In this week’s Mini-Sode, D4M’s COO Jean-Yves Durocher will talk about the final challenge of Mergers/Acquisitions: the human factor.
Mergers/Acquisitions have plenty of legal, technological, and financial hurdles to deal with.
However, when it comes to this trying and complex process, it is often the personal or professional disagreements that make the process especially challenging.
Whether it’s the technology your company will use, how your company purchases software or challenging the technological/business choices you take, you will always need to deal with challenges in direction that will cause friction.
However, as is often the case with the D4M approach, we will hear Jean-Yves Durocher talk about how knowledge, experience and strong leadership can help steer the ship to not only guide the process, but to fulfill your business goals.
Jean-Jacques: So, when it comes to the IT/ERP side of things, what do you think is the best way to merge two ERP software? You mentioned the creation of a checklist before, so I’m assuming planning is very high on the priority list?
Jean-Yves: I would say planning, but it goes beyond simple planning. I would say it’s the plan within your plan; it’s extremely critical to show dependencies.
Jean-Yves: I think because there will be a sequence of events, there’s things that you can transform, abandon or merge – technology wise. Some of the activity or integration pieces could be done in a standalone; others are highly dependable on each other. For example, if you’re thinking about the manufacturing environment for your scheduling system, you might think we’re going to replace the scheduling, but, the scheduler link typically will feed out of data from the ERP.
Jean-Yves: So, there will be question as far as “do I do A before B or B before A”? So, to me, the planning is important, but within the planning, I would say the sequencing and the dependencies need to have a good understanding of the dependencies between each of the component that you’re going to have to touch
Jean-Jacques: So, out of all of the things that an IT team has to deal with – when it comes to a merger of two different ERP services – what exactly is the most challenging part of an IT integration?
Jean-Yves: The challenge, in many ways, is oftentimes a human one. For the IT team, we are working to serve and to support the business. At the end of the day, there’s a human factor in all this where there will be people using technology that comes from 2 organizations and, one day, there will be a key decision to make on if you have two of everything. At the end of the day, you have to pick one.
Jean-Yves: So, if you have two ERP, you have to pick one; if you have two purchasing app/approaches to purchasing– you have to pick one. Over the last hour, we talked about the app themselves; but, if you if we raise the dialogue for a second to the purchasing processes, it all points to business process. So, if you have two different processes for purchasing, for example, there is a good chance that a decision will have to be made on which process do we keep AND which process do we let go?
Jean-Yves: So, it becomes – to some extent – a human factor issue in the purchasing process and the challenges – if we like it or not – to make tough decision on do we pick A or we pick B, as you can’t please everybody. So, IT is there to assist and make recommendations to help speed up this process.
Jean-Yves: But I think the human factor in this case is still very important.
Jean-Jacques: It’s like you were saying before its all about having a team around you that has “been there done that”.
Jean-Yves: Correct; And this is a bit what you see very often in the market from the buyer’s perspective.
Jean-Yves:. The buyer being the buyer would probably come many times they would come to say, “okay, you guys have to integrate into our platform”. The go to assumption is, you’re going to merge to the buyer’s platform or processes -And that’s the going in position.
Jean-Yves:, It doesn’t necessarily mean there’s no room for exceptions. There is always room for exception; if the company being purchased is doing things that are much, much more efficient -for whatever reason – why would you trash or replace a process that is a lot more efficient than your own?
Jean-Yves: At the end of the day, it has to come down to common sense. And, even then, it creates other type of comments where you may have people saying “how come we bought this company, but we’re taking their process and they aren’t taking our process?” And again, that points to the human aspect of all this.
Jean-Yves: So, you need to – at the end of the day – drive this process; and – I would say – saying you need strong leadership to help this process would be an understatement.
Jean-Jacques: In closing, do you have any other thoughts regarding the human aspect of merger/acquisitions, potential SAP integrations and so forth?
Jean-Yves: Yeah. I would say one last thing before we wrap this up, in the marketplace today, there is a significant shortage of good IT Professionals.
Jean-Yves: Good IT skills are hard to find and they are even harder to keep in your own organization. So, I think there has to be special attention placed on the business in those transactions to keep and to secure your best experts because I think the disruption that you will create may trigger a migration people resigning – good people – that are very valuable to your organization that knows your system, knows your process, etc
Jean-Yves: I’m sure in every organization, there are key people. So, I think the right steps have to be taken so you don’t end up – by accident or by negligence – losing very good resources, regardless if they are on the buyer side or the seller side. It’s hard to find sharp people out there.
Jean-Yves: So, I think special attention is needed. And I would say the same comments probably apply today. And in other areas of manufacturing, it’s hard to find No good expert out there. It’s a challenge nowadays, so I think people should pay probably more attention or make sure they pay attention to keep their best players on the team.
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