Complexity and effort of post merger integration


Effort determination

The question what the post merger integration effort will be puzzled integration managers for a long time. Siemens, as a very frequent acquirer, came up with a model that was derived from hundreds of acquisitions. It is based on 12 dimensions of complexity and assumes that the integration effort can be derived from the complexity measure.

A measure of complexity

The 12 dimensions are assigned to three categories: Volume, Restructuring needs and structural complexity.

The idea is to get a notion of the complexity of the post merger integration, by taking the area covered by the graph that connects all the data points.

Examples of complexity of post merger integrations

After having determined values for each of the 12 dimensions, the effort of the integration is proportional to the size of the resulting shape. The following picture shows two examples of complexities.

You see that the area covered by the green shape is bigger than the black shape leading to the assumption that the complexity and effort of the green integration might be bigger than the complexity and effort of the black integration.

How to cope with complexity in mergers and acquisitions

Since mergers have some complexity, independent from the target and acquirer´s size and the integration approach, you need methods and tools to manage that complexity.

In due diligence you analyse the target business volume and complexity as well as the acquirer´s business volume and complexity.

During the blueprint you define restructuring plans and future structure and processes.

In the post merger integration you execute the plans you created before using predefined work breakdown structures and apply structured project management and involve executives on a weekly basis to drive decisions.


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(C) copyright Dr. Karl Popp 2015-2018