Merged Fortunes: Integrating Separate Procurement Organizations
ISM2016 session on Tuesday, May 17
Presenter: Cathy Herr, senior director, global procurement, Elanco Animal Health, Indianapolis.
Mergers and acquisitions can be hostile or cooperative, and can differ in size, ranging from a product acquisition in which business continues as usual to merger with a large company, which usually results in disruption, Herr says.
She has experienced numerous acquisitions at Elanco —since 2007, the company, a division of Eli Lilly, has been in acquisition mode, most recently acquiring Novartis Animal Health, a Swiss company similar to Elanco.
When integrating an acquisition, companies need to:
●Understand the situation — Consider the employees involved and the acquired company’s culture, atmosphere, policies and employees affected.
●Collect as much data as possible to gain as complete as possible picture of the company. This data can include spend data and contracts.
●Consider staffing strategies. Look at value opportunities, where overlaps occur and whether you should reduce staff or stay the same.
●Define your integration strategy — whether you should integrate immediately, in waves or never.
●Create a vision and culture for the joined company going forward. What do you want the company to look like in a year? What about three years?
●Map out what you want.
●Make sure you communicate.
●People are your most important asset
●Have an open mind: Realize that your practices may not be the best way of doing things
●Realize that there will be “realities of integration.” Because operating styles and culture differ, they may be disruption.
Key quote: “You have to learn to thrive in that chaos.”