily  and  consistently,  merger  integration  solutions  must  be  rolled  out  according  to  the  priority  list.    3.)  Integration    Post-­‐integration,  cross  training  and  job  shadowing  ensure  a  smooth  transition  before  the  integration  process  “goes  live”.    This  will  facilitate  the  teams  to  drive  change  without  disruption  to  business  and  operations.  To  fully  realize  the  M&A  change  management  program  across  the  various  departments,  each  part  of  the  transformation  process  must  be  reviewed,  tracked  and  sustained.  The  ongoing  governance  of  the  newly  integrated  –and  standardized–  processes  is  critical  to  achieving  efficiencies  and  to  ensuring  that  redundancies  are  removed.  Governance  is  simplified  by  employee  buy-­‐in  and  engagement  across  the  enterprise.    The  Key  To  Standardization  Success:  Your  Sponsor  Companies  trying  to  standardize  on  their  own  often  use  a  project  manager.  While  a  project  manager  may  be  essential  to  coordinating  M&A  standardization  efforts,  a  strong  sponsor  is  required  to  galvanize  the  various  teams  throughout  the  organization  –  from  senior  management  to  the  working  teams.    Post-­‐merger  or  acquisition,  the  CFO  is  busier  than  ever,  without  the  bandwidth  to  lead  the  charge.  To  drive  the  standardization  of  operational  F&A  functions,  ideally  the  sponsor  is  positioned  at  the  Controller  level,  with  in-­‐depth  finance  knowledge  and  a  keen  understanding  of  the  desired  ultimate  outcomes.  It  is  critical  for  the  change  management  sponsor  and  key  stakeholders  to  agree  on  the  transformation  objectives  and  outcomes.    A  sponsor  will  drive  the  overall  project  from  acquisition  to  integration  and  will:   • Lead  the  change  management  and  drive  values   • Manage  the  ongoing  nature  of  the  integration  process   • Attack  bumps  in  the  road  right  away   • Report  progress  to  the  Senior  Leadership  Team   • Work  through  problems  to  reach  resolutions  that  are  best  for  the  organization   • Communicate,  communicate,  communicate    Strong  and  focused  leadership  is  the  hallmark  of  successful  transformations.  It  is  essential  for  the  integration  to  be  led  by  someone  who  has  authority  to  drive  the  program  across  all  companies  and  all  levels  of  the  company;  and  someone  who  understands  the  politics  of  the  M&A  and  can  deal  with  them  deftly.                    Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  5
    •  The  7  Critical  Questions         Successful  integrations  are  those  that  have  a  clear  and   aligned  vision  with  strong  stakeholder  buy-­‐in,  supported   by  a  well-­‐coordinated  process  transformation  plan.  When   preparing  the  roadmap  for  the  integration  and   standardization  of  the  F&A  department,  there  are  a  few   questions  that  should  never  go  unanswered.        1. What  are  your  expectations?  2. Is  there  a  communications  plan  in  place  to  ensure  clear,  effective   communication  and  collaboration  throughout  the  Finance  and  Accounting  department?    3. What  processes  in  each  organization  are  best  in  class?  4. Have  you  identified  high-­‐value  and  non-­‐value  activities  in  each  organization?  5. Do  you  have  a  plan  to  implement  and  manage  change  that  defines  key  success  factors   throughout  the  integration  lifecycle  and  is  strategic,  accountable,  disciplined  and  agile?  6. Do  you  have  the  right  F&A  talent  to  support  the  process  change?  7. Are  you  sufficiently  managing  risk  and  have  stakeholders  agreed  on  what  should   be  done  to  mitigate  risk?    The  Big  Question:  In  Or  Out?  When  companies  merge,  the  inevitable  question  is,  “Who  is  going  to  do  what  and  how  are  we  going  to  do  it?”  This  cuts  to  the  very  heart  of  any  M&A  transaction.  Management  must  decide  whether  the  organization  merge  functions  or  operate  the  businesses  autonomously.  Will  there  be  a  shared  services  approach  to  F&A  between  the  company  and  the  subsidiary?  Or  will  the  company  outsource  its  F&A  functions?    Operate  Businesses  Autonomously   Benefits:     • Status-­‐quo  retained   • Change  kept  to  a  minimum   • Time  to  evaluate  options   Risks:     • Status-­‐quo  retained   • Process  and  cost  efficiency  not  realized   • System  constraints  from  disparate  systems    While  many  enterprises  find  it  advantageous  to  combine  resources,  there  may  be  a  business  case  for  continuing  to  operate  as  separate  entities.  Companies  may  choose  to  remain  autonomous  to  protect  their  proprietary  materials.  Budgetary  constraints  or  the  perceived  cost  of  centralization  may  influence  how  the  post-­‐merge  entities  run  their  day-­‐to-­‐day  operations.  Most  M&A  events  result  in  a  pooling  of  resources,  however,  employee/management  resistance  to  P&P  change  may  cause  difficulties.  As  well,  business  cultures  that  do  not  blend  well  together  can  also  lead  to  a  lack  of  integration.  Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  6
