Nicolas Schobinger | Business Transformation Academy - Post Merger Integration - Case Study from SAP

The Integration of BusinessObjects BTA – Spring 2012 Nicolas Schobinger / SVP / SAP Services / Global Strategy & Business Development May 11, 2012

©  2012 SAP AG. All rights reserved. 2

Objectives & Agenda

Objectives � Share the experience integrating

BusinessObjects – one of the biggest M&A in Tech

� Share how we dealt with not ideal processes and situations

� Share how “bold” and “consequent” can pay off – vs a “compromise” PMI

Agenda � Context � Chronicles of the BusinessObjects

acquisition � Conclusions

BTA Spring 2012 Theme


SAP is the world's leading business software company

SAP today

�  #1 in key Software segments

�  176’000 customers �  24 Industries �  120 countries �  37 languages �  59’400 employees �  2’900 certified partners

� Revenues of €14b at 33% operating margina

a for 2011, non-IFRS

Source: sap.com, investors relations

Services

Consumer Industries

Trading Industries

Financial Services

Process Manufacturing

Discrete Manufacturing

Public Services


The BusinessObjects acquisition

BusinessObjects �  6.0 bUSD / 3.8 bEUR price-tag

– Portfolio centered on Analytics – By then, 3rd largest deal in SW

� Public Tender in FR and US � Sizeable in all aspects for SAP

– Number of employees, locations, lines of businesses, ...

–  Installed base, revenues to protect, channel

� BusinessObjects grew through M&A

SAP’s experience w/ M&A �  Typical SAP deal w/ avrg deal size

factors smaller �  Typical SAP deal used not to be a

public tender – Squeeze-out process can pose

problems �  Typical SAP deal used to be narrow

in scope and IP driven � Dedicated M&A-team, focused on

pre-deal and IP – But PMI recognized as an important,

practice across SAP


©  2011 SAP AG. All rights reserved. 1 Internal

Business Transformation Management Methodology (BTM²) BTM²: The big picture

Enablement Program/Project

Management

Program Planning and Governance

Program & Proj.-Integr.

Mgmt

Program & Project Scope

Mgmt

Program & Project Time & Cost Mgmt

Program Quality Mgmt

Program Human

Resource Mgmt

Program Procurement

Mgmt

Risk Management

360° Strategic Risk

Assessment

Deep dives for strategic risk

areas

Assess transformation business case

Define risk strategy

Risk Management

Execution

Risk Monitoring

Identify additional

improvement

Risk Mgmt. as part of Board Governance

Competence & Training

Management

Competence strategy

Training need analysis

As-is analysis

Gap analysis

Curriculum development

Training preparation

Training

Evaluation & improvement

Program Reporting

Organizational Change

Management

Set-up & governance

Stakeholder management

Change agent network

Communication

management

Performance management - Project team

Performance management -

Business

Change readiness

assessment

Change monitoring

Processes Management

Determine scope of analysis

From template to bespoke inventory

Identify improvements /add attributes

Map selected processes

Plan process implementatio

n

Implement processes

Evaluate processes

Establish CIP

Value Management

Baseline analysis

Value estimation

Detailed business case

Agree ownership for

realization

Plan benefit realization

Execute benefit

realization

Review and evaluate results

Establish potentials for

further benefits

Meta Management Orchestration of individual disciplines: Guidelines, Leadership, Culture, Values and Communication

IT Transformation

Management

Business and IT Capability Assessment

To-be analysis

Gap analysis

IT roadmap plan

Solution architecture

design

IT Deployment

plan

IT Operations & Service

Optimization

IT Lifecycle Management

Strategy Management

AS-ISData Collection

Analysis of needs &

maturity level

Design business

vision

Design Business

Model

Integrated transformation

plan

Business Case

Organizational model

Risk analysis

Direction


Source: Ernst & Young; Deloitte

Determinants of M&A success or failure

Three key determinants along the M&A value chain

Failure can occur anywhere in the process. Each phase of a M&A-Transaction contains hidden risks, which must be reduced by active M&A management.

Pre-deal Deal Post-deal

!  How to balance vision, strategic orientation and opportunistic behavior?

!  How to ensure that the integration can achieve the increases in value which were expected when the decision was made?

right candidate

Choosing the

1 Robust justifications

Developing

2 the deal Securing

3 Value creation & growth

Ensuring

4

1 Consistency of the deal with the overall strategic purpose

3 Choice of integration approach and ability to integrate

!  How to ensure that the decision-making process leads to the "right" decision?

!  How to develop meaningful acquisition justifications despite pressures, un-certainties and merger inherent limitations (data, time, people involved ...)?

2 Quality of decision making (content and process)

Central ‘Thesis’ out of the PMI of BusinessObjects

Maximize the probability of achieving the desired outcome”

Claim 1

” Process and Methods as means to to deal with ambiguity”

Claim 2

”

� Address Critical Success Factors of M&A …

� … you went through, or others identified …

� … in a bold an consequent way

�  Leverage Business Transformation ....

