Buying a business can be an exciting but challenging time, and if it’s not planned and assessed well, the take-over can go less smoothly than anticipated.
There are a number of general risks associated with the acquisition of a business which include:
- Targeting the wrong business
- No good motive for the acquisition
- Losing trust of key stakeholders
- Poor due diligence
- Failed integration
The final one here, failed integration, is something that traditionally happens after the acquisition has taken place, but prevention of failure is far more likely if there has been research and assessments carried out from the start.
Integration is generally the day to day working of the business once the acquisition has gone through and can be derailed by a number of things including:
- Work culture differences
- Change management challenges
- Patched or inadequate IT systems
- Operational skeletons
- Disparate systems
However, identifying the gremlins of a business prior to acquisition and prior to the start of the integration programme will ensure there are very few surprises. This is something the diligence teams should be responsible for but sometimes small details with big consequences can get missed.
Assessing the systems
As discussed in the previous blog about mergers, research and goal setting are essential. If you know where the business intends to go, and what it needs to get there an effective integration plan can be formed.
Therefore, prior to an acquisition it is useful to know what the pain points are for the company and what you need to have in place in terms of processes or systems to solve those pain points.
For many businesses the pain point is the inefficiencies of the information systems which are often old and clunky. If this is the case – and the company has not actually been bought for the terrific system already in place – addressing this is a great place to start.
This should therefore help you to identify whether the information systems and processes already in place are up to the job in hand. If they are, then that makes everything easier, but if they are not, then as a business owner you need to identify whether a whole new system is required or whether some additions, some tweaks and some patching will be enough to make the system functional.
Throwing money at the problem
A successful integration of systems is not always based on who has the deepest pockets. Whilst many pain points and inefficiencies can be solved by investing a lot, this is not always the case and is rarely necessary.
Sometimes a smaller investment but in the right place can have a much bigger impact. For example, if, following an analysis of the information systems they are found not to be suitable for the job they are required to perform, it doesn’t mean they have to be completely replaced.
The team here at Brandon Cross can help you save the functioning parts of the system and integrate them with new off the shelf or bespoke solutions to ensure they have the functionality required. This is a much more cost-effective approach than starting from scratch.
Using a company like Brandon Cross to carry out an integration analysis can ensure that the acquisition goes smoothly, and the company will be running towards its new goals in no time. To find out how we can help you give us a call today.