Mergers and acquisitions (M&A) often bring with them the promise of a bigger, better company and new and exciting products and services. However, behind the scenes, they can create many back-office challenges that come at a time when there is increased scrutiny on operations and output. Those hurdles can be even higher if operations are not automated.
It would be difficult to find an industry that has seen more high-profile M&A activity than the semiconductor market. Intel buying Altera. SoftBank buying Arm. Cypress buying Spansion. Marvell buying Cavium. Qualcomm trying to buy NXP while fending off a takeover bid by Broadcom. Those are only some of the headlines, and with each one come statements of more competitiveness, emerging markets like the internet of things, combined products and greater efficiencies.
However, as in any industry, when semiconductor companies merge, much of the deal’s success will depend as much on how executives manage the melding of internal software and processes as the new offerings that will eventually hit the market. The companies may have different enterprise resource planning (ERP) systems, disparate customer relationship management (CRM) operations and varying human resource (HR) processes, and all of these must be brought together and dealt with efficiently if the merger is to be a win. All of this can result in decreased productivity, lower customer satisfaction, and poor visibility at a time when the microscope is placed firmly on operations.
One of the most important business operations, the order-to-cash (O2C) cycle, must go seamlessly during merger efforts. The O2C cycle is a crucial point at where companies interact with their customers, and where problems can result in the most harmful consequences. A company’s reputation can rise and fall on how it runs its O2C processes – where customers place orders, where the orders are fulfilled, where the customers are billed and where their payments are made and processed. It’s through O2C that disputes are resolved and customer demands are met. For companies in transition, there are no mulligans. Keeping customers satisfied is a must.
If either of the merging companies have highly manual O2C processes, the challenges are even greater and the stakes become higher. O2C systems are always complex. Orders come in from faxes, emails, and the company’s website, invoices need to be created, payments need to be collected. Multiple departments, teams and technologies are involved. Manual processes are slow, expensive and error-prone and can only exacerbate the problems. Orders can be delayed or wrong, data entry errors can result in billing problems, customer’s disputes are left unresolved and ultimately customers can feel ignored or dissatisfied, which can lead to lost business for you and more business for competitors.
Automating the O2C processes can greatly increase efficiencies. Business who can immediately and uniformly automate processes in the O2C cycle following an acquisition are much more likely to maintain a healthy cash flow and satisfy what is almost overnight a much larger customer base. With cloud-based automation solutions, companies in the midst of a merger can ensure a positive end-to-end customer experience, with orders that are correct, easily tracked and delivered on time, simpler billing and payment processes, and customer service representatives that have more time to interact with customers than dealing with back-office tasks.
The companies themselves have greater visibility into the status of invoices and orders, and can better anticipate and address issues before they become problems for the customers. They have streamlined cash-flow management systems, improved collaboration among all stakeholders, a reduction in days’ sales outstanding and a drop in the cost of cash collection. There are fewer errors made throughout the O2C process, staff levels don’t need to rise when order volumes increase, and costs for processing, personnel and equipment are reduced.
Mergers and acquisitions by their very nature are difficult. Disparate business units, product portfolios, and roadmaps need to be made into one, and differences in all the back-office systems need to be resolved. Throughout all of this, a high customer experience must be maintained and the business needs to continue to get orders out and payments in. It’s never easy, but a cloud-based and automated O2C system can help erase many of the challenges that come when two companies become one.