As the numbers of mergers and acquisitions continue to rise, the majority still fail to realize their intended value. Following best-practices and using third party support can help increase your chances of success. Perficient’s wide variety of tools and assets in the following eight capability categories help complement and drive the overall success of a M&A transaction throughout the entire M&A timeline. Here are some action items you should consider under each capability for each phase of the M&A timeline:

Strategy

• Pre-close/Due diligence: Consider strategic financial modeling, consolidated financial reporting roadmaps, persona & journey maps, and baseline KPIs.
• Close: Forecast impacts, evaluate journey maps, and assess KPI dashboards.
• Post-close: Continuously measure KPI success.
• So what? Work to assess financial impacts, minimize friction points, optimize member and employee experience, and iterate based on KPI re-assessment.

Business Architecture

• Pre-close/Due diligence: Consider ERP (SAP, Oracle, etc.), CPM (Oracle, OneStream, etc.), CRM (Salesforce, Adobe, etc.), mail, corporate portals, data engineering (warehouse), and interim/permanent platform.
• Close: Establish best practice recommendations, consolidated financials & management view, ROI valuation, north star, and shared cloud implementation.
• Post-close: Implement best practices, and operate/go-forward/sunset.
• So what? Get it right the first time, accelerate realization of platform harmonization, accelerate speed/security/agility, and reduce operational costs.

Member/Consumer Experience

• Pre-close/Due diligence: Review office, active directory/authentication, digital front door, corporate portals, brand/re-brand, etc.
• Close: Determine present go-forward architecture and re-branding.
• Post-close: Execute on the plan.
• So what? Operationalize best practices and accelerate your time to market.

Analytics & AI

• Pre-close/Due diligence: Consider insight gathering, organizational models (spans & layers) to optimize roles, skills, etc.
• Close: Perform insights review from analysis (e.g., assess operational KPI’s, trends, warning signs).
• Post-close: Provide consolidated financial results, ongoing reports, continuation of encapsulating data and making recommendations, and develop/implement action plans based on insights.
• So what? Save time identifying short lists of targets using AI methods, driving data driven decisions, and increasing your probability of success.

Managed Services

• Pre-close/Due diligence: Build Dev/SecOps, infrastructure/hosting, help desk, and disaster recovery.
• Close: Enable your service operations.
• Post-close: Consider run of show measurement, and adjustment.
• So what? Streamline your operations, lower your total cost of ownership, boost speed/agility/time to market, maximize uptime, and improve SLAs.

HCM/Change Management

• Pre-close/Due diligence: Perform current/future state organizational assessment and optimization guidance.
• Close: Provide communications rollout and change plan implementation while closing the deal.
• Post-close: Consider run of show and engagement surveys (OHI).
• So what? Retain your talent and optimize your organizational structure.

Agile Leadership

• Pre-close/Due diligence: Build M&A mobilization and Agile workstream alignment.
• Close: Enable your value stream execution.
• Post-close: Monitor and continue to use best practices.
• So what? Effectively enhance speed/predictability and promote best practices.

LEARN MORE: Why Healthcare Organizations are Missing the Mark in M&A

Healthcare M&A Successes

A large US healthcare organization turned to our business architecture capabilities when an acquisition left them struggling with a complex set of redundant, un-consolidated systems. By implementing a Pivotal application solution with Boomi, the reengineered data integration strategy consolidated its application portfolio and solved thousands of daily EDI/HL7 transactions. This consolidated solution saved time and resources. The automated PCF user onboarding process went from hours to less than a minute, and Purge application automation as part of CI/CD saved memory and disk resources.

A US health system turned to Perficeint’s analytics & AI services when acquisitions left them with multiple EHRs and non-integrated systems. We implemented data warehouse, data modeling, and analytics solutions. Dashboards delivered valuable insights on CMI, volume/discharge, readmissions, length-of-stay, revenue cycle and costing, and patient satisfaction. The solution provided harmonization of clinical and financial data across disparate systems, presenting a single, trusted enterprise view of data that powers informed business decisions.

A large medical device company used our member/consumer experience capabilities to consolidate disparate websites into a cohesive brand experience and optimize processes after an acquisition. Using Adobe Experience Manager (AEM) and Adobe Target, we created a new platform that integrated content from many websites and provides an exceptional UX for both internal and external sources. We consolidated content from 600+ websites, migrated more than 2 million records into the system, and migrated 16,000 E-manuals into AEM library for a seamless patient/phycisian/healthcare professional experience.

SEE ALSO: Healthcare M&A: Pillars of Success

Why Perficient?

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.

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

Growth

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.

READ MORE: Why Healthcare Organizations are Missing the Mark in M&A

Agile Integration

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.

Why Perficient?

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.

Market pressures are motivating both hospitals and health systems to seek operational, strategic, or financial value through consolidation. The yearly number of hospital M&A transactions has grown over the past decade. While healthcare M&A slowed due to the COVID-19 pandemic, we are once again starting to see deal volume grow at a rate that’s overwhelming to many organizations. The overall transaction size of these deals is also growing, as many large organizations have announced mergers or acquisitions in the past few years.

The Need for a Modern M&A Approach 

Despite this growth, the majority of organizations are, unfortunately, missing the mark.

According to Harvard Business Review, “ Indeed, companies spend more than $2 trillion on acquisitions every year. Yet study after study puts the failure rate of mergers and acquisitions somewhere between 70% and 90%.”

When costs are accrued along the M&A journey to a degree that degrades the value of the deal, intended value will not be realized. According to Forrester, the four contributing factors to an organization failing to realize its intended value are:

• Growth: Only 27% of deals resulted in margin improvement and revenue growth.
• Philosophy: Nearly half fail to achieve intended synergy due to the organization’s operating philosophy lacking discipline around operating metrics and consolidation.
• Management: A determining factor in an organization’s success is having the right leadership and an experienced team involved in the transaction.
• Skepticism: Executives are skeptical. Seventy-eight percent believe they can no longer rely on traditional M&A capabilities for digital transactions. There is a need to bring new techniques and drive predictability for these deals.

Because of this need for change, innovative leaders are looking for a more modern approach to M&A, focusing on data, artificial intelligence, and agility. Today’s leaders are searching for predictability through value driving empirical data that can help them choose the correct acquisition targets. Organizations are looking for different approaches to achieve value in a shortened timeframe. An elongated M&A timeline can cause employee morale, stock price, operating margins, etc. to suffer.

Why M&A?

Businesses often use M&A to expand their market presence and business scale by leveraging combined assets. Combining two companies’ assets, with the right guardrails in place, can yield optimized business processes, reduced redundancies, and broader market coverage opportunities.

M&A can be used as a fast and economical way to expand product and market breadth. Meaning It can add products and distribution channels or move current products into more appealing markets. This use of M&A brings economies of scale and faster product rollout.

An organization may choose M&A to increase efficiencies. When successful, M&A can reduce the cost of products or services by better allocating scarce resources, rationalizing org structure, and optimizing technology across the expanding enterprise.

Setting Your Organization Up for Success

With a need for a more modern M&A approach, technology is becoming a strategic differentiator. Successful organizations see technology as an asset that can deliver synergy and aid in their success. We are seeing organizations pull technology into the deal earlier in the process, during the due diligence/pre-close phase.

Organizations that engage their technology teams and leaders early during the M&A process reap early and long-term benefits.

A survey by Forrester found that 40% of decision-makers reported that their business unit/IT department used third-party technology strategy service providers in the past 12 months, ranking this category as the highest business strategy and execution area where expert consulting was employed.

READ MORE: Healthcare M&A: Pillars of Success

Why Perficient?

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.