� … skills and methods …

� … applied to a ‘different’ context


BusinessObjects’ PMI chronicles Overview

announcement cut-over 22 + 24 weeks

Oct 7th

14 weeks

day 1

Jan 21st Dec 31st

�  Strategic Rationale

�  Business Case

�  Integration Approach

�  Leadership, Mgmt, high level org

�  Red flags �  Initiation &

Design �  Staffing

�  Agenda setting

�  $

�  Operations �  Non-funding

�  Topical coverage �  Scalability of

program & methods

�  Visibility & relevancy

�  Strict PMO-focus on essential matters (Top 100, $, culture)

�  Handover to line �  Mid-term

planning & Budgeting

�  BTrafo platforms and teams

Phase I Phase II


BusinessObjects’ PMI chronicles Key Topics

�  Post-engineer Pre-Deal justification –  Integration Approach, –  Synergies –  Retention approach

�  Product roadmap

�  Agonsticity, Customer retention

�  GTM

–  Coverage & assignment of customer base, segregated GTM –  Offers

�  Arms lengths (corporate laws, minority stakeholders, tax)

�  PMI Logistics

–  Thanks Giving, Christmas Field Kick-off, Quarter close; PaloAlto – Walldorf –  Capacity –  Measure readiness & risks

Phase I


BusinessObjects’ PMI chronicles Key Topics Phase

�  Hand-over Phase I –  New leads –  New workstreams, delegate down, …

�  Scale scope, methods, and accountability

–  Maintain relevancy and visibility for decision making –  Workstream structure to allow for ‘business-led’ without slipping into business as usual –  TOP 100, Business Case & value tracking

�  As usual – the unexpected and surprises –  Pricelist –  Forgotten customer segments/channels –  GTM defections –  Support models –  IT cutover –  P&L integration

Phase II


Conclusion

©  2011 SAP AG. All rights reserved. 1 Internal

Business Transformation Management Methodology (BTM²) BTM²: The big picture

Enablement Program/Project

Management

Program Planning and Governance

Program & Proj.-Integr.

Mgmt

Program & Project Scope

Mgmt

Program & Project Time & Cost Mgmt

Program Quality Mgmt

Program Human

Resource Mgmt

Program Procurement

Mgmt

Risk Management

360° Strategic Risk

Assessment

Deep dives for strategic risk

areas

Assess transformation business case

Define risk strategy

Risk Management

Execution

Risk Monitoring

Identify additional

improvement

Risk Mgmt. as part of Board Governance

Competence & Training

Management

Competence strategy

Training need analysis

As-is analysis

Gap analysis

Curriculum development

Training preparation

Training

Evaluation & improvement

Program Reporting

Organizational Change

Management

Set-up & governance

Stakeholder management

Change agent network

Communication

management

Performance management - Project team

Performance management -

Business

Change readiness

assessment

Change monitoring

Processes Management

Determine scope of analysis

From template to bespoke inventory

Identify improvements /add attributes

Map selected processes

Plan process implementatio

n

Implement processes

Evaluate processes

Establish CIP

Value Management

Baseline analysis

Value estimation

Detailed business case

Agree ownership for

realization

Plan benefit realization

Execute benefit

realization

Review and evaluate results

Establish potentials for

further benefits

Meta Management Orchestration of individual disciplines: Guidelines, Leadership, Culture, Values and Communication

IT Transformation

Management

Business and IT Capability Assessment

To-be analysis

Gap analysis

IT roadmap plan

Solution architecture

design

IT Deployment

plan

IT Operations & Service

Optimization

IT Lifecycle Management

Strategy Management

AS-ISData Collection

Analysis of needs &

maturity level

Design business

vision

Design Business

Model

Integrated transformation

plan

Business Case

Organizational model

Risk analysis

Direction


Source: Ernst & Young; Deloitte

Determinants of M&A success or failure

Three key determinants along the M&A value chain

Failure can occur anywhere in the process. Each phase of a M&A-Transaction contains hidden risks, which must be reduced by active M&A management.

Pre-deal Deal Post-deal

!  How to balance vision, strategic orientation and opportunistic behavior?

!  How to ensure that the integration can achieve the increases in value which were expected when the decision was made?

right candidate

Choosing the

1 Robust justifications

Developing

2 the deal Securing

3 Value creation & growth

Ensuring

4

1 Consistency of the deal with the overall strategic purpose

3 Choice of integration approach and ability to integrate

!  How to ensure that the decision-making process leads to the "right" decision?

!  How to develop meaningful acquisition justifications despite pressures, un-certainties and merger inherent limitations (data, time, people involved ...)?

2 Quality of decision making (content and process)

Maximize the probability of achieving the desired outcome”

Claim 1

” Process and Methods as means to to deal with ambiguity”

Claim 2

”

operational PMI community

Nicolas Schobinger | Business Transformation Academy - Post Merger Integration - Case Study from SAP

Technology

Transcript of Nicolas Schobinger | Business Transformation Academy - Post Merger Integration - Case Study from SAP