While the number of healthcare M&A transactions continues to recover since the COVID-19 pandemic, the overwhelming majority of organizations still fail to realize their intended M&A value. This is often due to unclearly defined business imperatives, poor program planning, and lack of discipline around establishing necessary initial guardrails.
There are however, some best practices that can be followed to enable success. Incorporating these success pillars into your M&A deal structure, with the right plan, can increase your probability of success.
Cost Analysis and Process Harmonization
The first three pillars for success in an M&A transaction focus on process optimization and cost elimination. This partially entails baselining current operating metrics across the entire organization, which informs leadership on how to best prioritize initiatives with the greatest value potential.
The three cost-eliminating pillars include:
- Reduce Expenditures: Consolidate, rationalize, re-negotiate for immediate cost reduction
- Optimize Structured Spend: Improve efficiency, increase productivity, and shift spend for programmatic structured improvements
- Invest in Business Outcomes: Align to value, plan and prioritize, iterate and innovate, execute and measure, and promote employee morale for business-value driven stakeholder partnership
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The fourth and final pillar for success in a M&A transaction focuses on growth to leverage opportunity to rethink how you want to position in the market by examining your products/assets and trying to determine the optimal mix. This pillar involves optimizing your go-to-market strategy by evaluating product rationalization, new product development, channel efficacy, marketing, sales growth, and brand Image to position yourself for success in the competitive landscape.
Traditional M&A integration approaches can freeze innovation for up to three years. In the modern world of M&A transactions, it is vital to use an Agile approach.
An Agile M&A approach:
- Enables incremental, continuous innovation during the M&A integration
- Drives innovation to improve customer experiences and retention
An Agile approach enables your organization to prioritize initiatives and optimize your technology, products, and talent to drive quick wins.
Partner with Perficient to leverage our existing skills and assets within the context of an M&A transaction to help your organization succeed where so many others fail. Our business architecture capabilities pinpoint how technology best services the needs of your business, operations, customers, and brand. With our data & analytics expertise, we deliver early insights into the M&A transaction while minimizing risk.
Our healthcare experts power process rationalization (e.g., corporate real estate, supply chain, purchasing, etc.). Program leadership brings enterprise-level know-how, built through our experience supporting the largest brands in the U.S. Our end-to-end capabilities combine a deep understanding of technology, architecture, and platforms, and we can bring your people and processes along as well.