Achieving acquisition targets with agile principles

by admincf | Jun 10, 2025 | Insight, Newsroom

The agile nightmare of Paul M.

Paul was convinced: this time everything will be different. No rigid Gant charts, no endless Excel spreadsheets, no yesterday's waterfall logic. His PMI project - a medium-sized but politically sensitive merger - would be agile. With daily stand-ups, backlog grooming and, of course, reprioritization “on the fly”. Paul was reading Scrum for Dummies when the first topic came up.

The integration of the sales team, actually a “top priority”, was postponed - “because finance is shouting louder right now”. Two weeks later, HR postponed the onboarding process “because the target system is not yet connected”. And when Paul realized in Sprint 3 that neither team knew what the other was working on, he decided to turn the retrospective into a crisis meeting.

The only thing that moved regularly was the priority list. Instead, the timeline remained constant: late. Paul smiled bravely through the daily chaos, clinging to agile manifestos - and secretly wished for nothing more than an honest, old-fashioned project plan. With milestones, deadlines and please, please: clarity about who has to do what and when.

Agile is good. But maybe not here? Not right now? Not like this?

Agile project principles - beyond post-is and stand-ups

Agile project principles and, in particular, frameworks such as Scrum are not just tools or methods. They are thought models. Their foundations include the three pillars of continuous improvement: transparency, review and adaptation; the Agile Manifesto, the twelve agile principles and the five Scrum values: commitment, focus, openness, respect and courage.

These principles and values form a flexible framework for how (software development) projects can be implemented. Two central ideas underpin them. An iterative-incremental approach in order to be able to better absorb changes and external influences, and a focus on customer value to deliver results with the highest added value.

The agile framework includes the roles of Product Owner and Scrum Master, the artifacts Product Backlog and Sprint Backlog as well as the events Sprint, Daily Scrum, Sprint Review and Sprint Retrospective. However, the concepts that originally came from software development should not simply be adopted unchanged. They need to be translated into the context of mergers & acquisitions and post-merger integration.

Integration backlog - what really counts

What is to be achieved? In software development, this central question is usually answered in terms of customer value. But who is actually the customer in a post-merger integration?

In a project as complex as a post-merger integration, there are not only many, but also very different customer groups. To avoid confusion, it is better to speak of stakeholders. These include the usual suspects: Owners, employees of both companies (including management or board members), (regulatory) authorities such as tax offices, suppliers, financiers and, last but not least, the companies' “real” customers.

There are indeed many of them, which explains why post-merger integration is considered so complex. Different stakeholders have different needs that need to be taken into account. Accordingly, the integration backlog quickly fills up with a wide range of housekeeping objectives as well as deal-specific value creation objectives.

The integration backlog does not contain the individual action steps. Instead, it lists the objectives that are to be achieved. Goals that can be clearly derived from the needs of the stakeholders. If these needs are prioritized, the entries in the integration backlog can also be prioritized accordingly.

This prioritization is usually based on predefined milestones, such as reporting obligations, trade fair appearances or the goals from the deal story. And: this prioritization is not universally valid, but always situation- and acquisition-specific.

The integration backlog already contains a large number of “must-dos” on day one. The good news is that they do not all have to be completed immediately. In many cases, a phased approach of First 10 Days, First 30 Days, First 100 Days, Beyond 100 Days has proven effective for quick clustering and implementation focus.

The integration backlog is not a static document. This aligns with one of the basic principles of agile project work. Items can be added, removed or reprioritized during the course of the project. The original weighting can also change over time. The advantage of this thinking model for complex post-merger integration is that you can start quickly and go straight into implementation, without having to plan everything down to the smallest detail beforehand.

Integration Sprint - Or is it a marathon?

Classic post-merger integration is more like a marathon than a short-distance run. It is not uncommon for 18 months or more to pass before an integration is fully completed. Perhaps post-merger integration should even be compared to an ultramarathon, with distances of 100 kilometers and more.

