Integrated M&A Transaction Management 4.0 – Key for (Cost) Efficient and Successful Transactions
In periods of growth, but especially during an economic downturn, integrated M&A Transaction Management (iTM) is crucial for cost-efficient transactions and maximising the probability of a successful transaction - valid for all different kinds of M&A transactions (e.g. add-on investments, De-investments, Carve-outs, Capital raise).
Integrated M&A Transaction Management focuses on the target-orientated implementation of business objectives in a specific M&A event, combining best-practice project management methods with the specifics of M&A transactions. Through this combined approach, the speed, cost-efficiency and probability of implementation of M&A transactions can be sustainably optimised. With M&A 4.0, digitisation has also entered the various areas of transaction management. Integrated control tools, project management tools and market intelligence provide the technical foundation for integrated transaction management 4.0. Using trustworthy cloud solutions, the optimal cooperation of all project participants can be ensured – even beyond company borders.
The starting point of integrated M&A Transaction Management is the established M&A Maturity Model, which specifies the organisational framework and corresponding transaction phases. Within this framework, integrated transaction management is based on four pillars.
Pillar 1 – M&A Governance Structure. This pillar establishes the basic rules and conditions for an M&A project, since it defines the organisation, the committees, processes and responsibilities in the respective transaction. Reporting, decision-making and escalation matrixes must be defined in order to enable quick and clear management of the transaction. It is important to clearly communicate this to the entire project team. Cloud-based solutions offer efficient ways of documenting and distributing this information. Equally important is M&A Knowledge Management, as it governs the reuse of know-how, templates and tools and thus contributes significantly to the cost-effectiveness of the transaction. Finally, M&A Performance Management provides feedback on the success of past transactions and identifies potential improvements for future transactions.
Pillar 2 – Scoping and Planning. In order to enable target-oriented control of transactions, it must be clearly defined at the outset which goals should be achieved by the respective transaction and in which framework conditions the transaction should be realised. The success of the transaction is dependent on the definition of a clear goal. This essential step should be given the highest attention from the initiation phase onwards. The SMART approach clarifies transaction objectives through its five criteria. In addition to the setting of the objectives, the timing of the transaction and the required resources must be determined. Starting with a general roadmap, a specification can be made by a detailed project plan in each phase of the project. In terms of integrated transaction management, all relevant teams (e.g. legal, tax) and stakeholders must be included in the planning in order to obtain a holistic view of the key topics and necessary tasks. Especially with mid-market and large-cap transactions, the corresponding ramp-up of the required team and infrastructure must also be precisely planned.
Pillar 3 – Communication and Reporting. In addition to the transaction having a clear objective, the creation of a project organisation with a transparent reporting and communication structure is important. With a top-down approach, forming an appropriate meeting structure enables overall transaction control and operative control of individual workstreams. However, the related reporting should report project progress bottom-up, aggregating a condensed view of overall project management. It is recommended that the M&A 4.0 reporting and communication structure is implemented by cloud-based standardised tools, enabling cost and time efficiencies. With (online) dashboards, the entire team has visibility over the overall project status and the progress of individual transaction phases. The use of dashboards also offers the advantage that reporting can be edited depending on the target user. The use of Harvey Balls as a dashboard communication tool prepares and exhibits statuses briefly and concisely. Thus, standardised and transparent summaries for C-level management are immediately available.
Pillar 4 – Task Management. In addition to the reporting and communication structure, the clear allocation and management of activities is of crucial importance. In transaction phases in which several parties are involved (e.g. due diligence), the task of controlling progress management is of essential importance. Ideally, proven and reproducible M&A playbooks for each transaction can be used in the sense of M&A knowledge management. M&A 4.0 can be leveraged through the utilisation of modern project management tools such as kanban boards for traditional task control. A kanban board is an agile project management tool designed to help visualise work and maximise efficiency flows. Kanban boards use cards, columns, and continuous improvements to help transaction teams commit to and finalise their work. A kanban board helps ensure work visibility throughout the whole transaction team. Additionally, from a project management perspective, it is possible to trace which tasks are not yet assigned and which tasks are overdue.
In order to implement state-of-the-art integrated transaction management, only a few steps are necessary. In addition to the clear commitment of management to this approach, choosing the right tools and establishing the approach is crucial. Irrespective of individual implementation concerns, the following principles can contribute to successful project management:
- Clearly define general and specific goals for the company and M&A project teams.
- Placing the M&A project teams with a clear governance structure.
- Providing sufficient resources to plan upcoming projects and to complete the ramp-up phase.
- Staffing the project with experienced managers and utilising their experience and know-how.
- Use of established, standardised tools and processes that function across the enterprise and are beta-tested.
- Establish decision-making structures, reporting and efficient transparent communication mechanisms.
- Including sponsors and experts to reach business decisions and overcome groupthink.
- Efficient proactive risk management.
- Ranked decision-making matrixes based on (ex-ante defined) information.
- Use of proven (IT) tools for efficient project design.
Integrated Transaction Management 4.0 bundles all the necessary topics for a successful transaction and, with the associated M&A 4.0 solutions, provides the prerequisites for an efficient process. ARTEMIS Group supports the implementation of an integrated transaction management system tailored to its client’s needs. This trusted approach ensures the wise use of resources and high stakeholder awareness regarding project status. ARTEMIS M&A 4.0 oriented platforms and tools increase process and cost-efficiency. Additionally, ARTEMIS Group provides operational support for the transaction manager as a central point of intersection between the company, external consultants and targets.
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