EA for M&A: Mergers & Acquisitions Enterprise Architecture
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This document provides an overview of how enterprise architecture can be used to support mergers and acquisitions. It discusses why enterprise architecture is valuable for M&A, outlines some prerequisites like establishing reference models and governance, and how architecture can be deployed including using models for business and technology capabilities and assessments. Case studies from a mining and financial services group are also referenced. The presentation aims to demonstrate how architecture insights and analysis can inform M&A due diligence, target evaluation, and post-acquisition integration planning.
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EA for M&A: Mergers & Acquisitions Enterprise Architecture
- 2. Enterprise Architecture for Mergers & Acquisitions Andrew Swindell Enterprise Architect and Director of On a Page June 17th 2015 Slide 2
- 3. Biography • 25 years of expertise in Line Management roles in Sales & Marketing delivering CRM and Business Intelligence capabilities and deep Consulting Information Architecture experience; • Last 12 years as an Enterprise Architect building Architecture Practices and enabling business and technology strategies; • Roles in 26+ companies primarily in Banking, Mining, Utilities and Health Insurance industries with Domain expertise in Business, Applications and Information Architecture; • Top down whole of company, whole of country focus applying Enterprise and Solution Architecture disciplines across Australia and New Zealand; • Author of Architecture white papers, articles; Motivational Speakers Australia member;
- 5. EA for M&A Why Enterprise Architecture for Mergers & Acquisitions? Architecture Pre-requisites Deploying Enterprise Architecture for Mergers & Acquisitions • Key Models, Governance and Templates • Analysis and Impact Assessments • Deployment Insights and guidance Case Studies • Mining Group • Financial Services Group
- 6. Why EA for M&A? Value Statements • Positioning Architecture as a valuable contributor to delivering your Business Strategy; • Engaging key business and technology stakeholders on the organisation direction; • Supporting and influencing the investment spend i.e refined bids; • Important communicator of organisational DNA (target and acquirer), business value and supporting alignment within business units and alignment between business and technology functions; • Similar / consistent language being deployed leads to more efficient M&A bid process;
- 7. EA for M&A Why Enterprise Architecture for Mergers & Acquisitions? Architecture Pre-requisites Deploying Enterprise Architecture for Mergers & Acquisitions • Key Models, Governance and Templates • Analysis and Impact Assessments • Deployment Insights and guidance Case Studies • Mining Group • Financial Services Group
- 8. Architecture Pre Requisites Plan the maturing of your Architecture Capability Level 1 “Reliance on Experts” Level 2 “Common Language” Level 3 “Strategy Interpretation” Level 4 “Strategy Development” Solution Architectures None Poorly defined processes Reliance on Subject Matter Experts None or Various (non- integrated) Current State Architecture Modelling of defined “Solutions” Standards Publishing Common Architecture Framework Standard Model Types Architecture Services Defined Architecture Roles Defined Simple Modelling Tools Common Repository Target & Transition Architectures Program Alignment Reference Architecture Publishing Simple Reference Architectures Transparent Processes - Engagement, Decision Making, Delivery, etc. Measures Tools & Templates to enable processes Strategic Planning Business Consulting Richer Reference Architectures Business empowered to execute parts of the processes Process Automation Active Repositories Typical Services Framework Methodology Tools FocusofEnterpriseValue Solutions Domains Enterprise CustomerProposition ServiceDelivery Components Architecture Views Domains Solutions Enterprise Overall Context (Blueprint) Practices, Portfolio, Methods (Processes), Governance Principles DataBusiness Applications Technology Architecture Maturity Model Enterprise Architecture Framework Mergers & Acquisitions