    • Create  a  Shared  Services  Center   Benefits:     • Process  optimization   • Economies  of  scale   • Controlled  internally     Risks:     • Realizing  transition  and  transformation  costs   • Key  staff  lost,  not  retained   • Internal  change  management    Cost  reduction  through  the  elimination  of  redundant  tasks  is  a  common  goal  for  mergers.  The  shared  services  approach  is  a  collaborative  strategy  between  the  buyer  and  the  merged/acquired  company,  where  F&A  functions  and  processes  are  centralized,  reducing  repetition,  usually  in  a  lower-­‐cost  labor  market.  Newly  merged  companies  often  feel  that  this  approach  allows  them  to  retain  full  control  over  their  finance  department.    However,  companies  that  take  an  in-­‐house  approach  to  centralization  and  standardization  often  do  not  achieve  maximum  benefits  of  the  M&A  transaction.  The  main  culprits  are:  lack  of  expertise  in  organizational  transformation,  lack  of  a  process  plan  and  strategy,  and  lack  of  human  resources  to  effectively  oversee  effective  change.      Partner  With  an  Outsourcing  Provider   Benefits:     • All  of  the  benefits  of  a  Shared  Services  model  PLUS   • Labor  arbitrage   • Process  standardization  &  best  practices   • New  technology  &  toolsets   Risks:     • Transition  timeframe   • Knowledge  transfer   • Challenges  of  change  management    Outsourcing  is  frequently  a  byproduct  of  standardization.  Often  a  subset  of  F&A  functions  outsourced,  particularly  tasks  and  processes  that  are  perceived  as  non-­‐essential  to  organizational  differentiation,  like  payroll.  The  company  can  then  build  economies  of  scale  and  leverage  operational  efficiencies  around  basic,  low-­‐value  functions.    More  and  more,  enterprises  are  starting  to  outsource  the  strategic  functions  of  F&A  as  well,  as  this  assists  CFOs  in  using  information  rather  than  generating  it.      Global  BPO  providers  offer  a  variety  of  outsourced  models,  with  companies  opting  for  functions  to  be  tasked  onshore  (for  example,  Sutherland’s  Management  Controllership  Center  in  Tulsa,  OK),  a  blended  model  (management  in  Tulsa  and  transactional  work  offshore)  and  pure  offshore  (everyone  is  offshore).  With  leading  BPO  partners,  clients  instantly  have  access  to  world-­‐class  facilities,  highly  skilled  talent,  best  practices  processes  and  controls.  A  BPO  partner  also  has  the  experience  to  drive  process  engineering  from  “quick  wins”  to  “game  changers”.    Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  7
    • Benefits  Of  Standardization  Process  standardization  in  Finance  and  Accounting  as  well  as  throughout  the  organization,  allows  a  company  to  become  more  transparent  and  agile.  The  establishment  of  consistent,  repeatable  F&A  processes  is  the  start  of  the  journey  toward  ‘operational  excellence’.      When  processes  are  codified  and  engineered  purposefully,  the  effect  on  business  can  be  profound.    Maximum  Efficiency  Standardization  drives  efficiencies,  as  an  enterprise  can  codify  rigorous  and  consistent  processes  across  the  organization  and  subsidiaries.  The  result  is  vastly  diminished  function  repetition  and  staff  redundancies,  lowering  operational  costs.  These  streamlined  processes  enable  F&A  managers  and  staff  can  focus  on  strategic  business  objectives  and  less  on  day-­‐to-­‐day  tactics.    Agility  Through  Visibility  Access  to  shared  tools,  knowledge  and  real-­‐time  reports  is  the  foundation  for  increased  communication  and  collaboration.  F&A  staff  members  can  more  quickly  identify  potential  issues,  and  cross-­‐organizational  visibility  provides  key  stakeholders  with  better  business  intelligence.  This  decision-­‐making  information  allows  the  company  to  react  more  quickly  to  market  trends  and  opportunities,  positively  impacting  profits.    