Sep 11, 2020

Widen: digital asset management – the secret sauce for M&A

Widen
mergers
Acquisitions
M&As
Georgia Wilson
6 min
Mergers and aquisitions
Jake Athey, VP Marketing and Customer Experience, Widen discusses the importance of digital asset management for mergers and acquisitions (M&As...

According to Statista, the United States represented the largest M&A market worldwide in 2018, with deals amounting to upwards of $1.6 trillion. Whether it’s T-Mobile buying Sprint Corporation, the Walt Disney Company joining forces with 21st Century Fox, or Dell and VMware becoming one entity, buying another company is no mean feat. It takes months, if not years, of manoeuvre. Blood, sweat and tears shed over brokering lucrative deals. Red tape to cut through, politics to navigate and negotiation skills flexed. 

Naturally, most corporate mergers and acquisitions take place behind closed doors, after protracted discussions and secretive planning. But a signature on the dotted line doesn’t necessarily guarantee success. It’s what happens after the deal has been done, and the merge of multiple departments, product lines and cultures has been set into motion that governs the success of M&A activity. 

Post-merger or acquisition, the role of the marketing team and the tech tools it has at its fingertips can significantly impact how smoothly and effectively the two companies come together. While this is, of course, one of many factors that impact the outcome of a successful merge, here we explore just how and why the effective use of marketing tools and the empowerment of marketing teams can play a positive role. 

The Quaker Oats-Snapple snafu

In the mid-1990s, American food conglomerate Quaker Oats set its sights on a new venture – snapping up bottled drinks company Snapple. It was perhaps, on paper at least, a sensible move. Up until that point, the food company had successfully grown the Gatorade brand under its umbrella. Yet, after overpaying significant sums to acquire the company, it would relinquish ownership and sell Snapple to a holding company for much less than it had originally paid, just 27 months on. 

One of the major mistakes that Quaker Oats had made in its acquisition was its strategy in running the company as one entity, with the Snapple product portfolio firmly under the Quaker Oats umbrella brand. This included a poor sales strategy and some rather half-baked advertising and marketing tactics that didn’t take into account brand sensitivities or customer preferences. In a drinks market dominated by the likes of PepsiCo and the Coca-Cola Company, unfortunately Quaker Oats had bitten off more than it could chew with Snapple

Culture shock

But Quaker Oats isn’t the only offender when it comes to M&A faux-pas. If you look at any less successful mergers and acquisitions, you’ll see a common theme. Poor integration between departments, culture clashes and teams that simply don’t work together. The bigger the company, and the larger the product portfolio, the more these issues can be exacerbated without the right management team, tools and strategies in place to steer the ship. 

If M&A activity was difficult before the COVID-19 pandemic, it’s certainly a lot trickier now amid global economic uncertainty and fragility. According to a recent survey by Harvard Business Review, just over half (51%) of C-Level executives have put any M&A aspirations on ‘temporary pause’ in order to assess market recovery. While COVID-19 has slowed down the M&A ambitions of many 

businesses, 2020 has already seen a surprising amount of activity in this area, despite the financial landscape, with many businesses stating their openness and intent to explore this avenue for growth. According to Statista, between March and June of this year, the total value of M&A transactions in the US market totalled approximately $115 billion. 

Mergers and acquisitions are a key stimulant for the global economy, and for individual sector development and evolution. But no one wants a repeat of the Quaker Oats-Snapple snafu. More than ever, M&A has to be carefully navigated, from the moment the deal is done, through to the once-separate parties coming together to form a force to be reckoned with. But there is luckily a way to avoid similar snafus for companies on the brink of realising their M&A ambitions. 

Enter DAM

As we explored in the Quaker Oats-Snapple example, sometimes the poorly managed sales and marketing efforts of the acquiring company can spell disaster for the success of the acquisition. So, arguably, the marketing team plays a more important role in breaking down cultural issues and department siloes, streamlining product lines and promoting a brand effectively to target audiences. 

If we continue with the Quaker Oats-Snapple example, both companies had multiple product lines under their belts. When bringing numerous brands into a single corporate entity, things can get messy quite quickly without the right tools to keep track of brand information, logos, rebranding, imagery and so on. However, digital asset management (DAM) platforms can bring all of this information together so that the new marketing team knows exactly what to promote, and where, in appropriate geographies, and with the correct information and imagery. 

Control during change

How does a DAM solution work? Essentially, it’s a central repository for all digital assets on product lines and brands. These digital assets – whether it’s brochures, videos, logos (old, transitional or new), product images, audio files and much more – are stored, organised and controlled from one place. Team members can search and share assets on demand, and repurpose them for use across multiple channels, including print, TV, web and mobile. 

Essentially a DAM system empowers teams to safely distribute the new brand – through curated sets of assets and permissioned access – and provides control regarding how and when brand assets should be used. DAM ensures that brand guidelines are always adhered to, and asset performance can be analysed through a dashboard, revealing the files that are used the most frequently across departments and channels, and how customers engage with them. 

What’s more, DAM tools can assist with creating clear, on-message communications on existing and new products/brands, which is particularly important in a period of change, when there might be some fear associated with how a merger/acquisition should be communicated internally and externally. Communication can be segmented by business group, location, department or geography to allow the right information to reach the right stakeholder, through governance and permissions. This approach saves everyone the time and pain associated with the potential risk of using the wrong information in the wrong way. Reducing crossed wires or mixed messages. 

A lot of ingredients go into preparing and pulling off the perfect merger or acquisition. Many business leaders focus on the bigger picture elements – the financials, contracts, negotiations – but often overlook some of the smaller cogs in the bigger machine that are actually integral to the smooth running of an organisation. Let’s learn from M&A mishaps, and recognise the positive, make-or-break impact that technology platforms like DAM solutions can have in the modern business world. Or else run the risk of becoming the next history lesson for students at business school. 

For more information on business topics in the United States and Canada, please take a look at the latest edition of Business Chief North America.

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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