- 9. Architecture Pre Requisites Establish an Internal and External EA orientation Slide 9 •Supporting Strategy and Planning Processes •Guiding Portfolio and Program Planning •Enabling Project Management and Delivery •Alignment with COBIT, ITIL, 3P, TOGAF, AGA etc Internal Enterprise Architecture External Enterprise Architecture •Positioning your Business Capability against peers •Engaging Board and Executive teams •Telling the organisational story •Mergers and Acquisitions
- 10. Architecture Pre Requisites External EA orientation focus on M&A Business Strategy Slide 10 Reference Models • Business Capability Model • Infrastructure Reference Model • Applications Reference Model • Business or Technology Organization Model • Enterprise Data Model Governance Strength • Architecture Principles • M&A Architecture Principles • Architecture Governance • Architecture Owner M&A Tools and Templates • Discovery / Due Diligence checklists • Application Risks • Infrastructure / Application Risks • Integration Risks • 100 day Integration Plan Existing Acquired
- 11. Architecture Pre Requisites Reference Models – Your Architecture toolkit Slide 11 Business Function Framework 4. Channel 4.4 Assisted 4.4.2 Call Centre 4.4.1 Branch 4.4.3 Mobile Banker 4.4.6 Postal Mail 4.4.7 Email 4.5 Unassisted 4.5.1 ATM 4.5.2 POS 4.5.5 Mobile 4.5.3 Web 4.5.4 IVR 4.4.8 Fax 4.5.6 Data Exchange 4.4.4 Broker 4.5.7 Thick Client 4.4.5 Relationship Mgr 2. Customer 2.2 Customer Relationship Management 2.3 Customer Information Management 2.4 Customer Analytics 1. Product 1.1 Retail & Personal 1.1.2 Credit Cards 1.1.4 Mortgages1.1.1 Deposits 1.1.6 Merchant Services 1.1.5 Loans 1.1.3 Leasing 3. Operations 1.4 Insurance1.3 Wealth Management 1.3.3 Funds 1.3.4 Asset Management 1.3.2 Structured Products 1.4.1 Life 1.4.2 General, Travel 1.4.3 Business 1.4.4 Credit 1.3.1 Platforms 1.2 Institutional 1.2.1 Cash Management 1.2.3 Trade Finance 1.2.4 Corp Finance 1.2.8 Capital Markets 1.2.5 Nostro Accounts 1.2.7 Markets (e.g. FX)1.2.2 Leasing 1.2.6 Lock Box 1.2.9 Custody 3.1 Product Administration 3.1.4 Decisioning3.1.1 Origination 3.1.2 Fulfilment 3.1.5 Credit Mgmt 3.2 Transaction Management 3.2.3 Securitisation 3.2.6 Settlement 3.1.6 Claims3.1.3 Underwriting 3.2.4 Reconcilliation 3.2.2 Trading 3.2.5 Clearing 3.2.1 Payments 4.1PartnerIntegration&Management 4.2 Sales 4.3 Servicing 4.3.4 Statements 4.3.6 Alerts 4.3.2 Query Resolution 4.2.3 Advice 4.2.2 Quotation 4.2.1 Needs Analysis 5. Corporate & Shared Services5.1 Finance & Accounting 5.1.1 Accounting (G/L) 5.1.2 Collections & Disbursments 5.2 Human Resources 5.6 Risk 5.1.3 Treasury 5.1.5 Capital Mgmt 5.2.1 Payroll 5.2.4 Learning & Development 5.2.5 Occupational Health & Safety 5.2.2 People Mgmt 5.3 Corporate Affairs 5.3.1 Public Relations 5.3.2 Corporate Responsibility 5.3.3 Govt & Regulatory Affairs 5.4 Corporate Services 5.4.1 Procurement 5.4.3 Facilities Mgmt 5.9 Marketing & Communications 5.7 Strategy & Market Analysis 1.5 Product Management 5.1.4 Taxation 5.2.3 Incentive Mgmt 5.4.4 Asset Mgmt 5.8 Project Delivery & Governance 5.4.2 Supplier Mgmt 5.6.3 Audit 5.6.4 Risk Management 5.6.5 Modelling & Forecasting 5.6.2 Fraud Detection 5.10 Technology & Operations Support 5.11 Enterprise Services 5.11.1 Management Information 5.11.2 Productivity 5.11.3 Collaboration 5.6.1 Security 5.11.4 Knowledge Mgmt 1.5.1 Aggregation & Bundling 1.5.3 Performance Management 1.5.2 Lifecycle Management 4.3.3 Account Servicing 4.2.4 Leads Mgmt 4.3.1 Contact Capture (inc imaging, call recording) 2.1 Contact Management (inc registration, workflow) 4.3.5 Advices 5.5 Legal 5.5.1 Compliance 5.5.4 Dispute Resolution 5.5.5 Records Mgmt 5.5.3 Advice 5.5.2 AML Project Leadership SDA & Delivery Governance Signalling, Train Ctrl & Comms IS Systems & Scheduling Automation & Asset Systems Concept of Operations Workstream Coordination Project Services Conceptual / Strategic / Whole of Business Logical / Tactical / Whole of Division / Portfolio Business Capability model provides a script for interrogating your target company and completing a high level assessment of the target environment capabilities and level of integration risk Information Technology Reference Model - High level IT capability assessment Infrastructure Reference Model - High level Infrastructure assessment Application Reference Model - High level Application platform assessment Organisation Chart for Business and Technology Divisions - High level People / FTE / Cost assessment **A wide range of data can be modelled including RAG ratings, specific insights, FTE’s, costs, and risks. Model use is primarily as a holistic overview to drive out patterns, areas of interest or capabilities that may need more detailed investigation.
