Uploaded on

Presentation from the CIO event held by WinWire Technologies with KapStone

Presentation from the CIO event held by WinWire Technologies with KapStone

More in: Technology , Business
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
721
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
0
Comments
0
Likes
1

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Leveraging Microsoft Technologies to Enable M&A GrowthByChristophe DeslandesChief Information OfficerKapStone
  • 2. About
    KapStone was started as a Special Purpose Acquisition Corporation (SPAC) for the purpose of building a domestic paper-and-packaging business through acquisitions.
    Stated goal to grow to $2B - $5B range within 2-5 years.
  • 3. KapStone Today
    2 Kraft paper mills+ 1 lumber mill
    Headquartered near Chicago
    Publicly traded on NYSE
    ± $800MM revenue
    1,600 employees
    IT team: 30 full-time, 39 FTE
  • 4. KapStoneTimeline
    Listed
    NASDAQ
    Listed
    NYSE
    Second
    Acquisition
    First
    Acquisition
    Founded
    As S.P.A.C.
    Third
    Acquisition?
    Small
    Divestiture
    2005
    2006
    2007
    2008
    2009
    2010
    2011
    ERP
    Upgrade
    ERP
    Goes
    Live
    ERP
    Project
    Begins
    Corporate
    Apps
    Complete
    4
  • 5. Part 1Building a Company
  • 6. Initial Challenges
    As of Jan 1, 2007:
    $270MM business
    No IT infrastructure of our own
    18 months to migrate from seller’s systems
    IT staff: 7 + 1 non-IT transition manager
    Most applications already selected but no plan to integrate them
    Challenge: traditional ERP model doesn’t fits well in a process industry
  • 7. KapStone’sApproach
    Collaboration and Analytics Backbone
  • 8. Technology Stack
    ERP
    CMMS
    OE/MES
    Fiber
    CRM
    Lumber
    Presentation,BI, DMS
    & Collaboration
    Orchestration
    DBMS/BI
    Configuration
    Platform
  • 9. Risk Mitigation
    To facilitate system integration, we enforced the following requirements for our apps:
    Windows®-based
    SQL Server®-based
    Active Directory authentication
    Robust integration layer (BizTalk, SOAP or XML preferred)
    For cloud services: SOAP/XML interfacing
    Clearly define the process boundaries between systems
    i.e. once a transaction becomes $$$, feed to ERP!
    Maximize support from Microsoft
  • 10. System Integration Model
    ERP
    OE/MES
    CRM
    BizTalk
    Connector
    BizTalk
    Connector
    Text Files
    Fiber
    CMMS
    XML/MSMQ
    XML
    XML
    Rail
    Lumber
    XML
    X12
    BANKS
    XML
    EDI VAN
    Bus. Activity Monitoring
    All interfacing and integration is done through BizTalk Server.
    We support a variety of formats.
    Leverage BizTalk BAM to create self-service interface management portals for end users.
  • 11. What About the Front End?
    Integrating multiple apps has many advantages:
    Flexibility
    No or little customization
    Easy to upgrade
    And one big disadvantage:
    Multiple, loosely linked reporting sources
  • 12. Reporting Approach
    Like most companies, we start with static reporting, but also…
    Document the app’s data dictionary & build views
    Leverage the static reporting work to build BI cubes
    Involve the vendor in cube design (or use theirs first!)
    Bring in experts to design cubes as needed
    • ERP/CRM must be system of reference
    • 13. Common taxonomy is paramount!
  • Our Journey into BI
    ERP
    OE/MES
    Lumber
    CMMS
    Fiber
    SSRS
    PerformancePoint
    1 – Started with static reporting – documented data dictionary!
    2 – Built OLAP cubes for each app (or used vendor’s)
    3 – All cubes are based on SQL/SSRS
    4 – Support various reporting technologies
    5 - Migrate to dynamic reporting in SharePoint
  • 14. Customer-Facing Infrastructure
    customer-side
    integration
    platform
    customer
    DMZ
    transactions
    web
    services
    auth.
    data
    SSRS
    Active Directory
    1-way
    trust
    replication
    Active Directory
    Active Directory
  • 15. Benefits of KapStone’s Approach
    Cost competitive:
    SAP: $5,537/user/year1
    KapStone: $2,371/user/year2
    Upgradable:
    Little customization = quick, cost effective upgrades
    • Upgraded AX in under 6 months in 2009
    Any system can be replaced or upgraded without affecting others
    Agile:
    Ability to add new systems quickly
    • Added Avantis in 6 months in 2009
    Ability to integrate new acquisitions
    Sources: (1) Panaya Inc. 2009 SAP® Support Practices Benchmark Survey
    (2) KapStone 2009 ERP support budget exclusive of depreciation
  • 16. Part 2Support Growth Through M&A
  • 17. The M&A Market is Heating Up
    “The volume of mergers and acquisitions grew in 2010 by 25%.
    (…) A survey of top bankers (…) expect deal volume to increase by at least 15% in 2011 from the previous year.”
    The Wall Street Journal, January 3, 2011
  • 18. M&A Challenges: 10 Things to Remember
    Typical M&A challenges for IT:
    IT isn’t always “in the loop”
