Maneuvering through M&A : From Disparate to
Dominate Synergies
Global Trends And its impact on the Sourcing Strategies
The views expressed in this presentation are in my individual capacity and do not reflect the views or official policy / position of my employer
Anil BhavnaniDirector – BPO OperationsPfizer Inc.
Why M & A? The need for faster growth and increasing competition
Access to large capital funds and brand equity
Gaining complementary strengths
Expanding Customer Base
The need to enhance technological skill sets
Expand into new areas to foster growth
Widen the portfolio of addressable markets
Meet end to end solution needs
Opportunity for Growth and facilitate overall expansion
M & A – Global Trends
There’s been a wave of M&A deals lately in the outsourcing industry
Business continues to grow annually at double digits to over $ 20 BN by 2013
Building of Near Shore Capabilities in Emerging Markets countries like Columbia, Argentina , Costa Rica , Mexico , Honduras in Latin America South Africa and Egypt in Middle East and India , Malaysia, Philippines Singapore & China in Asia
Consolidation of BPO work post M&A with single service providers to get synergies of scale
Investment Banking & Finance companies having significant government stake thereby leading to consolidation of services across providers
Reasons for failure of M & A -Integration
Corporate Culture Clash
Lack of Communication
Loss of Key people and talent
HR issues
Lack of proper training
Clashes between management
Loss of customers due to apprehensions
Failure to adhere to plans
Highly EffectiveTeams
High TrustEnvironments
HighlyEffective
Communication
Strategically ManagedChange
Synergy
Focus on Synergies & it’s Metrics
When applied to M&A “synergy” means both companies win
Modeling synergies: Conduct synergy and value driver analyses, including probability weighting of financial impact and success
Executing synergies: Create a detailed work plan that identifies dedicated and accountable resources
Tracking synergies: Implement robust approaches to synergy tracking and reporting
Measurement of Synergies : Hard $avings and Optimization of workforce and processes
Strong Governance practices: Ensure strong project management and reporting of synergy realization through Integration Forum
Best of Both Approach
De-Duplication of processes leading to enhanced productivity
Rationalization of ERP’s across the merging companies
Consolidation of IT & BPO Services Providers based on Competency
Rationalization of Resources across merging companies
Plant Rationalization for manufacturing activities with increased emphasis on emerging markets
Blended approach to Outsourcing with equal emphasis on creating captive shared services and growth of BPO Services
Global footprint of processes across Shared Services and BPO Providers based on skill & competency
How is M&A impacting Sourcing Strategies?
Companies are getting smarter at the act of managing change through organizational integration and rationalization of resources
Clear IT Strategy is the building block for laying the foundation of the long term BPO Strategy
Consolidation of Vendors leading to Optimization of sourcing and achieving economies of scale
Competency and Skill based approach driving rationalization of services across various IT and BPO Service providers
Global alignment helps drive and prioritize change management
Good Project Management and Governance are the key factors to a successful integration and early realization of synergy benefits
Summary
As Global companies work through M&A
there continues to be an increased focus on driving
synergies throughrationalization of IT and BPO
Services providers