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Nicolas Schobinger | Business Transformation Academy - Post Merger Integration - Case Study from SAP

This presentation was given to the European Business Transformation Conference, an event of the Business Transformation Academy (www.bta-online.com). The overall topic of the event was “Post-Merger Integration”, which is one of the main triggers for business transformation.
The case study presented is the one of SAP's own integration of acquired BusinessObjects. The presenter was leading the worldwide PMO for the Day 1 PMI phase.

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Nicolas Schobinger | Business Transformation Academy - Post Merger Integration - Case Study from SAP

  1. 1. The Integration of BusinessObjects BTA – Spring 2012 Nicolas Schobinger / SVP / SAP Services / Global Strategy & Business Development May 11, 2012
  2. 2. ©  2012 SAP AG. All rights reserved. 2 Objectives & Agenda Objectives Ÿ  Share the experience integrating BusinessObjects – one of the biggest M&A in Tech Ÿ  Share how we dealt with not ideal processes and situations Ÿ  Share how “bold” and “consequent” can pay off – vs a “compromise” PMI Agenda Ÿ  Context Ÿ  Chronicles of the BusinessObjects acquisition Ÿ  Conclusions BTA Spring 2012 Theme
  3. 3. ©  2012 SAP AG. All rights reserved. 3 SAP is the world's leading business software company SAP today Ÿ  #1 in key Software segments Ÿ  176’000 customers Ÿ  24 Industries Ÿ  120 countries Ÿ  37 languages Ÿ  59’400 employees Ÿ  2’900 certified partners Ÿ  Revenues of €14b at 33% operating margina a for 2011, non-IFRS Source: sap.com, investors relations Services Consumer Industries Trading Industries Financial Services Process Manufacturing Discrete Manufacturing Public Services
  4. 4. ©  2012 SAP AG. All rights reserved. 4 The BusinessObjects acquisition BusinessObjects Ÿ  6.0 bUSD / 3.8 bEUR price-tag –  Portfolio centered on Analytics –  By then, 3rd largest deal in SW Ÿ  Public Tender in FR and US Ÿ  Sizeable in all aspects for SAP –  Number of employees, locations, lines of businesses, ... –  Installed base, revenues to protect, channel Ÿ  BusinessObjects grew through M&A SAP’s experience w/ M&A Ÿ  Typical SAP deal w/ avrg deal size factors smaller Ÿ  Typical SAP deal used not to be a public tender –  Squeeze-out process can pose problems Ÿ  Typical SAP deal used to be narrow in scope and IP driven Ÿ  Dedicated M&A-team, focused on pre-deal and IP –  But PMI recognized as an important, practice across SAP
  5. 5. ©  2012 SAP AG. All rights reserved. 5 ©  2011 SAP AG. All rights reserved. 1Internal Business Transformation Management Methodology (BTM²) BTM²: The big picture Enablement Program/Project Management Program Planning and Governance Program & Proj.-Integr. Mgmt Program & Project Scope Mgmt Program & Project Time & Cost Mgmt Program Quality Mgmt Program Human Resource Mgmt Program Procurement Mgmt Risk Management 360° Strategic Risk Assessment Deep dives for strategic risk areas Assess transformation business case Define risk strategy Risk Management Execution Risk Monitoring Identify additional improvement Risk Mgmt. as part of Board Governance Competence & Training Management Competence strategy Training need analysis As-is analysis Gap analysis Curriculum development Training preparation Training Evaluation & improvement Program Reporting Organizational Change Management Set-up & governance Stakeholder management Change agent network Communicatio n management Performance management - Project team Performance management - Business Change readiness assessment Change monitoring Processes Management Determine scope of analysis From template to bespoke inventory Identify improvements /add attributes Map selected processes Plan process implementatio n Implement processes Evaluate processes Establish CIP Value Management Baseline analysis Value estimation Detailed business case Agree ownership for realization Plan benefit realization Execute benefit realization Review and evaluate results Establish potentials for further benefits Meta Management Orchestration of individual disciplines: Guidelines, Leadership, Culture, Values and Communication IT Transformation Management Business and IT Capability Assessment To-be analysis Gap analysis IT roadmap plan Solution architecture design IT Deployment plan IT Operations & Service Optimization IT Lifecycle Management Strategy Management AS-ISData Collection Analysis of needs & maturity level Design business vision Design Business Model Integrated transformation plan Business Case Organizational model Risk analysis Direction ©  2012 SAP AG. All rights reserved. 7 Source: Ernst & Young; Deloitte Determinants of M&A success or failure Three key determinants along the M&A value chain Failure can occur anywhere in the process. Each phase of a M&A-Transaction contains hidden risks, which must be reduced by active M&A management. Pre-deal Deal Post-deal !  How to balance vision, strategic orientation and opportunistic behavior? !  How to ensure that the integration can achieve the increases in value which were expected when the decision was made? right candidate Choosing the 1 Robust justifications Developing 2 the deal Securing 3 Value creation & growth Ensuring 4 1 Consistency of the deal with the overall strategic purpose 3 Choice of integration approach and ability to integrate !  How to ensure that the decision-making process leads to the "right" decision? !  How to develop meaningful acquisition justifications despite pressures, un- certainties and merger inherent limitations (data, time, people involved ...)? 2 Quality of decision making (content and process) Central ‘Thesis’ out of the PMI of BusinessObjects Maximize the probability of achieving the desired outcome” Claim 1 ” Process and Methods as means to to deal with ambiguity” Claim 2 ” Ÿ  Address Critical Success Factors of M&A … Ÿ  … you went through, or others identified … Ÿ  … in a bold an consequent way Ÿ  Leverage Business Transformation .... Ÿ  … skills and methods … Ÿ  … applied to a ‘different’ context
