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In a merger situation, successfully integrating the finance function is vital to the new company’s success—and to achieving many of the expected synergies from the exercise.
Accenture looks at the issues and outlines the 10 success factors for successful finance integration.
When two companies merge, integrating their Finance functions is a major imperative. Variations in financial standards and procedures can prevent the merged entity’s Finance function from effective daily operations, impacting both internal and external stakeholders. Integration of this key function is also time-sensitive: the entity’s leaders, not to mention investors, demand consolidated financial statements, earnings and projections as soon as possible. Additionally, a majority of the potential gains from a merger cannot be achieved without committed support from Finance.
Accenture believes that executives could achieve better results under pressure if they took time up front to consider the future-state goals for the finance function:
Successful companies set up the key design principles and strategy to be adopted by the finance function before interim designs for Day One are considered. Typical design principles may include: the level of process and system customization, the degree of centralized governance, and the globalization of processes and procedures.
In defining their financial future-state operating model—organization, locations, reporting structures, policies, processes, technologies and workforce—the most effective companies treat Finance function integration as a major change program. The effort can involve major modifications in how one or both of the formerly separate organizations deliver their finance operations.
Finance is an area ripe for synergies after a merger. Indeed, Accenture has seen the total cost of the function drop by up to 40 percent—but many companies fall substantially short in realizing the expected synergies. They also tend to underestimate integration costs. Perhaps most problematic, integration teams tend to get caught up in the urgent task of preparing for Day One, and so may relegate synergy management and tracking to the bottom of the priority list.
Accenture has identified 10 critical success factors for the integration of the finance function after a merger:
Oksana Kukurudza is a senior executive in the Accenture Finance and Enterprise Performance practice based in New York. She is the global lead of the Accenture Finance Post-Merger Integration Offering and North America lead of Finance Strategy Offering. Over the last 18 years she has focused on supporting the integration and transformation of companies’ finance organization, processes and capabilities to operate more effectively at lower cost.
Jeff East is a senior manager in the Accenture Finance and Enterprise Performance practice based in Atlanta. He specializes in post-merger integration and finance strategy. He is a certified public accountant and has over 20 years of experience in M&A advisory, strategy, merger integration and finance and accounting operations.
Brian Offen is an Atlanta-based consultant working primarily in the Accenture Utility industry area, focusing on Finance. During his tenure with the firm, Offen has helped various utilities clients with their planning, budgeting and forecasting capabilities, record to report strategies and management reporting methodologies.
May 16, 2012
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