Mergers and acquisitions – truly complex transactions – require strategic planning and carefully orchestrated execution to achieve success. The establishment of a Project Management Office (PMO) to manage the integration of the two organizations plays a crucial role in ensuring that the M&A integration is executed smoothly, on schedule, and within budget.
Coordination of activities
If you think about two companies coming together, it’s a long list of activities that need to be integrated ranging from HR to IT, to accounting and finance operations, and everything in between. A PMO becomes an essential element of a successful merger or acquisition, as it serves as a central hub to coordinate all the needed activities and to ensure that they are all aligned with the integration goals.
The PMO is responsible for all the nuts and bolts – truly all the essential details – of the transaction. The PMO will create and maintain an integrated project plan that includes all the activities, timelines, and dependencies. Successful management of the overall plan helps to ensure that everyone involved in the integration works towards the same objectives, communications are on point, and the process moves forward efficiently.
Standardization of processes
The PMO is also responsible for developing and implementing standard processes for M&A integration. This ensures that the integration is conducted in a structured manner, with clear guidelines and expectations.
Importantly, the PMO establishes standards for reporting, risk management, change management, and the ever-important ongoing communication that must take place during the course of the project. Standards not only set expectations for members of the team, they also help to reduce the risk of errors and miscommunications which can derail the integration process.
Risk management
The risk associated with any M&A and its integrations can be high. There is significant risk in a variety of areas, including financial, legal, and operational risks. The PMO is responsible for identifying, assessing, and mitigating these risks. The PMO ensures that a comprehensive risk management plan is developed, which includes risk identification, risk assessment, risk response planning, and risk monitoring. The PMO monitors the risks throughout the integration process and takes action to mitigate any and all emerging risks.
Change management
M&A integrations require significant changes to the organizations involved, including changes to processes, systems, and culture. The PMO is responsible for developing and implementing a change management plan that helps to minimize resistance to change and ensures that the integration is successful. The change management plan includes communication, training, and stakeholder engagement strategies.
Stakeholder management
M&A integrations involve a wide range of stakeholders, including employees, customers, suppliers, and regulators. The PMO is responsible for managing these stakeholders and works to ensure that the interests of all stakeholders are considered throughout the integration process.
To accomplish this, the PMO establishes communication strategies and protocols that enable stakeholders to provide feedback and receive updates on the integration process.
The Project Management Office (PMO) can be either internal or external, but regardless of who manages this crucial function, the PMO team plays a critical role in mergers and acquisitions as it ensures that the roles, timelines, and responsibilities are defined, coordinated, and integrated for all involved stakeholders. Without a capable PMO, the integration process will not run smoothly, and likely the M&A goals will not be met. Companies that prioritize project management during the mergers and acquisition process are more likely to achieve their goals.
The team at Empirical has years of experience successfully integrating companies, on-time and on budget. If you want to chat with us about M&A, or the importance of PMO, we’re game! Reach us via email at hello@thinkempirical.com, or give us a call (610) 994-1139.
