Successful Post Merger Integration (PMI) using Digital Solutions

Successful Post Merger Integration (PMI) using Digital Solutions

• 1.
  Achieving success withPost Merger Integration (PMI) using Digital solutions FEBRUARY 2016 SUDHIR SWAMY
• 2.
  Contents  State ofPMI in 2015  Key issues with PMI  Benefits of using digital solutions in PMI  Examples of companies leveraging digital tools for PMI  Case studies  Key Conclusions  Recommendations 2
• 3.
  State of PMIin 2015 Deloitte survey findings 3 Source: Integration Report 2015 Putting the pieces together), Deloitte
• 4.
  People, collaboration andcommunication present key challenges to successful PMI… 4 Source: M&A 2.0 - Avinash Jhangiani (2012)
• 5.
  Digital enablers andtools can help meet the challenges and maximize the benefits of M&A 5 Source: M&A 2.0 - Avinash Jhangiani (2012)
• 6.
  Companies have leverageddigital tools to driver successful mergers, in the past… # M&A instance Sector/ Geography Year Digital tools used for PMI Target audience 1 Symantec and Veritas Technology/ US 2005 Web based app – ‘Applause’ to retain staff Internal 2 Wachovia and Wells Fargo Bank Financial Services/ US 2009 Social Media – Blogs, Twitter Analytics – for IT integration Internal and external 3 Cisco and Pari Networks Technology/ US 2011 Wikis and Digital collaborative tools Internal 4 American Airlines and US Airways Airlines/ US 2013 Social media – Facebook, Twitter and YouTube External 5 Schneider Electric and Invensys Energy/ Europe 2014 Websites, web ads, Social media – Blogs, Twitter Internal and external 6 Anthem and Cigna Health Insurance/ US 2015 Combined website External 7 Aetna and Humana Health Insurance/ US 2015 Combined website Internal and external 8 Trinity Health Healthcare/ US 2006- 2011 Digital platform – back-end Internal 9 Cigna, Atos, Newell- Rubbermaid Multiple - Analytics – Social Network Analysis Internal 6 Source: Internet research
• 7.
  PMI Case studies 7
• 8.
  ‘Applause’ to engage Symantecand Veritas  Symantec acquired Veritas Software in 2005  Staff more than doubled from 6,500 to 14,000  Talented staff started getting offers from other Silicon Valley competitors  Symantec introduced Applause that year to boost employee recognition and target its top 15% performers  Using Applause, Symantec staff can congratulate colleagues who go beyond their job description (in a good way) or introduce novel ideas.  In 2011, 81% of Symantec’s staff received some monetary award through Applause. Source: http://fortune.com/2012/01/26/a-digital-pat-on-the-back-from-the-boss-whats-it-worth/ 8
• 9.
  Customers ‘join theconversation’ Wells Fargo Bank and Wachovia  Wells Fargo acquired Wachovia in 2009 with integration expected to take three years  Wells Fargo became a banking industry pioneer in the use of social media with the launch of a new blog in Jan 2009  Objective of the blog was to keep customers up-to-speed with progress on its merger with Wachovia  Five team members of the integration team including the CEO, John Stumpf, were key contributors to the blog  Wachovia already had a presence on Twitter and used it to promote the blog  Wachovia customers responded with a number of questions about the transition  To ensure an improved online experience for customers, the integration team used predictive analytics to determine whether existing systems could support added traffic and then laid the foundation for the plan ahead  Wells Fargo pulled off probably the largest bank integration of all time. The team successfully completed the work just a few months after the three-year anniversary of the acquisition. Source: http://www.finextra.com/blogs/fullblog.aspx?blogid=2319, http://www.banktech.com/management-strategies/the-wellsfargovia-blog-social-media-meets-merger-communications/d/d-id/1292533? "Here we'll share news and information, and you can "join the conversation" and let us know along the way how we're doing and what we can do better to make the transition as smooth as possible.“ – John Stumpf, CEO, Wells Fargo (2 January 2009) 9
• 10.