- 12. EA for M&A Why Enterprise Architecture for Mergers & Acquisitions? Architecture Pre-requisites Deploying Enterprise Architecture for Mergers & Acquisitions • Key Models, Governance and Templates • Analysis and Impact Assessments • Deployment Insights and guidance Case Studies • Mining Group • Financial Services Group
- 13. Deploying Architecture Capability Architecture process support for M&A activities Slide 13 • Central Architecture owner – cover Business and Technology Domains and co-ordinate Architecture activities with Due Diligence and Integration teams; • Architecture team - compare platforms between current environment and target entity; • Collate data inputs - Business, Applications, Data, Integration, Infrastructure, Technology Services, Security and Change Management inputs. Holistic view established and compare logically across all environments; • Manage data inputs – categorize and analyse to create insights, provide overview of target entity for Due Diligence and Integration teams - within 1-2 weeks; • Agree future state architecture - allows the acquiring company to be proactive and gain greater confidence in insights provided;
- 14. Deploying Architecture M&A Business Strategy - Business Capabilities to Outcomes Slide 14 StrategicPriorities Efficient Business Support Effective Cross Selling Superior Customer Retention Customer Knowledge Excellent Customer Servicing Fast & Efficient Origination Business Outcomes Front Office Capabilites Back Office Capabilities Supporting Capabilities (Applications and Infrastructure) Architecture Governance Project, Programme and Portfolio Management IT Asset Management Supportable Enterprise Systems and Technology Workforce and Workplace Management Multi Channel Sales Management Information Security Agile Product Packaging / Pricing Workflow Enterprise Data Model and Standards Super Regional Banking Platform Systems and Technology Customer Analytics Document Management and Imaging Contact Event Management Enterprise Customer Master/ ODS Information Lifecycle Mgmt and Warehousing Integration MessagingStraight Through Processing Consolidated Customer View Multi Channel Visibility and Servicing (Assisted & Unassisted) EnterpriseDataManagement 1 2 3 4 5 6 1. Distinguish critical capabilities to achieving your strategic objectives; 2. Establish company fit i.e which acquisition opportunity provides the best capabilities and at what price; 3. Capability to Outcome mapping with Strategic Objectives prioritised; 4. Key capabilities mapped in support of the highest priority outcomes;
- 15. Deploying Architecture M&A Business Perspective - Business Capability Model Slide 15 • Business Capability Model is one of the easier models to deploy in an M&A setting; • Ability to create subjective assessments of business capability in the Acquiring and Target Company; • Model deployed as a quick agile RAG rating (Red, Amber, Green) assessment of capability upfront; • Can be used to represent all the data inputs available on the target company at the end of a due diligence exercise; Business Capability Model Channel Assisted Call Centre Branch Mobile Banker Postal Mail Email Unassisted ATM POS Mobile Web IVR Fax Data Exchange Broker Thick Client Adviser Customer Customer Relationship Management Contact Management (inc registration, workflow) Customer Information Management Contact Capture (inc imaging, call recording) Customer Analytics Product Retail & Personal Credit Cards MortgagesDeposits Merchant Services Loans Leasing Operations InsuranceWealth Management Funds Asset Management Structured Products Life General, Travel Business Credit Platforms Institutional Cash Management Trade Finance Corp Finance Capital Markets Nostro Accounts Markets (e.g. FX)Leasing Lock Box Custody Product Administration DecisioningOrigination Fulfilment Credit Mgmt Transaction Management