Merging business systems, finances top struggles in M&A: Survey

Two areas most difficult to integrate and see the most mistakes
|hrreporter.com|Last Updated: 11/16/2016

The greatest pain points for companies going through a merger or acquisition are meshing technology and finances, according to a survey of 270 Canadian CFOs by Robert Half Management Resources survey.

"It is common for companies to focus on the business transaction and underestimate the complexities involved in integrating the operations after the fact," saidDavid King, Canadian president of Robert Half Management Resources. "Leaders must understand how merging new technologies and detailed financial controls may impact internal functions, and what needs to be done to lay the groundwork for a smooth and successful transition."

In a merger or acquisition, which part of the other company is most difficult to integrate?”

Business systems and technology

32%

Budgets and finances

31%

Employees and corporate culture

9%

Business models

5%

Real estate

1%

Don't know / no answer

22%


"In a merger or acquisition, in which area of the integration do companies make the most mistakes?"

Budgets and finances

40%

Business systems and technology

22%

Business models

11%

Employees and corporate culture

4%

Real estate

1%

Don't know / no answer

23%

It’s also important to acknowledge how big changes can take a toll on employee morale and retention, said King.

"Make sure teams are updated frequently, and emphasize an ongoing commitment to expanding their expertise by providing them the training and resources to excel within the new structure. Highlighting opportunities for development and career growth throughout the transition will ensure employees remain motivated, productive, and actively engaged in the innovative direction the business is going."

Robert Half provided seven tips to help managers during a merger and acquisition:

Give yourself a head start. The need for due diligence extends from the organizational to the managerial level. Identify skills gaps and technical issues to be addressed, such as challenges integrating financial systems and complying with regulatory mandates.

Create a unique workplace culture. Rather than forcing staff to adopt the values, beliefs and attitudes of one organization, establish a new vision everyone can get behind. Determine the steps needed to realize the goal, including how to communicate it to employees.

Make integration efforts an ongoing priority. Ups and downs are inevitable as two organizations become one, and change management must be a central focus. Conduct regular check-ins with staff throughout the transition and beyond to ensure processes, teams and goals are aligned.

Invest in professional development. Training on new business systems and processes should be a given, but also provide support in areas such as communication, adapting to change and teambuilding. These offerings can help teams get in sync and focus on common goals.

Maintain communication. Stay attuned to employees' workloads and concerns. Anticipate their stressors, and look for ways to help them navigate the transition. You may not be able to give them any guarantees, but staff should feel confident that you support them and will be a more reliable source of information than the rumour mill.

Tap all available internal resources. CFOs increasingly are partnering with their operations team and working with business development. Emphasize the need for this type of cross-functional collaboration during a merger. Your transition team should include colleagues from across the organization.

Bring in outside help. Companies rarely have all the merger expertise they need in-house. Work with experienced consultants who can help your firm navigate the transaction and ensure compliance with regulatory demands. Interim professionals can also step in to bridge skills gaps and handle projects for staff members who shift their focus to the merger.

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