Reduced  Risk  The  built-­‐in  accountability  of  a  standardized  end-­‐to-­‐end  process  imposes  greater  controls,  checks  and  balances,  and  thereby  reduces  risk.  Additionally,  high  quality  reporting  and  consistent  documentation  assists  with  a  clear  audit  trail  and  facilitate  with  regulatory  compliance.    The  numerous  benefits  of  standardization  include:   • Economies  of  scale  and  cost  reductions   • More  accurate  high-­‐quality  financial  reporting   • Cross-­‐organizational  visibility   • Simplified  and  more  insightful  decision-­‐making  information   • Optimized  staffing  resources   • Increased  accountability   • Highly  effective  knowledge  sharing   • Better  controls  between  subsidiaries  and  business  functions   • Reduced  risk  and  increased  governance   • Better  compliance   • Improved  flexibility  and  quicker  reaction  to  the  global  market   • More  strategic  collaboration  across  management/silos   • A  stronger  competitive  position  When  team  members  are  working  with  the  same  tools  and  information  across  the  organization,  the  end  result  is  maximum  efficiency  and  profitability.  Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  8
    • A  Working  Example:  Accounts  Payable    Is  Your  Finance  Department  Drowning  in  Paper?  Without  standardization,  inefficiencies  and  redundancies  appear  in  a  variety  of  ways,  and  each  indicator  has  an  impact  on  how  your  company  performs,  in  terms  of  both  external  issues,  like  customer  service,  and  internal  bottom-­‐line  influencing  factors.  Here  are  some  common  indicators  that  an  A/P  department’s  processes  should  be  standardized  and  optimized.       Indicator   Impact   People   • Bloated  staff  structures   • High  G&A  labor  costs   • High  turnover   • Lack  of  staff  continuity   • Stagnant  turnover  inflating  salaries   • Inconsistent  customer  service   • Decentralized  model     Process   • Lack  of  clear  policies  &  procedures   • Customer  service  issues     • Manual,  paper-­‐based  processes   • Impact  on  working  capital   • Long  cycle  times   • Poor  supplier  relationships   • High  volume  of  exceptions   • Unable  to  identify  root  cause  of  issues   • Minimal  service  levels     • Minimal  reporting   • Paying  vendors  too  frequently   • Poor  visibility   • Limited  controls  &  compliance   Technology   • Disparate  systems   • Manual,  paper-­‐based  processes   • Lack  of  system  integration   • Unable  to  optimize  available  functionality   • Minimal  e-­‐tools   • High  support  and  maintenance  costs     • Limited  or  no  automated  workflow    Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  9
    • For  companies  considering  or  going  through  a  merger  or  acquisition,  there  are  three  key  ways  to  maximize  the  outputs  of  your  about-­‐to-­‐be  or  newly  merged  F&A  departments:   • Leverage  your  people   • Harmonize  your  processes   • Implement  the  technology    Leverage  Your  People  Maximize  the  collective  intellectual  capital  of  your  accounting  department  by  giving  your  managers  more  time  to  think  strategically  and  deliver  true  value  in  the  form  of  business  insights,  new  ideas  and  innovations.    Identify  processes  that  can  be  outsourced  or  performed  through  a  shared  services  approach.  Go  through  the  entire  F&A  cycle,  starting  with  A/P  and  cash  apps.  These  are  the  most  transactional  of  the  F&A  functions.  Starting  with  these  transactional  processes  often  results  in  immediate  cost  savings  and  helps  leverage  your  people  so  they  can  get  away  from  the  busy  work  and  concentrate  on  the  work  that  matters.  Harmonize  the  Processes  One  of  the  things  Sutherland  sees  time  and  time  again  with  companies  who  have  approached  us  for  post-­‐merger  consulting,  is  that  the  company  didn’t  have  the  plan  and  process  in  place  to  standardize  the  F&A  functions,  or  they’ve  applied  a  “lift  and  shift”  approach,  simply  implementing  the  buyer’s  process,  without  regard  to  best  practices  or  improvements.  Merged  companies  quickly  arrive  at  the  stark  realization  that,  despite  the  merger,  there  are  a  multitude  of  diverse  processes  and  standards.  Standardizing  the  F&A  processes  ensures  reliable,  high-­‐quality  reporting,  and  it  can  often  prove  to  be  a  key  factor  in  the  economic  development  of  the  organization  as  a  whole.  The  processes  from  the  merged  companies  should  be  combined  into  a  single  standard  to  take  full  advantage  of  the  economies  of  scale.  