Mergers, Acquisitions, and Assimilations – OH MY!

Suppliers today are faced with many challenges and decisions regarding their products and services. Consumers demands are pushing for more functionality tied directly to their line-of-business (LOB) applications rather than having to purchase from several vendors. As one person stated to me, “I want one place to go for the functionality I need and one throat to choke when it fails”.  The implication being that a single source provider is the preference, rather than several suppliers who may not be coordinated in their product road maps, creating potential issues when new revisions are released from one and unsupported by the other.

In December of 2018, I wrote an article about the acquisition of French based PeopleDoc by Ultimate Software (NASDAQ: ULTI), a leading provider of human capital management solutions. As fate would have it, I had an opportunity to talk with Adam Rogers, Chief Technology Officer at Ultimate Software about this acquisition and how the two organizations will bring their products together and assimilate their cultures. When it comes to the product, Rogers indicated that PeopleDoc was a partner and the alignment of PeopleDoc to HR was the right fit in relation to enhancing the product set with content management capabilities PeopleDoc offered. As such, buy made more sense than trying to build that functionality.

In relation to culture – having worked for a French content management company myself – I was curious how Rogers would approach bringing the two organizations merging-culturestogether. This to me seemed an interesting challenge given the 48 hours approach Ultimate Software uses in development to support the generation of new, innovative ideas for future products and product enhancements. Rogers cited that “both organizations have some overlapping similarities culturally, in that the employees are seen as and treated as the most valuable asset of the company – it is our People First mindset that Ultimate Software has maintained since its founding”. Rogers continues, “When it comes to PeopleDoc, there are 300 employees and the mindset is very similar, the key is to make them feel and be part of Ultimate Software, not like a third-party. Regarding the 48 hours methodology, and this aids in the assimilation of cultures, we leverage video conferencing to include the team in France in our meetings, allow them to share ideas, and present working prototypes for discussion. As a result, the assimilation process is much smoother and team building is much stronger.”

We will see many more mergers and acquisitions in 2019 and beyond, of this there is no doubt. As consumers demand more interoperability and transparence across their enterprise-wide applications, LOB suppliers will move to incorporate needed functionality into their offerings. The question then becomes one of how well they integrate the products and assimilate the cultures for the greater good of the consumer. Many mergers have taken place, yet their products and cultures are still disconnected. As Rogers stated in the conclusion of our discussion, “It is nice to have the technology as a check box item but to truly provide an integrated solution, it takes true partnership by placing your people first, understanding the customer experience, and working in unison to provide the best products and highest levels of service that meet the customers’ requirements.”

If you are working with suppliers who are merging, it is important to understand their product roadmap and how the products will integrate moving forward. It is also important to understand how their cultures will meld, for if there is a cultural clash, there is potential for slowed progress in future product enhancement, new product development, and less than average service.

 

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