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Walking the Tightrope, Episode 5: Adam Tkacz on Mergers & Acquisitions

by Kenneth Murphy

November 11, 2013


In Episode 5 of Walking the Tightrope, PwC Senior Manager of SAP Consulting Adam Tkacz discusses some key challenges and offers advice for how to successfully steer through a complex merger & acquisition project, or "program."



Ken Murphy: Hello, this is Ken Murphy with SAPinsider, and welcome to “Walking the Tightrope,” a series of exclusive SAPinsider Online podcasts on managing SAP projects. Every week leading up to the SAPinsider Managing Your SAP Projects conference, which begins Nov. 20 in Orlando, we will be speaking with a veteran project leader for some insights into what keeps SAP projects humming along. This week, we are pleased to be joined by Adam Tkacz, Senior Manager of SAP Consulting with PwC. He will be presenting a session at the Managing Your SAP Projects conference focusing on mergers and acquisitions. Adam, thank you for being with us today.

Adam Tkacz: Thanks Ken. Hello and also I would like to invite everyone to my session in Orlando. I’m looking forward to it.

KM: So Adam, your session highlights that more than half of mergers and acquisitions fail to deliver the original goal. I’m curious if there’s a common early mistake that’s a culprit for a lot of this failure, and does that happen to create a snowball effect?

AT: I think there might be several of those, but the one that I personally think is very important is the definition, or the whole merger and acquisition transformation. Should it be a project? Or should it be a program? And I think for many organizations project management is a sign of old everything, but the program management is something not that well known. And why it isn’t, is a mistake. Because SAP for mergers and acquisitions environment has much more in common with the program management, mostly because of the strategy alignment. Because it’s driven by the guiding principles and assumptions, so if we define our initiative as a program it’s much easier to be flexible with the scope; it’s much easier to define a particular sub-task as a project, and manage the interdependencies between them. So my advice in that respect will be to if you have a merger and acquisition project, don’t think it’s a project. Think it’s a program.

KM: Think of it as a program. That’s some good advice. With the incredible complexities in a merger and acquisition, how important is managing scope of the program? And does this necessitate unique skill sets?

AT: Of course it’s very important but it’s a bit different than in a traditional SAP implementation. I think SAP programs, or projects, for mergers and acquisitions can be characterized by the high level of uncertainty. And one can expect there will be many changes of the scope on the way. Especially if you have carve-outs of the separation project, it’s very often like building a start for the multi-billion company or the new organization you need with the new processes, business processes. And of course with a new system. And you do all the things at the same time; so you can imagine that the scope will fluctuate. And it’s going to be changed. So what skill sets does a project program manager need to have? Is excessive strategy thinking. Because this project are driven by the guiding principles and assumptions and project manager, program manager need to know how to apply this guiding principles and practice. It means that that person needs to be empowered to make a decision and the faster decisions can be taken in that kind of context, the better the success factor might be.

KM: You mentioned the importance of aligning strategies, especially with this high level of uncertainly. Does that mean that aligning strategy is crucial on the business side as well as on the IT side to align that strategy together, and have a common understanding ahead of time?

AT: Here it’s even more true than any other transformation. Business strategy for mergers and acquisitions is driving the IT strategies, and IT strategy it needs to follow. In reality, very often IT strategy is created on the fly depending on how the integration plans are progressing. (4:32) And I think the common thing for the M&A project is from the stance of testing. They are very very strict on accuracy, so how to handle this alignment? (4:43) If your – just to give you an example – if your business strategy for the new organization that this needs to be leaner, faster, and more agile, it means that your systems need to be the same. Sometimes you need to cut some corners, sometimes you need to get faster getting rid of the traditional solution to put in place let’s say something in a cloud like SAP’s offering right now Ariba or for SAP Sales and Operations in HANA, which can replace the old-fashioned SAP APO, and at least from my experience you can align the business strategy and the IT strategy being flexible in providing solutions for the changing environment and the changing requirements for the business.

KM: And lastly Adam, what’s the best piece of advice you can give for keeping a merger and acquisition program running smoothly overall?

AT: Ken, I think these project rarely runs smoothly. They always are very difficult and always kind of a roller coaster. But one piece of advice might be about the risk management. It’s just manage your risk appropriately. In that context, I think from my perspective I see there are two types of risk that are usually the most difficult. I think the first are the risks that you know, and unfortunately you don’t know what to do with them. And the second are the risks that you don’t know, so you don’t plan for them. In mergers and acquisitions it’s very often the second type of risk is much more common than the first one, and that impacts a lot of how the project is going to be executed. As a strategy program manager, you need to be able to handle that. You need to be able to coordinate the management between the project risks that you didn’t expect, and the business risks that you didn’t expect. And it’s not that critical for the systems if your users are a bit unhappy because they’re losing functionality at the end of the trip at the go-live, but if your business is in danger because these systems are not enabling you to sell, are not enabling you to bill or ship, then you’re in trouble. And usually the SAP project manager is not really in that, but in the merger and acquisition when you build an organization and you build a system at the same time you’re part of the game. So my advice is always be focused proactively for looking for the answers for the risks that you don’t know, and if they will appear always come back to strategy, always come back to the driving principles and guiding principles to find the answers what to do.

KM: Again, this is Ken Murphy with SAPinsider, and this has been “Walking the Tightrope,” a series of exclusive SAPinsider Online podcasts, and we’ve been speaking with Adam Tkacz, Senior Manager of SAP Consulting with PwC. Adam, thank you for joining us and we look forward to catching up with you at the conference.

AT: Thank you very much see you in Orlando.

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