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Procurement plays a vital role in helping companies to realize the expected benefits of a merger or acquisition.
Accenture examines the challenges and outlines six ways in which procurement can help make a merger successful—and so help drive high performance.
Procurement synergies such as scale buys and purchase process consolidation often contribute between 25 percent and 50 percent of targeted benefits from a merger or acquisition. However, achieving these benefits is harder than many companies think. Prime obstacles include lack of awareness and expertise in key sourcing and procurement areas, such as blending company cultures, harnessing global talent, integrating e-procurement systems and maintaining a “business as usual” service for internal stakeholders.
High-performance businesses—those that consistently outpace competitors in growth and profitability—are more likely to log M&A successes whatever the business climate. These companies typically leverage the power of procurement to realize their successes.
However, one of the things that makes mergers and acquisitions (M&As) daunting is the sheer volume of challenges that confront the procurement department all at once. Along with tough deadlines and high shareholder expectations, chief procurement officers may concurrently be expected to perform a number of other demanding tasks, including the design of a procurement strategy for the new organization, the creation of a plan to deliver immediate and sustainable third-party spend savings, the integration of global procurement teams and processes, and the design and delivery of a procurement operating model that maximizes enterprise-wide talent.
Accenture’s experience suggests six ways in which procurement can help to make a M&A successful:
Contact us to find out how Accenture can help your organization leverage procurement to achieve high performance through M&A.
Jeremy Robinson is an executive director in the Accenture Supply Chain Management service line and is the UK lead for the Sourcing and Procurement practice. He has over 20 years’ experience in supply chain transformation, procurement strategy development, strategic sourcing and e-procurement. His global supply chain experience spans the public and private sectors and he has led transformational programs across the postal, telecoms, banking, retail and utilities industries.
Sean Doyle is a manager in the Accenture Supply Chain Management service line, specializing in procurement transformation and strategic sourcing across a variety of industries. He has experience of procurement pre merger due diligence in the high tech sector and procurement post merger integration across high tech, consumer packaged goods and third sector organizations. He has also held senior management positions in telecoms and high tech industries focused on procurement strategy development.
October 1, 2010
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