Securitisation Settlement ClaimsUnderwriting Reconcilliation Trading Clearing Payments Account Servicing PartnerIntegration&Management Sales Servicing Statements Alerts Query? Requests? Transacting? Campaigns? Leads Mgmt? Advice Quotation Needs Analysis Corporate & Shared ServicesFinance & Accounting Accounting (G/L) Collections & Disbursments Human Resources Risk Treasury Capital Mgmt Payroll Learning & Development Occupational Health & Safety People Mgmt Corporate Affairs Public Relations Corporate Responsibility Govt & Regulatory Affairs Corporate Services Procurement Facilities Mgmt Marketing & Communications Strategy & Market Analysis Product Management Taxation Incentive Mgmt Asset Mgmt Project Delivery & Governance Supplier Mgmt Legal Audit Compliance Risk Management Modelling & Forecasting Dispute Resolution Fraud Detection Records Management Advice Technology & Operations Support Enterprise Services Management Information Productivity Collaboration Security Knowledge Mgmt Aggregation & Bundling Performance Management Lifecycle Management
- 16. Deploying Architecture M&A Technology Perspective - Application and Infrastructure Slide 16 • Application and Infrastructure model provide script for interrogating target company environment; • Knowledge of current and target platforms enables gaps, overlaps and impact assessments; • Integration costs for Infrastructure platforms are significant; Review SLA’s; • Key platforms such as ERP, CRM, Supply Chain and Product Development provide integration requirements and insights • Use filters such as RAG ratings, current projects, costs and standard platforms; Business Function Framework 4. Channel 4.4 Assisted 4.4.2 Call Centre 4.4.1 Branch 4.4.3 Mobile Banker 4.4.6 Postal Mail 4.4.7 Email 4.5 Unassisted 4.5.1 ATM 4.5.2 POS 4.5.5 Mobile 4.5.3 Web 4.5.4 IVR 4.4.8 Fax 4.5.6 Data Exchange 4.4.4 Broker 4.5.7 Thick Client 4.4.5 Relationship Mgr 2. Customer 2.2 Customer Relationship Management 2.3 Customer Information Management 2.4 Customer Analytics 1. Product 1.1 Retail & Personal 1.1.2 Credit Cards 1.1.4 Mortgages1.1.1 Deposits 1.1.6 Merchant Services 1.1.5 Loans 1.1.3 Leasing 3. Operations 1.4 Insurance1.3 Wealth Management 1.3.3 Funds 1.3.4 Asset Management 1.3.2 Structured Products 1.4.1 Life 1.4.2 General, Travel 1.4.3 Business 1.4.4 Credit 1.3.1 Platforms 1.2 Institutional 1.2.1 Cash Management 1.2.3 Trade Finance 1.2.4 Corp Finance 1.2.8 Capital Markets 1.2.5 Nostro Accounts 1.2.7 Markets (e.g. FX)1.2.2 Leasing 1.2.6 Lock Box 1.2.9 Custody 3.1 Product Administration 3.1.4 Decisioning3.1.1 Origination 3.1.2 Fulfilment 3.1.5 Credit Mgmt 3.2 Transaction Management 3.2.3 Securitisation 3.2.6 Settlement 3.1.6 Claims3.1.3 Underwriting 3.2.4 Reconcilliation 3.2.2 Trading 3.2.5 Clearing 3.2.1 Payments 4.1PartnerIntegration&Management 4.2 Sales 4.3 Servicing 4.3.4 Statements 4.3.6 Alerts 4.3.2 Query Resolution 4.2.3 Advice 4.2.2 Quotation 4.2.1 Needs Analysis 5. Corporate & Shared Services5.1 Finance & Accounting 5.1.1 Accounting (G/L) 5.1.2 Collections & Disbursments 5.2 Human Resources 5.6 Risk 5.1.3 Treasury 5.1.5 Capital Mgmt 5.2.1 Payroll 5.2.4 Learning & Development 5.2.5 Occupational Health & Safety 5.2.2 People Mgmt 5.3 Corporate Affairs 5.3.1 Public Relations 5.3.2 Corporate Responsibility 5.3.3 Govt & Regulatory Affairs 5.4 Corporate Services 5.4.1 Procurement 5.4.3 Facilities Mgmt 5.9 Marketing & Communications 5.7 Strategy & Market Analysis 1.5 Product Management 5.1.4 Taxation 5.2.3 Incentive Mgmt 5.4.4 Asset Mgmt 5.8 Project Delivery & Governance 5.4.2 Supplier Mgmt 5.6.3 Audit 5.6.4 Risk Management 5.6.5 Modelling & Forecasting 5.6.2 Fraud Detection 5.10 Technology & Operations Support 5.11 Enterprise Services 5.11.1 Management Information 5.11.2 Productivity 5.11.3 Collaboration 5.6.1 Security 5.11.4 Knowledge Mgmt 1.5.1 Aggregation & Bundling 1.5.3 Performance Management 1.5.2 Lifecycle Management 4.3.3 Account Servicing 4.2.4 Leads Mgmt 4.3.1 Contact Capture (inc imaging, call recording) 2.1 Contact Management (inc registration, workflow) 4.3.5 Advices 5.5 Legal 5.5.1 Compliance 5.5.4 Dispute Resolution 5.5.5 Records Mgmt 5.5.3 Advice 5.5.2 AML
