Why Leading Companies Migrate to Purpose-Built Solutions: Pt 1
29 February 2016
It wasn’t long ago that even the largest companies relied on general purpose tools such as spreadsheets and email to manage the massive data domains of HR, Manufacturing and Sales.
Today, most large companies have migrated to purpose-built solutions such as PeopleSoft, SAP and Salesforce, giving them more effective management and control over the unique characteristics of these essential domains.
Just as HR, Manufacturing and Sales are ongoing corporate functions, most large companies engage in buying, selling and reorganizing assets on an ongoing basis. In an average year, this activity represents trillions of dollars in transaction value, and is strategic to the overall health of these companies. Its strategic execution may be the most valuable, yet riskiest of corporate activities. It must be done right. The most successful companies are now migrating to purpose-built tools to give them the competitive advantage they need to succeed.
In this White Paper, taken from an eknow webinar of the same name in the ‘Art of M&A’ webinar series, eknow staff will discuss with the distinguished panel their experience with using general purpose tools, their decision to move to a purpose-built solution, the result, and why they would never go back to the old way of executing M&A.
Our panel will discuss how they were able to:
- Derive more value, sooner;
- Gain total control over the entire M&A process;
- Know the status of all deals in real time;
- Understand, manage and mitigate risks;
- Use automation where it has the most impact;
- Transition incrementally;
- Enjoy a competitive advantage.
Joining eknow were:
Tiffany Acuff, Business Development Associate at Medtronic
Mark Allen, Director of M&A Integration at Agilent Technologies
Carla Morelli, M&A Lead at JDSU
eknow: Looking across the market, the majority of people indicated that they were involved or responsible for the full life cycle of the M&A activity within their organizations. Whereas in larger companies there is significant specialization, the data suggests that there is a strong reliance on corporate development staff providing continuity throughout the process, if not, oversight.
The data further shows that M&A professionals want to be able to control and manage all the opportunities and risks. That presents a challenge in light of the massive amount of information that needs to be collated and analyzed.
We continue to see activity picking up in almost every sector in the industry, but frankly, we just don’t see companies hiring more people.
Our three panelists’ organizations represent a wide variety of activity within an entire M&A lifecycle.
Part 1, The Decision to Look for Improved Solutions
eknow: Please share how your organization was conducting M&A activities prior to embarking on a purpose built solution. What kinds of tools were you using and what facets of M&A were you trying to automate.
Carla: We were primarily using a hodgepodge of SharePoint, Excel spreadsheets and Outlook, with the famous email trail where the subject is the same but the topic changes 50 times. For us, it was a very frustrating set-up. There were emails and files going around and we discovered people were working off of not the current version of headcount or location.
Mark: Instead of using SharePoint, we were using Documentum’s eRoom for the document management and collaboration tool, a variety of templates in Excel, and Microsoft Project. Although we felt pretty good about our processes, there were the issues of revision control and the email trails.
Tiffany: We were using a combination of Excel, Microsoft Word and SharePoint. Everything was done manually. We spent time over the past several years trying to find a tool to track all of our activity. Within our business alone we have several hundred targets that we’re tracking at any given time. It made it extremely difficult, given the fast pace and all the information you’re tracking, to be able to make timely decisions on transactions and report to executive management, at any given time, because everything was manual. We’ve even gone as far internally to put forth an effort of building a database that met the specific needs of corporate development and business development functions. It still didn’t fully meet our output needs and reporting for management.
eknow: How did you define what your requirements were to find a solution?
Tiffany: We were pretty comfortable with our processes. We didn’t see any purpose-built tools that specifically meet that business development process. To work to outline that process and to identify a tool that meets that needs, that even when building the database that we built internally while it met our process and it fit our needs, it lacked an output area. We still had to manually build reports. It was great for storing information and tracking information, but it didn’t give us those reporting needs. Whereas, when we learned about the eknow system, it was clear to us that it was specifically built for the corporate development function and it also provided us a lot of output needs and flexibility.
eknow: Did your team have a very specific methodology to define your requirements and review solutions?
Carla: Our quest to find something new was actually born out of a ‘lessons learned’ project that we did after one of our acquisitions. We took all our functional leads and sat down and said, “Okay, what works and what doesn’t?” One of the recurring topics was the quality of the information that we had to work with and how there were disconnects, sometimes, between what somebody thought they were using and what they should have been using. Then they had to regroup. From that was really born our realization that we had to find a better way to make sure that everybody was always seeing the same piece of current information. When we started looking around, we took the time to make sure that the process that we use just to get through a deal was well-defined and that we understood the different roles. Then from there we thought, “Where are these people located?” They can be, in our case, anywhere in the world. How do we accommodate for time zones? How do we make sure that people can consistently see what they need in a timely way? That generated our requirement list for something that was hosted 24/7 and that didn’t require any kind of regular nightly data update like a data warehouse. That was flexible enough for us to both implement a template that we can work off of and still be able to accommodate deal by deal for the specifics of that particular transaction. We went through a pretty good requirements process not just to say what fields needed to exist, but more what kind of behavior we’re trying to facilitate. Then we just started forcing products. Having run selection teams for many years in lots of different places, you want to keep an open mind and look at purpose-built offerings. We also looked at other kinds of tools that were not necessarily specific for M&A projects, and started eliminating one by one based on our key criteria; what do we care about the most. Then the ones that were left, we started to take through test drives. I screened approximately 35 different applications. We narrowed it down and spoke with 11 or 12 companies, demoed six of those and test drove two. It’s not an insignificant undertaking to conduct test drives, so we limited it to two.
Mark: I think companies go through different levels of maturity. We were comfortable with our processes. When we did the next cycle of how can we get better and maybe how can we do more with less, two things came to the top. One is that the project management tools like Microsoft Project both did too much and too little for us. We needed the ability for multiple people around the world to be able to edit the same project information. We already had the ability to share files but being able to edit the same information, in a consistent fashion, was needed.
The other thing that we didn’t have was the ability to track our deal funnel. And we have a dozen deals in the hopper at any given time. We had followed tools off and on over the past few years. We reached the level of maturity where we realized that a tool like this would be very helpful to us. One of things we also realized was that if we could save hiring one consultant person to do project coordination, that is to be the editing point for the project data, we could pay for the tool. And we can save potentially more than that.
Stay tuned for the next installment in this series.