  Collaborate to integrate CiscoSystems and Pari Networks  Cisco acquired Pari Networks in 2011. Pari solutions are used in the Cisco Smart Services offering  After the acquisition, Pari employees in San Jose and India joined the Cisco Services business unit  Cisco IT needed to execute the work stream based integration plan within 30 days  Digital collaborative solutions were identified for the specific challenges of supporting Pari's India office – Cisco Telepresence, Cisco WebEx online meetings, Cisco WebEx Connect and Cisco AnyConnect VPN client  Specifically, the integration team achieved the following goals:  Employee orientation sessions were held on the first day after the deal closed.  The move to the Cisco Bangalore office was completed on time.  Pari employees joined Cisco Services and were productive immediately.  Integration was completed in 30 days Source: Integrating a Corporate Acquisition, http://cisco.com "From the start of the first day, we had everything we needed to begin working as Cisco employees, " Kishore Kumar, director of engineering, Cisco and former CEO, Pari Networks. 10
• 11.
  Combining energies fora ‘bright future’ Schneider Electric and Invensys  French Energy giant Schneider Electric acquired British FTSE 100 company, Invensys plc, in Jan 2014 thus expanding its product offering to the field of Control Systems, Software and Services.  In Sep 2014, Schneider launched the “better together” campaign, which was later renamed “ bright industrial future.” The objective was to address FUD and generate excitement amongst existing and potential customers  The campaign included a series of web ads and a video. All digital assets included a call to action driving users to the external landing page, which resulted in 50K additional unique visitors.  Schneider also ran an Employee social media competition - #BetterTogetherSE- to engage people and help spread the word.  Employees were encouraged to “Use your personal twitter account to show us what Better Together means to you”  The campaign resulted in Euro 20,000+ donation for Habitat for Humanity. Employees from 24 countries participated and there was a significant increase of brand association after 90 days from campaign launch Source: Better Together: marketing lessons from a major acquisition, https://www.behance.net/gallery/24770589/Invensys 11 “You are all doing a great job at integrating Invensys with Schneider and as a customer I feel very motivated and excited for the future with this new company.” Customer Quote
• 12.
  Promising ‘Better HealthcareTogether’ Anthem and Cigna  Healthcare insurer, Anthem’s offered to purchase its rival, Cigna, for USD 54 billion in mid-2015  Shareholder approval came in December 2015. However, regulatory approval is pending  The stated priority of the merger is to leverage scale to provide consumers access to affordable health coverage  Soon after, Anthem and Cigna launched a website www.betterhealthcaretogether.com  The site is targeted at external stakeholders including consumers, employers, policymakers, providers, investors and brokers  Apart from providing FAQs and outlining the benefits to stakeholders, the site also tracks market commentary and digital media coverage, which endorses the merger  Stakeholders can also sign up for regular updates via email. 12 Source: www.betterhealthcaretogether.com
• 13.
  Key conclusions  Howpeople from two organizations communicate and collaborate with each other can greatly impact the outcome of a merger  Consistent and planned use of digital tools such as social media, web 2.0, communities, analytics, cloud and collaborative technology, can help maximize benefits of M&A to the business  Benefits of using digital tools are many, including targeted information sharing, personalization, higher audience engagement, faster and better collaboration  Companies across sectors have used an array of digital tools to drive successful PMI programs targeted at internal and external stakeholders  Opportunities to learn from past experiences exist when developing a PMI plan 13
• 14.
  Recommendations on aligningdigital strategy to key PMI outcomes 14 Key PMI Outcomes Synergy and value capture Readiness Integration organization Communication and culture The goal of capturing synergies is to create value—improve operating margins, enhance the balance sheet, and provide shareholder value. In post-merger scenarios, the parties bring different operational, cultural and organizational differences that managers must be prepared to affront Companies prepare for mergers by setting up a post-integration leadership team consisting of cross- functional members. A well rehearsed communications plan is key in PMI: reaching both internal and external stakeholders Digital strategy Analytical support Leverage knowledge and learning Enable collaboration Connect to engage Use tools to simulate & analyze scale, complexity, and resources, needed to successfully integrate and realize expected synergies. Provide access to tools that help consolidate information from people, networks, and document repositories Provide tools and technology to enable seamless team communication and collaboration, globally Develop and disseminate content to align with the objective and stakeholder. Monitor outcomes Digital tools and enablers (not exhaustive) • Big data and Business Intelligence • Predictive Analytics • Online surveys • Wikis • Web-based communities • Social networking • Messengers • Audio/Video conferencing • Websites, podcasts, RSS • Social networking – blogs, Twitter etc. A digital strategy can only enable a PMI plan and cannot be a substitute for it
• 15.
  15 Thank You