  6. 6. ©  2012 SAP AG. All rights reserved. 6 BusinessObjects’ PMI chronicles Overview announcement cut-over 22 + 24 weeks Oct 7th 14 weeks day 1 Jan 21st Dec 31st Ÿ  Strategic Rationale Ÿ  Business Case Ÿ  Integration Approach Ÿ  Leadership, Mgmt, high level org Ÿ  Red flags Ÿ  Initiation & Design Ÿ  Staffing Ÿ  Agenda setting Ÿ  $ Ÿ  Operations Ÿ  Non-funding Ÿ  Topical coverage Ÿ  Scalability of program & methods Ÿ  Visibility & relevancy Ÿ  Strict PMO-focus on essential matters (Top 100, $, culture) Ÿ  Handover to line Ÿ  Mid-term planning & Budgeting Ÿ  BTrafo platforms and teams Phase I Phase II
  7. 7. ©  2012 SAP AG. All rights reserved. 7 BusinessObjects’ PMI chronicles Key Topics Ÿ  Post-engineer Pre-Deal justification –  Integration Approach, –  Synergies –  Retention approach Ÿ  Product roadmap Ÿ  Agonsticity, Customer retention Ÿ  GTM –  Coverage & assignment of customer base, segregated GTM –  Offers Ÿ  Arms lengths (corporate laws, minority stakeholders, tax) Ÿ  PMI Logistics –  Thanks Giving, Christmas Field Kick-off, Quarter close; PaloAlto – Walldorf –  Capacity –  Measure readiness & risks Phase I
  8. 8. ©  2012 SAP AG. All rights reserved. 8 BusinessObjects’ PMI chronicles Key Topics Phase Ÿ  Hand-over Phase I –  New leads –  New workstreams, delegate down, … Ÿ  Scale scope, methods, and accountability –  Maintain relevancy and visibility for decision making –  Workstream structure to allow for ‘business-led’ without slipping into business as usual –  TOP 100, Business Case & value tracking Ÿ  As usual – the unexpected and surprises –  Pricelist –  Forgotten customer segments/channels –  GTM defections –  Support models –  IT cutover –  P&L integration Phase II
  9. 9. ©  2012 SAP AG. All rights reserved. 9 Conclusion ©  2011 SAP AG. All rights reserved. 1Internal Business Transformation Management Methodology (BTM²) BTM²: The big picture Enablement Program/Project Management Program Planning and Governance Program & Proj.-Integr. Mgmt Program & Project Scope Mgmt Program & Project Time & Cost Mgmt Program Quality Mgmt Program Human Resource Mgmt Program Procurement Mgmt Risk Management 360° Strategic Risk Assessment Deep dives for strategic risk areas Assess transformation business case Define risk strategy Risk Management Execution Risk Monitoring Identify additional improvement Risk Mgmt. as part of Board Governance Competence & Training Management Competence strategy Training need analysis As-is analysis Gap analysis Curriculum development Training preparation Training Evaluation & improvement Program Reporting Organizational Change Management Set-up & governance Stakeholder management Change agent network Communicatio n management Performance management - Project team Performance management - Business Change readiness assessment Change monitoring Processes Management Determine scope of analysis From template to bespoke inventory Identify improvements /add attributes Map selected processes Plan process implementatio n Implement processes Evaluate processes Establish CIP Value Management Baseline analysis Value estimation Detailed business case Agree ownership for realization Plan benefit realization Execute benefit realization Review and evaluate results Establish potentials for further benefits Meta Management Orchestration of individual disciplines: Guidelines, Leadership, Culture, Values and Communication IT Transformation Management Business and IT Capability Assessment To-be analysis Gap analysis IT roadmap plan Solution architecture design IT Deployment plan IT Operations & Service Optimization IT Lifecycle Management Strategy Management AS-ISData Collection Analysis of needs & maturity level Design business vision Design Business Model Integrated transformation plan Business Case Organizational model Risk analysis Direction ©  2012 SAP AG. All rights reserved. 7 Source: Ernst & Young; Deloitte Determinants of M&A success or failure Three key determinants along the M&A value chain Failure can occur anywhere in the process. Each phase of a M&A-Transaction contains hidden risks, which must be reduced by active M&A management. Pre-deal Deal Post-deal !  How to balance vision, strategic orientation and opportunistic behavior? !  How to ensure that the integration can achieve the increases in value which were expected when the decision was made? right candidate Choosing the 1 Robust justifications Developing 2 the deal Securing 3 Value creation & growth Ensuring 4 1 Consistency of the deal with the overall strategic purpose 3 Choice of integration approach and ability to integrate !  How to ensure that the decision-making process leads to the "right" decision? !  How to develop meaningful acquisition justifications despite pressures, un- certainties and merger inherent limitations (data, time, people involved ...)? 2 Quality of decision making (content and process) Maximize the probability of achieving the desired outcome” Claim 1 ” Process and Methods as means to to deal with ambiguity” Claim 2 ” operational PMI community

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