Appendix PMI Tools
Based on A.T. KEARNEY’S experience performing numerous post-merger integration (PMI) engagements, we have developed a set of PMI tools that can facilitate project management throughout the merger integration process.
PREPARE FOR AND EXECUTE A PERFECT DAY ONE
Day One Checklist by Function
Description: The checklist contains a consolidated list of actions that each function will need to perform prior to day one.
Objective: This allows each function to prepare to ensure a seamless execution and transition on day one.
Tip: Checklist can include due dates, prioritization of activities, activity interdependencies, and activity owners to promote accountability and task management.
Day One Action Plan
Description: The action plan provides details of all activities to be executed on day one, grouped by key integration categories.
Objective: The project management office uses the action plan to organize the various work streams and to ensure all critical steps are completed on day one.
Tip: Similar to the day one checklist, the day one action plan outlines timing, prioritization of activities, interdependencies, and activity owners.
FIGURE A.1 Post-Merger Integration Tools Overview
FIGURE A.2 Example of a Day One Checklist by Function
LAUNCH INTEGRATION STRUCTURE AND PROJECT TEAMS
Integration Structure
Description: The integration structure provides an organizational overview of the merger integration process, listing the team members and their roles and responsibilities in executing integration activities.
Objective: This tool allows the project management office to track the groups driving the integration activities and their roles, identify any gaps in responsibilities, and assign resources accordingly.
Team Charter
Description: The team charter is a summary of the initiatives undertaken by each integration team. Most team charters contain three major sections:
1. Description of the team’s broad mission and the team’s structure and staffing.
2. Key deliverables, potential risks, and project interdependencies.
3. Resources and capabilities required.
Objective: This gives the project management office easy reference to the activities, deliverables, and composition of each team to track initiative progress.
FIGURE A.3 Example of a Day One Action Plan
FIGURE A.4 Integration Structure
Integration Master Plan
Description: The integration master plan is the essential operational flight plan of activities, milestones, owners, dependencies, and timelines for all activities in the integration process. The master plan compiles all the initiatives undertaken by each team (in the team charter) into a master schedule.
Objective: The integration master plan:
- Provides an overview of the activities being carried out by each team.
- Allows the project management office to track initiative progress.
- Highlights interdependencies between initiatives.
Tip: The master plan may be subject to ongoing updates as activities are carried out and unexpected changes occur. However, critical milestones and deliverable deadlines should be highlighted to ensure these are not delayed. Highlighting owners of initiatives and prioritizing activities is a good practice.
Project Prioritization
Description: Prioritization of projects is derived from assessing each project’s long-term strategic value, its ease of implementation, and financial attractiveness.
Objective: This is a strategic assessment of each initiative in the overall integration program. Prioritization is critical in discussions with senior management about making trade-offs or when allocating resources among competing initiatives.
FIGURE A.5 Sample Team Charter
FIGURE A.6 Integrated Work Plan
LAUNCH BENEFITS TRACKING AND REPORTING (BTR) PROCESS
Management Analyses
Description: Management analyses target topics that are critical to the goals of the integration process. Such analyses can include the following:
- Characteristics and relationship of the acquiring vs. acquired company.
- Organizational models of the companies.
- Major levers (financial, functional, and strategic) for realizing the value of the merger.
- Capability portfolio analyses of corporate functions.
Objective: Management analyses are performed on information gained from the companies involved to give management a second-level insight into the integration synergies and obstacles. These analyses may throw light on decisions that management needs to resolve during the integration and trade-offs that need to be made (e.g., functions with weak capabilities may be candidates for outsourcing).
FIGURE A.7 Prioritization Grids
FIGURE A.8A Examples of Management Analyses
FIGURE A.8B Examples of Management Analyses
Synergy Summaries
Description: Synergy summaries provide details on the expected integration benefits identified during the M&A process prior to day one.
Objective: These summaries provide the project management office with an overview of the synergies expected, the initiatives that need to be executed to achieve the plan, and the resources required.
Tracking Database
Description: The tracking database is a financial summary of the expected benefits of each initiative, derived from the synergy summaries.
Objective: The tracking database provides a quantitative view of the benefits expected from the integration and the targets for each initiative.
Benefits Tracking and Reporting (BTR)
Description: The BTR is a toolset that allows users to input and update key project data easily, quickly, and frequently via Excel-based input documents. This allows management quick access to obtain information on the progress of each initiative. This key tool establishes a BTR process in the integration program.