- 17. Deploying Architecture M&A Technology Operating Model perspective Slide 17 • Fast track review of organizational structures, FTE’s, Technology Services being acquired, cost base and integration risks inherent in the target company; • Gap assessments fall out once you have a good understanding of both environments; • Some Information Technology teams have stronger skill sets in key areas i.e Cloud, Digital, BI etc;
- 18. EA for M&A Why Enterprise Architecture for Mergers & Acquisitions? Architecture Pre-requisites Deploying Enterprise Architecture for Mergers & Acquisitions • Key Models, Governance and Templates • Analysis and Impact Assessments • Deployment Insights and guidance Case Studies • Mining Group • Financial Services Group
- 19. Case Study Technology Division Perspective Slide 19 Information Technology Reference Model – Acquiring Technology Capability • A Mining company was about to acquire a new company and mines portfolio and needed to quickly understand the key technology capabilities that would be acquired and platforms to be integrated; • Bid team used a number of checklists and Reference Models (Functional Model, Infrastructure and Applications Reference Model) to plot the key platforms and insights; • Enabled a high level 100 day integration plan to be established within a short time frame and further research to be prioritized on key integration streams; • Using the Information Technology Reference Model outlined the key Technology platforms and enabled team to undertake RAG ratings, Risk profile, FTE, Cost, Skill Sets analysis and provide a script for resource / technology capability discussions; • Successful completion of Acquisition with 100 day integration plan and benefits realised over ensuing 18mths;
- 20. Case Study Business Capability Reference Model – Use Case Slide 20 Financial Services Group – getting bigger quickly • Financial Services company business strategy wanted to get bigger quickly with many consolidation opportunities available in the market at the right price; • Business and Technology Bid team deployed Architecture Reference models to position target companies against own capability. Working with CEO and CIO, identified what questions to ask of target companies; • Using the Architecture models enabled a plotting of: – Which companies provide the best bang for buck; – Which companies could support the longer term objectives and outcomes; – Which companies had the customer base, services, the technology platforms, the skill sets required; – What integration issues existed and what bid price represented fair value; • The company went on to acquire 23 companies over a 4.5 year period and achieve its business objectives of growth and scale;
- 21. Final Say on EA for M&A Slide 21 • Architecture function enables M&A process and reinforces the value to CIO, CEO and Executive Team that Architecture can support an organization’s business strategy; • Simple Architecture models on a page can be tailored to specific audiences and provide a script and a picture that is clearly understood; • Architecture success factors for M&A include a mature EA function / framework, clear representation of organizational assets and acceptance by the CEO and Integration team of the value to be delivered; • Architecture Methodology agnostic – draw from all of them to present your Architecture Value; • Aligned Architecture teams who consolidate views within your organization can achieve good governance outcomes and engaged sponsors / stakeholders;
- 22. Thank You and Questions Slide 22