Synergy Best Practices
Assign Accountable Owners
Assign accountable owners, hold them to a plan and do the proper follow-up. Otherwise, initiatives will be de-prioritized.
Review Planned Benefits
Make sure that planned deal benefits that require further analysis by assigned accountable owners are reviewed and revisited.
Follow Up on Agreements
Follow up on agreements on planned measurement approaches and their timing.
Link Initiatives to Projects
Ensure initiatives are supported and linked to integration related projects.
Motivate via Performance
Motivate via existing employee performance assessment and incentives within the organization when possible.
Maintain Focus
Avoid overmeasuring or losing focus on key operational metrics.
Be Flexible with Ownership
Benefits/Costs-to-Achieve may need to shift between functional owners.
Reevaluate when Necessary
Changes in the market, business, etc. may require a reevaluation of the benefits and costs.
Prevent Cost Shifting
IMO will need to manage cross-functionally to ensure costs are not simply shifted to other parts of the business.
IMO's Role in Synergy Realization
Provide Processes & Tools
Providing processes and tools for achieving planned acquisition benefits.
Identify Participants
Identifying participants in the processes and their roles and responsibilities.
Capture Quick Wins
Identifying and capturing "quick win" synergy opportunities.
Work with Management
Work with management leads to evolve concepts into actionable plans.
The IMO office supports synergy tracking by ensuring plans include an Approach, Schedule, Accountable Owner, and Defined Benefit Measurement Approaches.
A key to evolving initial concepts into an actionable plan is to: Engage the owner (the person or function responsible for the synergy) in defining the approach, schedule, benefit measurement methodology, required investments, and other tracking priorities.
Roles and Responsibilities
| Assigned To | Role | Accountable For |
|---|---|---|
| Integration Management Office | Overall program management of synergy initiatives: plan development, execution, and monitoring & controlling. | Synergy Initiative assignments, driving planning process, integrating individual initiatives, and managing cross-functional facilitation/decisions. |
| Synergy Initiative Owner | Defines, plans, and achieves synergy initiative benefits. Reviews and drives internal fiscal approval of any investments. | Achieving benefits within planned costs and schedule. Allocates resources to define, plan, and achieve synergy benefits. |
| Accounting Resources | Defines and implements measurement of benefits and costs. Establishes tracking cost accounts if required. | Ensuring costs tie to general ledger items, maintaining documentation, periodically reporting achievement vs. plan, and ensuring accuracy. |
Sample Synergy Identification
High-level synergy area identification
| Integration Plan Workstream | Applicable Cost Savings & Synergies |
|---|---|
| Human Resources Management |
|
| Sales Force Rationalization |
|
| Production & Purchasing |
|
| Technology & Accounting |
|
| Communication & Brand |
|
Sample Deliverables
Overall Goal: Reduce operating costs by $50 MM
Reengineer the supply chain
Difficulty: High | Timeline: within 18 months
Benefits Est: $24MM - $70MM (Most Likely: $50MM)
Outsource IT call center
Difficulty: Low | Timeline: within 9 months
Benefits Est: $4MM - $8MM (Most Likely: $6MM)
Restructure SBU
Difficulty: Medium | Timeline: within 6 months
Benefits Est: $2MM - $5.5MM (Most Likely: $4MM)
Master Synergy Plan
Provides a macro view of performance vs. plan. It includes dependencies between projects and synergy initiatives and links to individual initiative templates.
Executive Review
Periodic (Quarterly/Monthly) reviews summarize the status for key initiatives, highlighting what's on or off track. This facilitates discussions on plans, issues, and baseline changes.
Initiative Level Tracking
Each synergy initiative has an accountable owner. An accounting supporter for that owner periodically updates a dedicated tracking template (e.g., in Excel) for that initiative.
Related Presentations