While  regional  differences  are  factored  in  during  harmonization,  all  common  points  across  the  organization  must  be  consistent.  Implement  the  Technology  The  CFO  and  CIO  work  together  to  evaluate  their  technology  options  in  the  ERP  integration.  There  are  countless  considerations  to  factor  into  the  final  decision:  budget,  time,  organizational  and  IT  infrastructure,  and  M&A  objectives  are  just  the  tip  of  the  iceberg.    To  maximize  efficiencies,  a  commonality  among  the  IT  systems  is  required  for  companies  that  want  to  avoid  uncommon  data,  under-­‐employed  major  software  applications,  numerous  redundant  data  centers  and  computing  platforms,  etc.  The  IT  choice  they  make  will  influence  their  ability  to  control  and  manage  the  operations  on  a  global  or  national  level.  Management  objectives  need  to  be  translated  into  system  objectives.  The  ERP  and  IT  support  strategy  are  not  just  about  technical  considerations  and  requirements.  It  goes  much  deeper  than  that.  The  technology  and  tools  used  are  about  aligning  business  structure  and  strategy,  F&A  processes,  common  reporting,  communication,  and  responsibilities.Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  10
    • How  An  Outsourcing  Partner  Can  Help  A  qualified  outsourcing  provider  can  help  an  organization  with  best-­‐in-­‐class  solutions  to  maximize  M&A  events.    A  world-­‐class  outsourcing  provider  goes  beyond  cost  reduction:  they  function  as  a  partner  to  collaborate  on  solving  business  problems  using  outcome-­‐based  thinking  to  focus  on  transformational  activities  that  generate  value.    Develop  and  implement  policies  and  procedures  –  An  outsourcing  partner  has  the  expertise  to  create  a  strong  transformation  process  plan  with  transparent  accountability,  strong  controls  and  clear  strategic  outcomes.    Access  to  tools  and  technology  –  Partnering  with  an  outsourcing  vendor  delivers  instant  quality  improvements,  with  access  to  high-­‐quality  tools  and  technology  needed  to  automate  manual  processes  and  standardize  systems.    Optimize  non-­‐value  activities  –  Outsourcing  partners  provide  a  proven  way  to  reduce  daily  operational  costs  by  removing  and  optimizing  non-­‐value,  transactional  activities.      Focus  management  on  strategy  and  growth  –  Removing  non-­‐value  activities  from  the  daily  operations  allows  newly  merged  companies  to  focus  on  the  core  work  that  matters  to  create  value  and  drive  performance.    Provide  the  right  F&A  talent  –  Instead  of  struggling  to  obtain,  train  and  retain  specialized  F&A  talent  –from  senior  executives  to  A/P  clerks–  companies  can  instantly  tap  into  an  extensive  pool  of  highly  skilled  accounting  professionals.    How  Sutherland  Can  Help  You  In  addition  to  reducing  the  cost  of  the  Finance  function,  outsourcing  provides  CFOs  with  the  opportunity  to  focus  their  retained  organization  on  the  core  competencies  and  strategic  vision  that  are  important  to  the  organization’s  competitive  position  and  bottom  line.      Sutherland  can  help  you  move  from:     To:   • Finance  as  a  function   • Finance  as  a  business  partner   • Transaction  processing  requiring   • Focus  on  performance   effort  and  attention   management  for  core  processes   • Focus  on  ad-­‐hoc  operational   • Finance  operations  very  low  cost   solutions   and  effective    Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  11
    •  About  Sutherland  Global  Services  Sutherland  Global  Services  is  a  multi-­‐national  technology-­‐enabled  business  process  outsourcing  (BPO)  services  company  providing  a  unique  combination  of  vast  BPO  resources  as  well  as  extensive  expertise  and  industry  knowledge  in  Finance  and  Accounting.  We  help  you  build  a  high-­‐performance  finance  organization  by  combining  accounting  best  practices  with  proven  BPO  processes.  Our  global  service  delivery  infrastructure  and  full  range  of  outsourcing  solutions  –  from  specific  transactional  processes  to  controller  and  compliance  functions  –help  you  reduce  costs  while  gaining  better  visibility  and  control  of  financial  processes  and  data.  All  of  our  finance  and  accounting  engagements  are  led  by  our  Controllership  &  Management  Center,  based  in  Tulsa,  Oklahoma.      Our  strategy  quickly  improves  your  F&A  operations  by  adapting  a  set  of  standardized  processes  and  using  technology  and  automation  to  improve  efficiency.  