Clarkston Consulting
Skip to content

Best Practices for Systems Harmonization in a Consumer Products Post-Merger Integration

Mergers and acquisitions (M&As) in the consumer products industry typically fall into two categories: 1) brand/portfolio expansion and 2) company acquisition, where considerations include the operating model, data, and enabling technologyWhen expanding a brand or portfolio, the emphasis is on integrating the acquired entity into the existing structure of the parent company, with a lighter touch on systems harmonization, focusing primarily on data migration. On the other hand, in the case of a complete company acquisition, efforts for systems harmonization after integration must encompass processes, people, and the operating model, in addition to data and technology integration. Below, we outline five best practices for a consumer products post-merger integration harmonization after a complete company acquisition.

Consumer Products Post-Merger Integration: Systems Harmonization Best Practices 

The following best practices are presented from the perspective of a full company acquisition, outlining strategies to prioritize system implementations in the integration process, minimize business disruptions, and expedite the realization of value within the newly formed entity.

Best Practice 1: Conduct a Comprehensive Systems Assessment 

A crucial planning activity is to conduct a thorough assessment of the existing IT infrastructure of both merging entities. This includes hardware, software, databases, and functional and enterprise systems. A gap analysis of the application inventory should be reviewed across business and IT stakeholders to align strategies for retirement, migration, or retention of each system within the child company. This includes an evaluation of the software licensing contractual agreements and strategies for termination or extension/transfer. Identifying systems redundancies, gaps, and compatibility issues lays the groundwork for a streamlined integration process and for the organization to realize synergies across the acquired and acquirer. The results of the systems assessment feed into the development of a unified systems integration roadmap.  

Best Practice 2: Develop a Data Migration Strategy 

Data is the lifeblood of any organization, and ensuring a smooth transition of data from legacy systems to the integrated environment is paramount. Ensure business and IT representatives from both the acquired and acquirer are engaged in defining the data migration strategies, including the identification of transactional and master data within scope of the integration. The team would align on source and target systems that house the data, as well as ensure the appropriate expertise is engaged in the data cleansing, validation, and testing to prevent data inconsistencies and ensure the integrity of information across the integrated systems.  

Best Practice 3: Prioritize Mission-Critical Systems 

Not all systems are equal in terms of their impact on day-to-day operations. Identify and prioritize mission-critical systems that directly contribute to the core functions of the business, and lay out the priorities within an overall integration roadmap, with consideration of the teams and resourcing required to support the integration efforts. This system integration roadmap allows organizations to focus on core business functions first, minimizing disruption and ensuring feasibility of resourcing to support the integration. Within each system being implemented, a comprehensive testing plan is needed – including unit testing, integration testing, and user acceptance testing. This testing should include business and IT team members across both the acquired and acquirer to ensure no unforeseen impact to the acquirer while fulfilling the operational requirements of the acquired.  

Best Practice 4: Don’t Underestimate the Value of Organizational Change Management  

As decisions are made on what systems will be retired, retained, or merged, impacted teams across both the acquired and acquirer must be kept abreast of these decisions. On the acquirer side, new data flowing in from the child company may skew KPIs within regularly used reports if certain filters aren’t applied, for example. For the teams whose systems are migrating to the acquirer, they will need to have the proper security access and potentially new training to use the new system. And, most impactfully, as decisions are made on integrating the acquired company into the acquirer company’s ERP and other major systems, the proper training programs, communication initiatives, and user support can help alleviate concerns about the change and minimize business disruptions.  

Best Practice 5: Develop a Contingency Plan for Major Systems Outages  

For systems with high impact on business operations, ensure there is a contingency plan to account for system outages or any other issues that may arise with system cutovers. These can include offline solutions to process transactions. Within each contingency plan should be a clear communications strategy that includes impacted stakeholders, who would be communicated on the system downtime duration, the reasons for those actions, and steps being taken to minimize disruptions.  

Post-Merger Integration Harmonization Case Study 

To help bring the above best practices to life, we’d like to share a recent client case study. For a global food and beverage company acquiring a snacks business, Clarkston was engaged to support the systems integration journey, including evaluation of the systems landscape through development and execution of a prioritized roadmap. 

  • Conduct a Comprehensive Systems Assessment: Clarkston led the evaluation of the Sales and Marketing and Supply Chain systems’ acquired snack business. Collaborating closely with both business and IT stakeholders, the assessment aimed to determine whether each system should be replaced with the acquirer’s technology or retained based on specific capability requirements. 
  • Develop a Data Migration Strategy:  The team worked with business leaders to identify key historical data to migrate from the acquired companies’ ERP system to ensure year-over-year reporting comparison is meaningful and feasible after integration. During the application inventory assessment process, the team held discussions on data retention strategies for systems being retired.  
  • Prioritize Mission-Critical Systems: Early in the integration journey, the Integration Management Office led the assessment of systems for integration, including alignment on the criticality of their ERP integration for financial reporting, Human Resources data and system harmonization, and core Supply Chain requirements. The prioritized roadmap accounts for business criticality as well as ensures the key business and IT resources can support the system integrations. 
  • Don’t Underestimate the Value of Organizational Change Management: Clarkston played a key role in evaluating the diverse operating models present in both entities, encompassing cultural aspects and ways of working. A comprehensive organizational change management strategy was formulated to address communication of process and system changes. Additionally, training sessions and drop-in hours were established to empower employees, ensuring their confidence in the support structure throughout the integration process and beyond. 
  • Develop a Contingency Plan for Major Systems Outages: Clarkston assisted both the acquired and acquirer companies in assessing business continuity plans for both entities. This involved ensuring that relevant stakeholders were informed about the plans and that they remained updated over time. 

During a consumer products post-merger integration, the harmonization of systems and technology is imperative for achieving operational efficiency and realizing the full potential of an M&A. Systems integration must be done in conjunction with thoughtful business process and people/ “Ways of Work” integration. Successful integrations focus on continuous monitoring and optimization, which includes performance monitoring, feedback mechanisms, and a responsive support model to address any issues that may arise.  

For additional guidance on post-merger integrations harmonization connect with one of our experts today. 

Subscribe to Clarkston's Insights

  • I'm interested in...
  • Clarkston Consulting requests your information to share our research and content with you.

    You may unsubscribe from these communications at any time.

  • This field is for validation purposes and should be left unchanged.

Tags: Post M&A Integration, Mergers and Acquisitions