Merger Implementation
     Steps and Issues


    A concept document
This is a concepts document to assist in the planning and management of
merger or acquisition implementation projects. Inf...
Agenda:

 Merger Implementation Assumptions
 Four step implementation process:
   Step 1: Management structure
   Step...
Merger Implementation Assumptions

 Objectives:
       Minimize time & costs
       Retain customers
       Retain key...
Four step implementation process:

 A merger implementation process can be defined
  in four steps:
                   Ma...
Step 1: Management structure

 Project is generally structured around lines of
    business with exceptions for facilitie...
Expand the structure as required

 Staff members of the merging companies know
    the markets, products and systems
   ...
Step 2: Inventory


   Structure

                    What organizations, products,
     Inventory      systems etc. does ...
Inventory products, systems, ops

 The inventory process will move through a series
  of phases, each adding greater deta...
Inventory assumptions

 There is great deal of information required for
  the merger integration:
   Find it or develop ...
Pre-close: inventory major activities

 Identify the available information about your
  company’s products, systems and o...
Inventory information management

 Develop one or more data bases to deal with and
  link the following data topics:
   ...
Information management - issues
   The first level of planning will be based on major products to
    be carried forward,...
Step 3: Plan the implementation

   Structure



    Inventory

                       Line of business will nominate
    ...
The planning process
   Line of business, systems and ops select products
    based on product benefits and system costs
...
Planning assumptions

 The selection of products will drive the
    requirements for systems and operations
   The plann...
Planning management - issues
   The first level of planning will be based on major products to
    be carried forward, in...
Step 4: Implement the plan

   Structure



    Inventory



                Plan




                       Implement the...
The implementation - assumptions

 The implementation will be done in phases and
    will probably be structured geograph...
Implementation issues

 Change management is critical to deal with
    market factors, new information, unforeseen
    pr...
Implementation issues

 Change management is critical to deal with
    market factors, new information, unforeseen
    pr...
Four step implementation process:

 Structure will reduce the complexity of the
  merger implementation and provide great...
Planning and processes must be built in

 Objectives:
     Minimize time & costs
     Retain customers
     Retain key...
Lyon, Popanz & Forester

                                The white spaces of organizations occur on
                      ...
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Merger Implementation Steps+Issues

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Merger Implementation
steps & issues
A concept document

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Merger Implementation Steps+Issues

