A domain model for mergers and acquisitions will save us.

The clash of domains

Two companies shall be merged. Two workforces and two administrations have to be aligned, changed and integrated. The first problem that comes up is corporate language and a missing joint domain model and integration plan for people involved but also for applications, companies, locations and countries.

Domain models

Domain models are semantic models that show objects and their relationship in a specific domain. For the M&A domain there will be representations of the M&A strategy, the business case, the integration plan and of course, of both companies to be merged. In addition we need a model of the integration project and all the tasks to be carried out in the different phases of the M&A process. The domain model does not only cover company data, but also data about the M&A process, the involved people and other attributes of the integration like goals and objectives and how they are measured.

Mapping out phases and tasks in the M&A process

Soon , the PMI workgroup of the German M&A association will publish a reference model for all tasks in the M&A process. Here is a short preview of what will be included:

• Phases: are part of the M&A process like a due diligence phase or the phase between sign and close.

• Tasks: describe the activities to be carried out during the M&A process. Plus there will be goals and objectives for each task that steer the execution of the tasks and measure success.

• Concepts: Describe the domain data of the different companies, like companies, departments, the project management domain

Wow, that might be a lot of data types to be modeled, how can you ensure consistency? It all comes together on a task level. Tasks are executed to transform companies to reach an end state, called goal. Goals and objectives will be different by merger and companies involved.

In our case the goal is that the organizations are integrated. Success is measured with two objectives: integration success is maximized and risk is minimized.

task:             execute_merger_integration_project

phase:            merger integration

goal:             buyer and target organizations are integrated.

objectives:       integration success is maximized, risk is minimized.

task description: Resources for the project will be allocated.

                  and the integration project will be executed.

concepts:         target, buyer, organization, budget, project plan, resources

Domain model APIs foster integration of tool vendors

Domain models can be used to drive transparency in the heterogenous world of M&A tools. Tool vendors can easily show the coverage of tasks within the domain model

The description of phases, tasks, concepts, goals etc. will be formalized and can be easily used to generate API descriptions that could be used to integrate different tools in the M&A process like data rooms, project management tools etc. So stay tuned for more progress.

In past years, there always was a dichotomy: either companies were only on premise, storing their crown jewel data on site, or companies ran certain applications in the cloud. Now, hybrid clouds are on the rise.  This means there are three options now.  

In M&A, data rooms are typically private cloud based storage of highly confidential data during due diligence. Data from other phases are usually stored on site. With all these changes happening and the clear need to manage M&A processes,  where should company store their data about  all phases of the M&A process ?

On premise?

The safest way to store mission critical data is to store them on premise.  locked up.  This is perfect for a the early phases. As soon as more people get involved from inside and outside the company, during due diligence and post merger integration, this approach is not perfect. 

in the cloud? 

Cloud storage makes perfect sense for trustfully giving restricted access to people from different companies. For most companies, this is needed during due diligence and following phases. But many companies also interact with third party companies even before due diligence. 

Requirements for M&A process tools

Customers rule. An end-to-end process tool must respect that. No matter if  customers choose on site, private cloud or public cloud, vendors of end-to-end process tools should give customers a choice. The customer should decide where to store data. 

While we are used to physical robots vacuuming our homes, software robots are not in widespread use yet. The term used for software robots is robotic process automation. (RPA)

What is RPA? 

RPA is defined as tools to build automation for everyday tasks and processes  on a computer screen using Software Robots.   This can start with a simple sequence of clicks on the screen that you can replay automatically. But RPA can also cover more complex workflows with decision points. RPA  tools usually contain a recorder that tracks  certain work sequences on your computer screen and can replay it this sequence later.

What is RPA combined with machine learning? 

Recording workflows with current RPA tools is a manual process. If combined with machine learning, a digital assistant will track your online work and will propose automation of routine processes you do every day. This will lead to a step by step increase of the level of automation in processes.

How does RPA help in M&A processes?

 It frees up time to focus on the really important topics instead of routine tasks  and sequences of clicks on a computer screen.