Audio also available on Apple Podcasts and Spotify.
It was a record-breaking year for mergers and acquisitions (M&A) in 2021, with overall deals up 24% year over year. And almost 40% of those deals involved a private equity fund.
But that doesn’t mean every merger experienced corporate wedded bliss. While M&A can accelerate growth for professional services firms, it can often take time and a herculean effort to execute successfully. When planning an integration, firms will need to balance moving fast with a more thoughtful and transformational process.
“There can be a great desire to move quickly [with M&A integrations], but do you actually know what your future state organization is going to look like?” says Mark Turner, an industry expert who recently retired from Alight Solutions. “We’ve seen examples where rushing to add an acquisition created more heartburn, only for the company to realize that it wasn’t the future organizational state that they wanted.”
In this episode of the Workday Podcast, Turner and Michael Hemingway, director of finance at Alight Solutions, join us to talk about the trends driving M&A in professional services and how companies can shepherd integrations to a successful—and heartburn-reducing—completion.
Below are a few highlights from the conversation, edited for clarity. You can find our other podcast episodes here. Be sure to follow us wherever you listen to your favorite podcasts so you don’t miss an episode.
“From a system perspective, merged companies want to present a coherent, unified view to the client. But they also need to consider an internal operational view when determining how quickly they want to integrate acquired companies. How do they merge responsibilities within the organization? For example, who has P&L [profit and loss] ownership or the client ownership? They need to be ready for the impact of that change, so that internally they’re managing clients coherently while externally they’re presenting a single view to the customer.” —Michael Hemingway
“As businesses themselves become more global, the professional services firms that support them also need to meet their customers where they are. And that has led to expanding global footprints. Some services sectors also want to expand their footprint vertically. Maybe they were just providing payroll services and now want to provide all of their client’s employee benefits services, including health and pensions, so they can become one-stop shops.” —Mark Turner
“Understand your organization’s pain threshold. It’s important to think about how much change you’re introducing into both the acquiring and acquired organizations. Do you have the bench strength to be able to manage all of those various moving parts? And equally important, how are those moving parts going to come together? Carefully consider the impact of technology change—including on your colleagues.” —Michael Hemingway