FIGURE A.9 Synergy Summaries Tool and Reports
FIGURE A.10 Example of a Tracking Database
Objective: The BTR’s ability to provide information to management in a customizable format achieves multiple goals:
- Provides leaders with critical information to manage risks, acknowledge wins, close gaps, and allocate resources accordingly.
- Provides a forward-looking view on the risks and milestones expected in the near term to alert key stakeholders on upcoming deadlines and potential risks.
- Tracks and charts benefit delivery across multiple initiatives. Financially, this helps to reconcile benefits delivered vs. underlying business performance and maps these benefits against the integration plan.
LAUNCH RISK MANAGEMENT PROCESS
Merger Risk Profile
Description: The merger risk profile is a comprehensive list of risks expected from M&A and during the PMI process. The risk profile should contain the following information:
- Risk owner: The team member who has the most interest in resolving the risk and is best placed to assess that it has been managed successfully.
- Risk action manager: The team member tasked to action the risk plan under the supervision of the risk owner.
- Risk status update.
Objective: Provides the project management office with an overview of the risks expected in the PMI process.
Project Risk Prioritization
Description: Project risk prioritization is a strategic assessment of the risks highlighted in the merger risk profile. Inputs on the prioritization are derived from interviews with project managers and validated with the relevant sponsors and champions. These are reviewed and rated based on criticality and complexity in resolving.
Objective: Project risk prioritization is a critical activity in the risk management process to identify risks and allocate resources in managing these risks. The project risk prioritization allows management a visual representation of these risks.
FIGURE A.11 Benefits Tracking and Reporting (BTR) Framework
FIGURE A.12 Merger Risk Profile
FIGURE A.13 Project Risk Prioritization
Risk Mitigation Plan
Description: Once risks have been documented and prioritized, a risk mitigation plan is formulated by the team to be executed.
Objective: Risk mitigation should be a formal process that helps the team anticipate and plan for risks expected in the integration process. The risk mitigation plan is the output of this planning process with specific action steps to be implemented.
Tip: Actions from the risk mitigation plan should be incorporated into the main project plans. Risk mitigation plans are often dynamic as the integration process moves forward and should be regularly updated.
LAUNCH CHANGE MANAGEMENT AND COMMUNICATIONS PROCESSES
Change Readiness Assessment Tool
Description: The change readiness assessment tool helps evaluate each function’s level of willingness and ability to execute and prepare for the integration.
FIGURE A.14 Mitigation Planning Process
Objective: The tool provides management with an overview of where each function stands in regard to the changes anticipated in the integration process. This will allow management to anticipate resistance, identify roadblocks, and direct resources, or develop a mitigation plan to resolve any issues.
Stakeholder Issues Assessment
Description: Stakeholder issues assessment is a comprehensive analysis of the issues raised by key stakeholders regarding the integration. Inputs from each key stakeholder are first consolidated in an issue register and rated according to their associated risk and level of impact to the organization and the integration process.
Objective: The stakeholder issues assessment is an important process to anticipate and understand any issues in the merger and plan for any possible risk. This helps to provide early resolutions aimed at addressing the needs of stakeholders.
Stakeholder Mapping
Description: Stakeholder mapping identifies the key stakeholders and their impact on the integration. Stakeholders are typically grouped into four main categories:
1. Adversaries: Oppose the project and have considerable involvement.
2. Naysayers: Oppose the project but have low involvement.
FIGURE A.15 Change Readiness Assessment Tool
FIGURE A.16 Stakeholder Issues Assessment
FIGURE A.17 Stakeholder Mapping
3. Cheerleaders: Support the project but have low involvement.
4. Champions: Support the project and have high involvement in the project.
Objective: Stakeholder mapping is crucial to ensure support continues to drive the change. Mapping the stakeholders on a matrix allows the PMI team to understand the different interests, goals, and agendas among various stakeholders and understand which stakeholders need to be managed and which can be leveraged.
Communications Strategy and Plan
Description: The communications strategy matrix identifies how information should be delivered throughout the integration process. It considers key factors such as the importance of the message, the audience’s likely reactions, credibility and appropriateness of the delivery method, timing of the message, and availability of the individual deliverers.
Objective: The communications strategy should be a formal process in mapping the different types of communications required, the stakeholders to which they should be delivered, and the timing of these communications. The communications strategy matrix is a deliverable from this planning process.
Tip: A communications plan should be developed after creating the strategy matrix. In this plan, activities are scheduled to coincide with specific initiative development progress. The schedule establishes overall ownership and control responsibility. A senior level manager should be responsible for coordinating the control and consistency of communication activities.
FIGURE A.18 Communications Strategy and Plan
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