Daily Archives: May 22, 2015

The First Four Questions to Ask During Any Mega-Acquisition

A recent guest post over on Spend Matters on Four Questions to Ask … During Any Mega-Acquisition was really good. These are becoming all too common and each and every one impacts your organization, often in negative ways.

But the post could have been better. More specifically, the questions could have been more direct.

To make sure that you understand the very important intent behind each of the four questions, SI is going to rephrase them in such a way that there will be no confusion.

1. How will we get screwed over on price?

Every acquisition brings with it the promise of economy of scale and lower price, but it typically takes years to understand overlap, redefine responsibilities and organizational boundaries, and identify staff reductions. And since, in the interim, change management experts, process consultants, and other resources need to be brought on board, overhead goes up and costs go up accordingly.

2. How will we get screwed over on quality of service?

The biggest fish in the combined company gets the best resources. And just because your current organization was a big fish in the old company, that does not mean your company will be a big fish in the merged company. Your company might just be a medium sized fish that gets the “B” Team, if it is lucky.

3. How will we get screwed out of innovation?

Will the merged company continue to develop the platform our company is on or will we remain locked in to a multi-year deal as the technology we bought withers and dies?

4. How will we get screwed in new and interesting ways?

What additional layers of complexity and confusion will the new, combined, legal team try to weasel into the contract and how will that bite your organization in its backside down the road?

Sometimes acquisitions are good, but mega-acquisitions often bring mega-problems and, at least in the short term, don’t’ end up being good for anyone.