Merger Integration

A Fortune 500 tech company needed program management expertise to help integrate a multi-billion-dollar acquisition. This included on-boarding acquired employees in various sites in Asia, Europe and the Americas, transferring new customers to the acquirer’s ERP systems, moving to the acquirer’s supply chain and winding down legal entities no longer needed.

Artizen was chosen to complete all four integrations.

Site Integrations. Due to the size of the acquisition, the client decided to on-board the domestic and international locations gradually, country by country. The Artizen program manager assisted in overall site integration planning and managed the international, cross-functional team to complete each site integration on schedule. Site integrations included all activities regarding employee on-boarding—payroll, benefits and training (on client-specific tools for procurement, employee self-help and more).

The Artizen program manager also recommended conducting cost-benefit analyses to clarify the economics of automating benefits, which varied from country to country, in Oracle HRMS. The analyses gave decision-makers the insight they needed to create cost-effective levels of automation and to eliminate excessive automation of ERP systems.

The results were positive indeed—one site integration, for example, was completed 50 per cent faster and at lower final cost than initially planned.

Customer Transitioning. Sales and purchase agreements required renegotiation to meet the client’s policy and be written on the client’s contracts. Various customers needed to transition from direct to indirect, becoming customers using channel partners. In addition, EDI and other messaging solutions required review as part of the selection of the most appropriate technology.

The Artizen program manager led various sub-teams to achieve the integration objectives and to maximize customer satisfaction. As liaison to senior executive management, the manager consulted with decision makers so that roadblocks were removed and the program was prioritized appropriately.

Supply Chain Transitioning. The client’s supply chain model outsourced all product manufacturing to contract manufacturers. But the acquired company used in-house manufacturing. Furthermore, the client’s business model called for highly configurable products, while the acquired company built products to stock. To transition the acquired company to the client’s supply chain model, the Artizen program manager became deeply involved in the process review and design, ensuring that all finance aspects were addressed and providing both profound domain expertise and program management skills.

Legal Entity Transitioning. The acquired company came with more than 40 legal entities worldwide that were no longer needed. The Artizen manager led the program team that unwound them. The team included representatives from legal, accounting, finance, tax and treasury, as well as outside advisors such as accounting firms, local tax advisors and auditors. Sub-teams were formed as needed in Europe, Asia, and the Americas. Over a period of 2.5 years, 35 entities were merged, liquidated, or de-registered, far exceeding management expectations and setting standards for other groups within the client organization. Best practices, checklists and guidelines were developed to document the process in order to streamline future efforts. The cash savings (costs for accountants, auditors, legal, mandatory office space, bank accounts and more) from the legal entity transitions accumulated to an annual amount of more than $2 million. Comparing the costs of running this program to the savings generated, the client’s average payback period was six months.