After a merger, the purchasing department is not only confronted with organizational challenges, but also with huge expectations regarding the savings to be achieved. It is a question of enhancing the synergy potential. This unusual overall situation brings with it a whole series of sources of error and difficulties.

  • In M&A transactions, purchasing is often only involved in detail at a late stage – in the worst case, only after the transactions have been completed. Usually there is also no contract database available to provide information about the cost effect of possible changes in quantities or the impact of M&A activities on the contract and its conditions.
  • As the logic “higher volume = cheaper unit costs” has long since ceased to apply universally (in the IT field there are many examples of the opposite), a detailed analysis of a multitude of extensive contracts is fundamentally necessary (there may even be additional costs in exceptional cases).
  • In the course of M&A negotiations, there is often a lack of time or expertise to carry out a detailed calculation, in the form of a “purchasing due diligence”, of the synergy potential in purchasing resulting from the increased purchasing volume – the synergy potential is then estimated instead, and the savings targets land in the lap of the purchasing management, with all of the consequences of inaccurate estimates.
  • The uncertain prospects for the departments and employees concerned prevent open communication, which is essential for an appropriate grasp of the requirements.
  • Clarification of the internal structures and processes that are to be merged in order to make it possible to work. This also includes motivation of the employees who have been “taken over” or possible preferment for merged areas.
  • Rapid imposition of implementable procedures for renegotiation of contracts or introduction of corresponding internal guidelines.
  • Quick-search analysis (e.g. ABC analysis, base-lining market comparisons) of the existing contracts and within the cost structures in order to identify both potential risks and quick wins. The next part of the analysis consists in uncovering high cost savings potential in medium-term projects.
  • Imposition and control of specialist groups for the respective issues through support for prioritization and implementation.
  • Rapid management of the main workload in the transitional phase by a practice-orientated group of implementers, e.g. by rewriting contracts for new customers (especially in the area of software with its legal issues relating to licenses).
  • Organizational advice on developing clear structures and processes.
  • Support for the head of purchasing from a topic scout with technology and process experience, whose job it is to identify possible savings potential in connection with central internal purchasing decisions. In this way, numerous purchasing-related decisions in the area of IT can be made quickly and sensibly – but without the involvement of market expertise from purchasing, opportunities to cut costs are also missed.
  • Clear new structures:
    on the basis of our experience of the practical issues, we offer an “initial concept” which provides a basis for the work. This concept comprises an initial evaluation of the organization, the existing applications for supporting purchasing and the processes.
  •  Enhancement of the potential synergies
    Included in the Intero Consulting concept is not only rapid identification of the potential synergies on the basis of specific contract knowledge, but also their direct implementation by experienced consultants.
  • Reinforcement of the capacity to manage
    Direct support of the management means that it can devote its attention to strategic issues and the right decisions can therefore be made.