    Acquisitions are often behind on IT investments
    Pressure to get off seller’s systems quickly
    Pressure to consolidate financials & BI quickly
    Don’t always know where IT growth will be
    Manage Communication
    Security is a big concern
    IT must take the lead on non-IT activities
    Must be compliant within 12 months
    Acquisitions lead to divestitures
  • 19. 1. IT isn’t always “in the loop”
    Too often CIOs are not brought in early enough when a deal is negotiated.
    • Tell your Board and CEO that you must be brought in Day One.
    • 20. Ask them if they’d want to know the true cost of merging IT asset before or after negotiating a price!
    • 21. Be ready with:
    migration cost models
    system documentation (especially interfacing)
    methodologies
    app & technologies portfolio
    standards
  • 22. 2. Acquisitions are often behind on IT investments
    Businesses being sold tend not to invest much in IT!
    • Be ready to upgrade servers right away
    • 23. Be ready to roll out new desktops (real or virtual) right away
    • 24. Acquisitions are a good opportunity to get out of unwanted support contracts  upgrade Day One!
    • 25. Technologies to leverage:
    Hyper-V server virtualization, Terminal Services, desktop virtualization
  • 26. 3. Pressure to get off seller’s systems quickly
    In case of a divestiture, some apps may be running on the seller’s infrastructure.
    TSAs are costly.
    • Negotiate rights to transfer licenses or run temporary instances
    • 27. Go after low hanging fruits (email, DMS)
    • 28. Migrate legacy apps to virtual instances in your datacenter
    • 29. Technologies to leverage:
    • 30. Hyper-V virtualization
  • 4. Pressure to consolidate financials & BI quickly
    Consolidation of financials and operating KPI are essential.
    • Aim for Day 30
    • 31. Upgrade from Excel-based consolidation:
    • 32. Leverage middleware
    • 33. Automate consolidation (at least on your end)
    • 34. Technologies to leverage:
    • 35. BizTalk, SQL Server, SharePoint
  • 5. Don’t always know where IT growth will be
    What will grow the most: email? Storage? Transactions? Network? Apps? Desktops?
    • Buy yourself flexibility ahead of time with clustering:
    • 36. Exchange
    • 37. BizTalk
    • 38. SQL Server
    • 39. Terminal Server
    • 40. Hyper-V consoles
    (you can have a 1-node cluster!)
    • Virtualize all other apps for easier migration to bigger hardware
  • 6. Manage Communication
    Loose lips sink ships – and acquisitions!
    • People recognize due diligence when they see it
    • 41. Keep them in the loop but control leaks
    • 42. Social media isn’t making this any easier
    • 43. Negotiate a communications plan with the CEO
    The IT staff will be very concerned about their future
    • Communicate honestly
    • 44. Communicate early and often
    • 45. Listen to their concerns
    • 46. Explain that there will be changes and why
    • 47. Make the case for delayed downsizing
  • 7. Security is a BIG concern
    Security practices may not be up to your standards.
    Some employees may be disgruntled.
    • Insist on antivirus being up to date as a condition of sale
    • 48. Lay down the law on Day One:
    • 49. Password complexity rules
    • 50. Computer Use policy
    • 51. Firewall rules
    • 52. Server protection & configuration management
    • 53. Engage an independent security auditor
    • 54. Technologies to leverage:
    • 55. SCCM, Forefront Protection Server Script Kit, Visual Studio TFS
  • 8. IT must take the lead on non-IT activities
    Many non-IT M&A activities result in IT work:
    merging COA
    AP, AR, HR, CRM ETL
    customer & item masters
    If not coordinated, this results in headache and rework for all
    • IT PMO should volunteer PM leadership
    • 56. Share your collaboration tools with the other departments
    • 57. Provide testing sandboxes
    • 58. Technologies to leverage:
    • 59. SharePoint, Hyper-V virtualization, MS Project
  • 9. Must be compliant within 12 months
    Pick your poison: SOX, PCI, HIPAA, SEC, …
    You’ll have at most 12 months for the new unit to be compliant!
    • Plan for robust and well documented integration, even if temporary
    • 60. Implement Change Management, Access Control and Configuration Management policies on Day One
    • 61. Technologies to leverage:
    • 62. BizTalk Server, SCCM, Visual Studio TFS
  • 10. Acquisitions lead to divestitures
    Acquisitions often lead to divestitures:
    due to regulatory constraints
    to finance M&A activities
    for business alignment
    Plan for future divestitures:
    • Have a methodology!
    • 63. Virtualize divisional apps and integrate them through middleware to allow for easy decommissioning
    • 64. Technologies to leverage:
    • 65. BizTalk, Hyper-V virtualization
  • Key Takeaways
    Build a flexible infrastructure
    Know your systems and know your cost structure
    IT must take a leading role in M&A activities
    Leverage your existing infrastructure to quickly and painlessly absorb acquisitions