The idea of achieving results and celebrating small successes at short intervals is just one of the considerations behind the integration sprint concept - but it is a particularly central one with regard to the principle of “growing together by coming together”. This is because the first fruits of the joint work become visible after a short time, rather than after many months. In this way, people and organizations grow together step by step.

An integration sprint usually lasts two to four weeks. The exact duration is determined in advance. And this is precisely where another advantage of the approach becomes apparent. This manageable period is much easier and more reliable to plan. In contrast, planning across six, nine, or even twelve months is far more time-consuming and significantly less precise . The use of available resources - especially internal resources - can also be better estimated and managed more efficiently within this short time frame.

In this way, joint activities can be implemented more quickly. The high level of short-term planning certainty means that there are fewer deviations from the plan, which in turn increases satisfaction within the integration team. And once again, the team grows closer together.

During an integration sprint, the team members can concentrate fully on the issues at hand and deliver concrete results. Requirements and priorities remain constant during this phase. And thanks to the brevity of the sprint, new prioritizations can wait until the next sprint without disrupting ongoing work.

The central elements of an integration sprint are the integration review and the integration retrospective at the end of the respective sprint as well as the integration daily, which, as the name suggests, takes place every day.

Integration review - more than just ticking boxes

Transparency and feedback are key principles of agile projects. They are systematically embedded in the integration review. At the end of each sprint, the team members report on what they have achieved. The PMI owner and the stakeholders provide feedback on the results presented.

In this way, the “customers” of the integration are regularly involved and remain informed about current issues and progress. The integration team receives valuable information on whether the integration is progressing in the right direction, whether the results achieved meet the expectations of the stakeholders and whether integration may have gone too far or not far enough.

The high frequency of the integration reviews ensures that all participants stay actively engaged in the integration process. The substantive evaluation of the results prevents pure task tracking - a typical pitfall of classic large-scale projects, where the focus is merely on completing tasks without questioning the content of the results. New or additional requirements are also identified in the integration review and added directly to the integration backlog if necessary.

Integration Retrospective - Internal Only

In addition to the “external” format of the Integration Review, the Integration Retrospective is an “internal” event. It is aimed exclusively at the integration team and also takes place at the end of each sprint. Put simply, two central questions are reflected upon. What went well in the current sprint? And what should be improved in the next one?

This is not about the work results but about collaboration within the team. The focus is on how we deal with each other, communication and cooperation within the integration team. Another important dimension of the retrospective is the interaction with stakeholders and other people outside the team. Did the integration team have sufficient opportunity to focus on the relevant topics or was it too distracted by outside influences?

This is where the Integration Master and the PMI Owner come into play. They are responsible for creating the necessary framework so that the team can work effectively.

The Integration Retrospective not only serves to improve the operational aspects of project work, it also promotes cultural understanding between the organizations involved. Open discussions about collaboration naturally bring cultural differences to the surface. By regularly discussing these differences and jointly considering how to deal with them, cultural integration emerges as a by-product.

Integration Daily - Every day!

That brings us to the central element Integration Daily. As the name suggests, it takes place every day. It is a short coordination meeting of the members of the integration team. The goal is to create transparency. Everyone knows what the others are currently working on. Dependencies are uncovered and clarified, obstacles are identified and necessary support can be requested.

Especially in the early phase of integration, in preparation for Day One and in the first few days afterwards, it is highly recommended that the Integration Daily is held daily. Unplanned or unforeseen challenges always arise in this phase, so this brief coordination brings a noticeable gain in effectiveness.

As the project progresses, the frequency of the Integration Daily can be adjusted, for example to two or three times a week or, if there is less need for coordination, to an Integration Weekly. Especially after the first 100 days, when the team members are no longer predominantly involved in the integration work, the rhythm of the daily meeting should be adapted to the respective course of the project.

PMI Owner - One for all

Every integration needs someone who understands its value and takes responsibility for its success. This is the role of the PMI Owner. Managing directors or board members with operational responsibility are often appointed to this role as project managers for post-merger integration. While this is possible, in practice, the limits of this approach quickly become apparent.

