- How Kimble PSA Supports Successful Acquisitions and Mergers – by Mark Robinson
How Kimble PSA Supports Successful Acquisitions and Mergers
By Mark Robinson, CMO.
Acquiring another business – or being acquired – is challenging. If the process doesn’t go smoothly it can suck the energy out of both parties and distract from the ‘day job’ of selling and delivering services. Where this happens, post-acquisition numbers can take a dip as people get distracted working on the ‘acquisition deal’.
Merging companies can also mean administrative tasks multiply. When a previous company I founded was acquired, we were ‘forced’ to use our acquirer’s PSA system and 12 months later we had an extra four people in our back office just to administer a company which had not grown!
In contrast, as co-founder and CMO of Kimble for eight years now, I have seen many of our customers negotiate smooth and successful acquisitions and mergers. In fact, several of the multinational corporations which have implemented Kimble have done so after acquiring another business which is already a customer. To give a couple of examples, Rule Financial was a Kimble user when it was acquired by GFT and so was Forrest when acquired by ECS. In both cases, the acquiring company was impressed at how well these smaller businesses were being run as evidenced in due diligence, and as a consequence the parent company adopted Kimble.
A comment I often hear from our customers who have been acquired by other entities which don’t use Kimble PSA is: “The acquirer couldn’t believe how quickly and easily we were able to report on our business during due diligence.”
An acquiring M&A team will often ask for data sets in a very specific way, which may be quite unique to them. The potential acquirer wants to see the data in a format that will enable them to understand what the impact of the acquired business would be on their own numbers once combined. For example, they may have specific ways of calculating utilization and revenue recognition, they might have developed their own ways of calculating costs, transfer pricing and so on. But whatever their information requirements are, Kimble provides a rich source of data that can be sliced and diced to produce information in the required format. These reports can readily be shared with external investors.
We also see larger companies which are already Kimble users extending the PSA across both companies in order to create visibility of the pipeline and demand. This also allows resource management to be shared. Perhaps there is a gap coming up in the availability of resources for an upcoming project at the parent company – is there anyone at the new company who can fill that?
Extending Kimble PSA across both businesses also creates the potential for recruiting and cross-selling on behalf of both businesses. It may also help to manage staff across many countries or regions. And increasing the base of users and thus the ‘network effect’ increases the potential to draw resources from across the whole organization.
This process should be seen as a full-scale implementation, with a change management plan in place and support and training offered to staff prior to and during the move to Kimble. Linking the two businesses through the PSA helps to get them working together as a team and facilitates better communication across the board.
For more information, please refer to more resources below.
–Podcast about Rule Financial’s journey to acquisition.
–Podcast on what acquirers look for in a consulting firm.
–Webinar replay entitled “What Are Buyers Of Knowledge-Intensive Services Businesses Looking For In An Acquisition?”
–Webinar replay entitled “Grow your Professional Services organization faster with Equiteq’s 8 Levers of Equity Value”