Mergers and acquisitions (M&As) are complex undertakings that require meticulous planning and execution to realize their full potential. One of the most critical aspects of an M&A is identifying and leveraging synergies between the two merging organizations. Traditionally, these synergies were identified through manual assessments and financial analyses. However, process mining offers a more data-driven approach to uncovering hidden efficiencies, reducing risks, and maximizing value creation during M&As.
Here's how process mining can be effectively leveraged in M&As scenarios:
1. Identifying Processes to Be Merged
When two companies come together, they bring with them a multitude of processes, systems, and workflows. The first step in achieving synergies is to identify which processes overlap and which are complementary. The starting point should not be systems, but processes, because the latter define how an organization operates to deliver products and services to its customers. Process mining technology provides a comprehensive view by visualizing the current state of all critical processes within the two organizations undergoing the M&A. By analyzing historical data, stakeholders can quickly understand which processes perform well, which overlap, and where inefficiencies lie, effectively identifying “positive deviances” to be replicated, and “negative deviances” to be minimized or avoided.
For example, a bank merging with another financial institution could use process mining to identify similarities in critical processes such as customer onboarding & KYC, loan processing, customer service and disputes management. The insights gained allow the bank to harmonize these processes, streamline operations, and enhance customer experiences.
2. Visualizing Current State with Process Mining
Once the critical processes are identified, process mining tools help visualize these processes in their current state. The transparency that process mining offers is unparalleled, enabling decision makers to assess the efficiency, variability, and performance of each process. Apromore’s platform, for instance, uses a no-code, user-friendly interface to generate process maps from data that detail every step, decision point, and handoff involved in each process. Moreover, it provides a set of dedicated capabilities to help “compare” multiple process variants and identify commonalities and differences.
The comparison can be carried out both on an aggregate statistical level (e.g. to pinpoint differences in frequency, duration or cost in the overall process) as well as on a flow level, by identifying different activity orderings and pathways of a process that are specific to one organization and not the other, or for the paths in common, how they different in frequency, duration and cost between the two organizations.
The analytics aid in understanding how the two organizations’ processes interact, where they align, and where potential conflicts might arise. They also help in identifying best practices from each company that can be combined for optimal performance post-merger, to build a “best-of-breed” approach.
3. Analyzing the Process Variants for Inefficiencies
The next step is to conduct a thorough analysis of the discovered process variants to identify bottlenecks, inefficiencies, and unnecessary steps. For example, during a merger of two manufacturing firms, the process mining tool could highlight delays in the supply chain caused by redundant quality checks or outdated approval workflows. This data-driven insight enables the merging entities to redesign the process flows, eliminating delays and reducing costs.
4. Simulating Merged Processes
Before fully integrating a given process between two companies, it is crucial to simulate potential scenarios to foresee the impact of the merger on day-to-day operations. Apromore offers simulation capabilities to assess the outcomes of merging identified processes. For example, users can simulate different “what-if” scenarios to test the effectiveness of combining two process variants into one.
This simulation allows companies to anticipate challenges such as resource allocation conflicts, procedural policy incompatibilities, or delays due to increased workload. By addressing these challenges before the merger is finalized, companies can develop strategies to minimize disruptions.
5. Continuous Monitoring and Optimization Post-Merger
Mergers are not static events; they require continuous evaluation and adjustment to achieve the desired outcomes. Apromore’s monitoring capabilities support this ongoing optimization by providing regular insights into the performance and compliance posture of merged processes. It allows organizations to monitor key performance indicators (KPIs) in real time, trace performance trends over time and identify performance and compliance anomalies as soon as they arise.
For instance, post-merger, an organization might discover that certain compliance checks are still causing delays. Apromore’s platform can provide real-time notifications and detailed root-cause analysis to help the organization fine-tune these processes, ensuring regulatory requirements are met without hampering efficiency.
Example in Energy & Utilities
Apromore played a pivotal role in supporting a large multi-utility company during its M&A initiative. The process mining platform was used to analyze key customer-facing operations, like meter-to-cash and customer service management, as well as back-office functions such as procure-to-pay and infrastructure incident management.
The processes to be merged were first examined independently across both the acquiring and merging entities, before being compared for alignment. Key differences were identified and classified as critical or non-value adding. For the critical distinctions to be retained, Apromore's simulation capability was used to evaluate their impact on the unified processes, ensuring smooth integration. The non value-adding differences were simply removed.
From this analysis, a best-of-breed process was crafted, rigorously tested across varying volumes of demand workload conditions to define the optimal resource allocation for the new, combined system. Ultimately, this led to an overhaul of the organizations' internal policies and operational guidelines to seamlessly run the merged processes.
Conclusion
Leveraging process mining in M&A activities is no longer a novel idea but a strategic necessity. It provides a data-driven foundation for identifying synergies, visualizing current states, analyzing inefficiencies, and continuously optimizing processes. By integrating process mining into M&A, organizations can ensure a smoother transition, reduce risks, and accelerate value creation.
Apromore’s platform, with its robust process mining and compliance management capabilities, offers a suite of tools that are particularly useful in the context of M&A. The platform’s unique features, such as variant comparison, digital twin simulation, continuous monitoring and compliance management provide a powerful framework for organizations to manage their processes more effectively during M&A. By using such tools, organizations can move beyond traditional merger strategies to achieve a seamless, data-driven integration that maximizes the value of their newly combined entity.
Contact us today to learn how process intelligence can be a strategic resource for organizations needing to optimize their processes during M&As.
