Post merger integration model is a process that helps the acquirer and acquired company define the framework in which they’ll function. This will include the decision-making process, a leadership and governance structure, operating model, reporting matrix, and plan for internal and external communications. This planning phase is crucial for all departments including IT, finance and operations department, clinical departments as as quality, supply chain personnel, HR, and quality.
In the end, it is the success of PMI that determines the worth of the deal for both companies. Any benefits that are planned, regardless of whether they stem from platform consolidation, cross-selling expansion, geographic or industry expansion or cost reduction is difficult to achieve without proper planning and execution.
It is crucial that the organizational structure be properly established and communicated prior the beginning of the PMI in order to establish the tone for the entire project. This can be done by delineating roles, responsibilities and expectations from the start and will reduce conflicts and resistance.
A lot of effort is required in this area, since two merged companies often have different business processes as well as policies and procedures which need to be brought into sync. For example when one company keeps transactional data in books and the other utilizes an ERP system, considerable effort will be devoted to making their systems compatible.
This is where major process adjustments and integration take place to achieve the desired end-state procedures, which were originally planned and formulated. During this stage the new company will implement the business strategies that are combined and apply best practices from the two companies to gain synergies.