  1. 1. Merger Implementation Steps and Issues A concept document
  2. 2. This is a concepts document to assist in the planning and management of merger or acquisition implementation projects. Information in this document is based on our experience as management consultants and sources we consider reliable. There are no further warranties about accuracy or applicability. It contains neither legal nor financial advice. For that, consult appropriate professionals. http://lpf.com hal@lpf.com November 2008 2
  3. 3. Agenda:  Merger Implementation Assumptions  Four step implementation process:  Step 1: Management structure  Step 2: Inventory  Step 3: Plan the implementation  Step 4: Implement the plan  Conclusion 3
  4. 4. Merger Implementation Assumptions  Objectives:  Minimize time & costs  Retain customers  Retain key employees  The merger will capture and integrate the best products and systems of both companies  The implementation will be staged rather than a “big bang” 4
  5. 5. Four step implementation process:  A merger implementation process can be defined in four steps: Management structure, Structure processes and tools Inventory Plan Implement the Plan 5
  6. 6. Step 1: Management structure  Project is generally structured around lines of business with exceptions for facilities, such as networks, that are shared by multiple lines  Within a line of business, structured by major functions: business, systems and operations  A Project Management Office to provide process expertise, coordination, and communication at the project level and major lines of business 6
  7. 7. Expand the structure as required  Staff members of the merging companies know the markets, products and systems  Consultants can provide additional:  PMO and project management resources and expertise  Merger implementation structures, guidelines and processes from initial planning to implementation  System integration and data transformation resources and expertise 7
  8. 8. Step 2: Inventory Structure What organizations, products, Inventory systems etc. does each company have? Plan Implement the Plan 8
  9. 9. Inventory products, systems, ops  The inventory process will move through a series of phases, each adding greater detail Pre-close Pre-close is constrained in terms of the data Strategic that can be Strategic level meetings between the exchanged – companies specifically to exchange attorneys provide information. Becomes an iterative process of guidelines planning then inventory then more planning Tactical Increasing levels of detail to support plans and implementation 9
  10. 10. Inventory assumptions  There is great deal of information required for the merger integration:  Find it or develop it  Test and update as needed  Make it available in data bases for the project team and the planners  The planning process will be driven by the amount and quality of the information that is available to the lines of business, systems, and operations 10
  11. 11. Pre-close: inventory major activities  Identify the available information about your company’s products, systems and operations  Define, build and begin to populate the data bases that will be used over the life of the merger project  Use public sources and sources approved by your attorneys to develop information about the other company  Prepare for strategic exchange of information immediately after the close 11
  12. 12. Inventory information management  Develop one or more data bases to deal with and link the following data topics:  Organizational structure and product ownership  Products – a critical element of the planning process  Computer centers – where, what do they do, …  Operations centers – where, what do they do, …  Communication networks – connect, capacity, …  Data bases used – feed to and/or draw from …  Potential issues related to expansion or termination including civic, leases, utilities … 12
  13. 13. Information management - issues  The first level of planning will be based on major products to be carried forward, integrated or terminated; product information is critical to the process  The same product name may be used by more that one business unit and by the two companies to refer to significantly different products; provide for multiple names for the same product and sufficient detail to differentiate products with the same name  Look at current demand and capacity as a baseline plus the other company plus growth to find opportunities for consolidation  Allow for different organizational structures for the ownership of products – changes will have to be coordinated  Test databases, particularly older ones, to assure actual data content maps to data documentation 13
  14. 14. Step 3: Plan the implementation Structure Inventory Line of business will nominate products; systems and operations will Plan assess; all three will select which to carry forward and the sequence. Implement the Plan 14
  15. 15. The planning process  Line of business, systems and ops select products based on product benefits and system costs  They select implementation sequence based on market benefits and system costs  The planning process will move through a series of levels, each in greater detail Initial select major implemen- Review and sequence tation plan Subsequent select next implemen- Initial Reviews Initial sequence major tation plan and select Implemen- Review select major and sequence tationImplemen- plan Review and sequence tation plan 15
  16. 16. Planning assumptions  The selection of products will drive the requirements for systems and operations  The planning process will be driven by the information from the inventory that is available to each line of business, systems, and operations 16
  17. 17. Planning management - issues  The first level of planning will be based on major products to be carried forward, integrated or terminated; product and relative cost information is critical to the process  Subsequent planning will select additional products and respond to new information about products that have been selected  The same product name may be used by the two companies to refer to significantly different products; provide for multiple names for the same product and sufficient detail to differentiate products with the same name  Planning for products may force consideration of changes in the organization of one company or the other 17
  18. 18. Step 4: Implement the plan Structure Inventory Plan Implement the Plan 18
  19. 19. The implementation - assumptions  The implementation will be done in phases and will probably be structured geographically  The process will be driven by:  Time and resources available to make changes  Market impact of changes and their sequence  Systems impact of changes and their sequence 19
  20. 20. Implementation issues  Change management is critical to deal with market factors, new information, unforeseen problems, lack of resources, etc.  Changes must be coordinated widely to manage expectations and to integrate elements as planned  All elements must be thoroughly tested; failures will be public  Delivery must meet market commitments 20
  21. 21. Implementation issues  Change management is critical to deal with market factors, new information, unforeseen problems, lack of resources, etc.  Changes must be coordinated widely to manage expectations and to integrate elements as planned  All elements must be thoroughly tested; failures will be public  Delivery must meet market commitments 21
  22. 22. Four step implementation process:  Structure will reduce the complexity of the merger implementation and provide greater control Structure Inventory Plan Implement the Plan 22
  23. 23. Planning and processes must be built in  Objectives:  Minimize time & costs  Retain customers  Retain key employees  It is almost impossible to meet these objectives unless planning and processes are built in at the start of the project and then managed to completion. 23
  24. 24. Lyon, Popanz & Forester The white spaces of organizations occur on organization charts between internal departments, We work in the in contractual ambiguity and regulatory complexity. They are places where white space of functional misunderstandings occur, communication falters, roles change, priorities conflict, rewards are unclear, risks are unknown, and organizations … managers sometimes see threats to their careers that outweigh the opportunities. including merger We work in those white spaces to define problems so they can be solved, implementation design solutions so they can be implemented, and structure implementation so it can be managed. http://lpf.com hal@lpf.com 24
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