We  begin  by  analyzing  your  existing  accounting  workflows,  then  we  design  an  outsourcing  solution  based  on  your  business  objectives  and  available  resources.  Ongoing  processes  are  transferred  to  our  organization.  Once  this  transition  is  complete,  we  follow  through  to  ensure  flawless  service  delivery.        The  Result:  You  gain  access  to  higher  quality,  more  complete  financial  information  to  support  effective  tactical  and  strategic  decision-­‐making  across  your  business.  Our  outsourcing  solution  not  only  reduces  the  cost  of  the  finance  function;  it  provides  CFOs  the  opportunity  to  focus  the  organization  on  what  is  strategically  important  to  the  business.    Sutherland  FAO  –  A  Practical  Overview  Structure   • Globally  distributed  delivery  capacity  and  domain  capability   • The  Deloitte-­‐established  Tulsa  FAO  Centre  of  Excellence  has  been  servicing  clients  since   1995   • Strategic  global  locations  designed  to  satisfy  SSAE  16  standards  and  Sarbanes-­‐Oxley   requirements    Capability   • Full  suite  of  FAO  services  –  transaction  processing  to  financial  and  management  reporting   • Integrated  Analytics  to  support  Collections,  Financial  Planning  and  Analysis  functions   • Onshore,  offshore  and  hybrid  solutions  tailored  to  meet  client-­‐specific  needs    Expertise   • Dedicated  team  experienced  in  business  transformation,  process  optimization  and   transition  services   • Expertise  in  utilizing  existing  client  applications  and/or  SGS-­‐hosted  ERP  systems   • Robust  set  of  add-­‐on  technologies  supported  by  in-­‐house  application  management  team    Flexibility   • Custom-­‐crafted  Pricing  and  Commercial  Structure  aligned  to  client  needs  and  objectives   • Output/Outcome  Based  Pricing  and  No  Termination  penalties          Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  12
    • Contact:    To  have  a  deeper  discussion  about  the  M&A  process,  please  contact:    David  Kaminski,  Senior  Vice  President,  Client  Engagement,  F&A  Services  PHONE:  +1  (904)  699-­‐1985  EMAIL:  david.kaminski@sutherlandglobal.com  WEB:  www.sutherlandglobal.com    David  is  the  Senior  Vice  President  of  Client  Engagement  for  Sutherland’s  Finance  &  Accounting  Outsourcing  Practice.    With  over  30  years  of  experience,  David  has  worked  as  a  Partner  with  Capgemini,  and  has  served  as  General  Manager  of  Worldwide  Financial  Services  for  Microsoft  Corporation.  During  David’s  9  year  tenure  at  Microsoft,  his  responsibilities  were  split  between  running  two  global  businesses  as  Chief  Credit  Officer  of  Microsoft  Corporation  and  President  of  Microsoft  Capital  Corporation.    David  and  his  team  of  400  professionals  managed  a  global  asset  of  $8  billion  in  more  than  180  countries.    Steven  Braud,  Vice  President  F&A  Services  PHONE:  1+(585)  520-­‐4079  EMAIL:  steven.braud@sutherlandglobal.com  WEB:  www.sutherlandglobal.com    Steven  is  a  Solution  Architect  with  Sutherland’s  Finance  &  Accounting  Outsourcing  Practice.    With  over  30  years  of  experience,  Steven  has  worked  for  Fortune  50  companies  in  Strategy  Formulation,  Business  Performance  Management,  Accounting,  Transformation,  General  Accounting  and  Close  &  Consolidation.    He  is  an  industry  expert  in  Order  to  Cash  for  outsourcing  and  has  consulted  with  several  Fortune  50  Companies  for  Cost  Reduction,  Performance  Management,  Shared  Services,  Finance  Transformation  and  ERP  Implementations.    Stan  Mejia,  Assistant  Vice  President,  F&A  Services  PHONE:  1+(918)  461-­‐4766  EMAIL:  stan.mejia@sutherlandglobal.com  WEB:  www.sutherlandglobal.com    Stan  is  a  Transition  Expert  with  Sutherland’s  Finance  &  Accounting  Outsourcing  Practice.    With  over  30  years  of  experience,  Stan  has  worked  for  some  of  the  leading  Accounting,  Consulting  and  Outsourcing  companies  in  the  world,  and  was  an  Accounting  Center  Controller  for  one  of  the  nation’s  largest  retailers.    He  has  a  strong  background  in  Consolidation,  Transition  and  Transformation  within  an  accounting  organization,  and  his  experience  includes  serving  as  the  Lead  Client  Service  Representative  for  several  accounting  outsourcing  programs,  including  those  that  require  both  domestic  and  offshore  services.      Avoiding  the  M&A  ‘Uh-­‐Oh’  Moment      ©  2012  Sutherland  Global  Services.   Page  13