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The Importance of Integrating Key Business Processes During M&A Author: Robert Gothan, CEO and founder of Accountagility – the leading business process management specialist.

Step by step The first step in any integration project is to thoroughly review the core business areas for both firms, including any critical processes, user spreadsheets, documentation, and the amount of time currently spent running each database. Manual processes are often time-consuming and error prone, so where possible they should be automated for a more effective and streamlined process.

The integration of different business systems can be an extremely complex process, especially when two different companies merge into one. To avoid the need to untangle errors and amend systems further down the line, organisations entering into M&A activity must therefore take steps to understand how to integrate key processes early on. When businesses merge, data from different systems and spreadsheets is often patched together, with personnel aiming to match up pieces that do not fit. It is often assumed that systems are similar and can be easily assimilated, or that diverse systems can be bodged together and expected to work efficiently. Unfortunately this is not the case, and companies often find themselves with complex systems that lack transparency, which causes reporting and procedural headaches in future.

In addition, where processes have previously been completed manually, a review of due diligence will be in order, with auditing and testing of systems taking place to detect any past errors before they are merged with new systems or automated. Risk levels are likely to have been considered in the initial stages of any M&A activity, but there must be a further review of risk at the point of system integration. Firms will then be able to understand exactly what process risks they are taking on, as well as which can be avoided and which can be automated.

Process integration Whilst it is tempting to make process integration as quick as possible when acquiring or merging with another firm, this is actually a vital task that needs to be dealt with methodically and with great care. Before any M&A activity begins, organisations should take the time to analyse how well individual systems are working – and check for any hiccups – since this is an ideal opportunity to examine these systems and reflect on how current process can be bettered.

This is the stage in which firms can begin to dig deeper into their reporting processes. Spreadsheet mapping should also be carefully reviewed, as it will provide key insights into how each business operates, and how end results are being calculated. Organisations should also consider how their data is being gathered, from which systems, and whether the same data is being used in different ways to compile a report. Armed with this information, firms will be able to decide how their data needs to be stored, aggregated and presented moving forward, based on insights gained from the review process.

This approach also gives both sides the opportunity to compare their systems to those of the other company, so that they can identify where the challenges are for each, and detect which systems are experiencing any issues most efficiently. As part of this process, the teams managing integration must ask themselves if any of the common problems they encounter are solved by either organisation, and then carefully select the best of both systems. This evaluation phase also provides the chance for firms to tighten up on regulatory and compliance issues by recognising different levels of risk and deciding what procedures need to be implemented to fill any gaps.

Unlocking value System integration should be seen as an opportunity to unlock value and adopt best practice during M&A activity. If handled intelligently, mergers and takeovers can allow firms to review their existing processes and those of the other party, signalling areas for improvement and automation. Not only will this approach help to increase efficiency, but it will also minimise risk points for the resulting entity.


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Wealth & Finance August  

Wealth & Finance August