Acquisitions, reporting, analysis and success
A merger or acquisition ushers in a period of rapid organizational change, putting exceptional stress on a company’s decision-making functions. Optimal success in the new environment depends critically upon excellent implementation and on the ability of upper- and middle- managers to make many finely-tuned business decisions. Client relations, product management, marketing, staffing, financial reporting â€“ every area of the business needs to be thought anew, taking into account the total situation of the new, combined enterprise.
Unfortunately, it is often precisely at this moment that reliable information for decision-making becomes exquisitely difficult to obtain.
Information for decision-making typically combines data from many parts of the enterprise, requiring accurate measures and valid comparisons. But nothing can be taken for granted in a merged entity.
- Account codes are typically different â€“ and so are the definitions of their meanings.
- Organizational divisions may have different bases, and products may be organized differently.
- Longitudinal (time-based) comparisons and trends become difficult to derive because everything changes pre-merger and post-merger. And in cases where the merger has triggered development of a new, third system, information for a single trend line may require data from a new system as well as multiple legacy systems.
Pre-merger, companies typically do business very differently, using different software packages â€“ SAP, BPIX, Lawson etc. â€“ or sometimes the same software package implemented differently.
Many software packages require programmer support â€“ or at a minimum, power user involvement â€“ to produce required reports or ad hoc queries. Getting a unified set of data to answer a simple question can require two different sets of experts â€“ and a well-qualified analyst who can intelligently merge the information. In some cases, even within the same package, information must be merged from more than one module. For example, to get a complete picture of customer activity in SAP, post-invoicing information from CO/PA may need to be merged with order information from LIS.
Technical expertise becomes scarce, because IT departments must merge disparate systems and are often deeply involved in operational issues. The new business must be able to handle its bread and butter transactions in a unified way very quickly, and this is not a trivial technical challenge.
With these formidable obstacles, it is not surprising that reporting and analysis problems can fester for a long time despite the best efforts of capable staff.
Of course, even in pre-merger times, many companies may not have very strong decision support systems. Often necessary calculations are done in a labor-intensive, ad-hoc way. Analytical functions are sometimes performed with nothing more than user-designed spreadsheet models. But problems are further exacerbated post-merger, and the result is often a series of heroic efforts to perform needed ad-hoc analyses, one after the other.
Much of what is needed may ultimately be provided by a well-designed data warehouse like SAP BW, but developing such a warehouse tends to take a long time to implement, even in stable business environments.
Analysts can thus find themselves in a difficult position after a merger or acquisition. What they need are flexible, easy-to-implement and easy-to-use decision support systems with sufficient capacity to accommodate enterprise-scale data.
Fortunately there are methods and tools available that can help companies address these needs independent of the implementation of a data warehouse. These tools allow the creation of smaller â€œdata martsâ€ which can address large domains of business questions. Such â€œmartsâ€ can be implemented far more cheaply and quickly than a comprehensive warehouse. They do not require waiting for enterprise systems to be re-architected and, if properly implemented they serve as a valuable source of design and experience if and when the time comes for a full warehouse project.
After the acquisition
Like any organizational matter, the issues involved in reporting and analysis are best handled early, rather than when they become a crisis. Vector Space has worked on some of the largest merger and acquisition events, and has had hands-on experience with analysis and reporting in the merger environment. In the course of our practice we have developed methodologies for handling the unique challenges of this situation and we are familiar with a wide range of technologies that can be used to provide analytical solutions..
Vector Space’s cost-effective solutions can achieve multiple goals in a surprisingly short time. We can:
- Provide uniform reporting across the enterprise using data from systems that already exist
- Allow interactive reporting, analytics and (optionally) data mining with little if any expert assistance;
- Subject to security, provide a very easy-to-use interface allowing shared access to enterprise data from usersâ€™ spreadsheets;
- Transparently switch data sources to a new enterprise-wide system when it is available;
- Provide a variety of functions which ERP systems alone can not provide, delivering needed functionality after they come live.
Vector Space offers various levels of service for such a project, depending on the client’s needs. Some prefer to use our services to guide, train and mentor their own staff, which then does most of the necessary work themselves. Others prefer to use our staff to supplement their in-house capabilities.
In some cases, our clients who ask us to implement systems using only consulting resources, leaving their staff free for other tasks.
Whatever the client’s need, Vector Space’s experience and solutions can make the post-merger transition smoother.