How Are Shared Services Coping With Mergers And Acquisitions?

In today’s fast-moving market, companies are merging and acquiring at speed. But how is this having an impact on shared services?

The business will of course expect shared services to be able to swallow this expansion without disruption to their front-end capabilities. But the increase in demand for support functions, or the change in demand for different services, is bound to affect shared services significantly.

So how are leading shared services centres coping with their organization’s mergers and acquisitions?

Without a strategy in place, these changes can be overwhelming. There are a number of questions to consider when evaluation what such a strategy might look like, including:

• If both organizations in questions already have a shared services operation (SSO), will one be required to close and the other to incorporate the former’s workload? If so, which SSO is more prepared and able to accept a migration?
• What processes and functions is each SSO already operating? How many similarities are there?
• Which processes and functions lend themselves to a merger more easily than others? Is process re-standardisation required?
• Is outsourcing appropriate for the lesser known, more transactional tasks? Does one company already have an BPO partner?
• How will the merger affect the reporting and governance structure? How will it affect performance management methods and KPI sets?

But above all these points, the number one consideration should be: how can this change be used as an opportunity?

The Co-Operative are one such organization that did just that. Following a period of multiple acquisitions, they found themselves in the tricky position of reducing 9 legal entities down into just one. This also meant consolidating 12 different ERP systems. In effect, they quickly found themselves in an environment of disparate processes, little control and visibility and ‘patchy’ forecasting.