The fragmented wholesale distribution marketplace has continued to consolidate over the years. For some smaller distributors, it means a time to “get out”. For larger ones, a good time to buy. Some smaller companies have been “saved” by acquisition; acquirers grow geographically, tap into new markets, and strengthen their market position.
Maybe your company has acquired a business, or is seriously considering doing so. You’re thinking, “Now what?!” Typically, much strategic thought has gone into the “who” and the “why” at the executive level, but the “how” is left up to management to make it work. Operationally, the details of integrating one or more new locations can be challenging. And, it shouldn’t be taken lightly.
As an integration consulting company, we’re often called in to assist in this process. We’ve brought new branches onto Activant Eclipse for multiple companies. The same principles apply to opening a new branch due to organic growth as well as through acquisitions. Here are some crucial ways you can make a new branch more successful:
Treat it as a completely new conversion. Even though your whole company isn’t transitioning to a new ERP, THEIR “whole company” is. Regardless, every implementation, big or small, should be given the same kind of attention and focus as the next.
Plan it. Don’t get caught up in the outcome before you focus on the input. That means having a solid project plan, and spending time on preparation before the conversion. As integration consultants, we typically start with a 1,000 line project plan for any implementation.
Inventory IT. IT can be hit from multiple angles in an acquisition. The first step should be to analyze the acquired company’s hardware and network. Much like with people and process, you can determine where there are gaps, overlap and opportunities.
Account for overlap. It’s sad, but most acquisitions result in some duplication. Ensure that those who are staying are properly trained on the software, and in their position, before anyone is let go.
Count on disruption. Any ERP change is serious change, as your ERP system is so engrained in what you do. While managing the change properly can minimize disruptions and maximize outcomes, you still have to factor in some business impact.
Make a process mash-up. Integrating an acquisition brings processes to the forefront. And, you shouldn’t always assume that your way is the best way. Just because “they” were acquired, doesn’t mean they were clueless about distribution. The acquired company can bring to light new and worthwhile processes. We encourage you to take the good with the bad and use this time of change as an opportunity to re-evaluate how you operate.
Demand consistency and communication. An extremely important aspect of being successful is delivering the same message to the organization, particularly throughout training sessions. Consistency and over-communication will ensure processes are followed properly. It also provides a warmer feeling during a time of uncertainty.
Train people to work outside the vacuum. Bringing a new branch into the fold creates opportunities to leverage and optimize resources. Inventory is a good example. However, your staff needs to be trained to recognize and utilize these advantages. Jack Cohen from BAC Sales in New York converted a new location to Eclipse, and he echoed this sentiment. “You need to train your order entry staff to flip between multiple branches to make sure the customers’ needs are fulfilled. The key is the training.“
Rely on experts. If possible, get an outside resource involved to oversee the project and look out for your company’s best interests. This may be someone like us; or, it may be us plus some. A third party does not have the emotional blinders on and will act as a neutral party. Remember that internal staff are stretched too thin already, especially to give this type of change the proper attention it needs (as referenced in tip #1). An outside firm who specializes in conversions can provide insight on everything from project management to training to go-live support. They can also act as a messenger and an outside perspective that helps to “sell” the new employees on the change. Jack from BAC Sales agreed, noting that it would’ve been "practically impossible to do the conversion without the additional support.”
Tony King is the owner of Zerion Group whose roles include sales, consulting and management of a team of 12 consultants who work directly with customers to help them achieve their business goals.