When M&A transactions close the deal could be complete, but if businesses fail to begin post-closing integration in a timely manner, they miss out on a significant value. As with all M&A activities that involve merger acquisition, this one is the most challenging and time-consuming to execute. A solid team that is well-functioning along with clear communication and a solid plan are crucial to ensure success.
Pre-integration planning can prevent many of the issues that companies encounter when integrating. For example when integrating systems, it is http://www.virtualdataroomservices.info/effective-information-technology-ma-integration-strategy/ important to take careful consideration of data ownership as well as process synchronization issues. Also, IT solutions need be planned early to enable the new unified company to rapidly reap the benefits. Planning should begin with due diligence, and the PMI Framework should be completed before the deal is closed. Furthermore, the crucial element to success in PMI is identifying and tracking important integration milestones to monitor progress and concentrate on the intended outcomes of the deal.
A common mistake made in integration is to integrate too much, devaluing value by fundamentally altering aspects of the acquired company that made it attractive initially. Similarly, acquiring companies sometimes underestimate the length of time it takes to successfully integrate a company acquired.
Another common error is not evaluating the norms and culture in sufficient detail. For example, if the culture of two firms are very different, there will be clashes. To avoid problems the acquirer can start assessing the company during the due diligence process by bringing in some important people from the target company to evaluate their culture and work habits. This is a helpful method of predicting the type of integration strategies which will be required after the deal has been concluded.