In the agile world, the product owner - in our case the PMI Owner - is the person who keeps an eye on the business perspective of the project. In the context of post-merger integration, this means aligning integration efforts with the corporate strategy and acquisition goals, and vice versa. The PMI Owner thus establishes the link between the integration activities and the overarching strategic vision of the acquisition.

Accordingly, the PMI Owner is also responsible for prioritizing the integration backlog and defining the sprint goals. These are based on strategic requirements, acquisition targets and external milestones, such as reporting obligations or regulatory deadlines.

During a sprint, the PMI Owner is available to the integration team as a sparring partner to quickly clarify open questions. This has the advantage that the team does not have to wait for feedback from steering committees or other escalation rounds. This keeps the sprint focused and efficient.

However, this requires the PMI Owner to be constantly available for the integration team. And this is precisely where a conflict of objectives arises: the managing directors with operational responsibility are always heavily involved in day-to-day business, making it unrealistic for them to be constantly available. This is why the idea of using these managers as PMI Owners often falls short in practice.

Integration Master - the real PMI experts

Alongside the PMI Owner, who maintains the link to the corporate strategy and the acquisition targets, the Integration Master(s) serve as the central experts for post-merger integration. They know exactly what it takes to ensure a successful integration and are familiar with the typical housekeeping issues that need to be addressed.

Integration Masters are facilitators, transformation agents, moderators - and sometimes also mediators. They network the various workstreams, remove blockages within the teams and ensure smooth collaboration across team boundaries. While the PMI Owner primarily focuses on the “outside world” beyond the integration team, the Integration Masters are operate within the team, acting as a driving force and providing hands-on operational support.

Last but not least, they play a central role in cultural integration. Their experience from numerous post-merger integration projects and other transformations makes them key figures when it comes to bringing different corporate cultures together.

Agile in post-merger integration?

Yes - but only if it makes sense. Not because it's currently “hip”. Agile is not a panacea. However, the sprint principle helps to maintain focus and use the available resources effectively, especially in projects of the caliber of an ultramarathon, as post-merger integration often is.

If the values of the Agile Manifesto are applied to post-merger integration, the following picture emerges.

Individuals and their interaction take precedence over processes and tools. This is precisely what encourages people from both organizations to grow together. Former boundaries are overcome - a new, joint organization begins to shape.

A functioning organization is more important than extensive process documentation. The focus is on genuine collaboration and functionality within a (new) organization, not on appearances and shadow processes.

Alignment with the corporate strategy and the acquisition targets takes precedence over merely creating project plans. Integration is not carried out as an end in itself ; it is a critical driver for achieving the acquisition goals.

Responding to changes is more important than rigidly following a plan. The ultimate goal is a resilient and sustainable new organization that not only achieves the initial targets but continues to evolve.

The formal agile elements - from clear objectives in the sprint and the Integration Daily to the Integration Review and Integration Retrospective - create a structured framework that also leaves room for focus and adaptability. PMI Owners and Integration Masters ensure that this framework is adhered to and remains effective.

The Role of IT in Buy & Build Projects

by admincf | May 2, 2025 | Insight, Newsroom

Fairy tale hour with system jam

The hare sprints — but the hedgehog is already at the finish line. The hare is not only completely out of breath but also beside himself with anger. “I don't mind,” says the hedgehog, “I'm already here.” So the whole game is repeated seventy-three times. But on the seventy-fourth attempt, the hare doesn’t make it to the finish line.

We know the story — it may sound like a fairy tale, but it’s still true, at least according to the Brothers Grimm. There are only a few buy & build cases in which 74 add-ons are actually integrated. But what if IT isn’t the hare this time, but instead takes on the role of the hedgehog?

IT in Buy & Build: The Underestimated Bottleneck

In most cases, IT is not involved from the outset when the target company is turned upside down during the due diligence process — even though IT plays a significant role in value creation, especially in the financial services sector.

How often is IT excluded from management presentations because they ask critical questions? Because they inquire about the budget for IT integration? Because their bulletproof migration plans might delay the entire deal?

Then comes Day One — and there is no plan for IT integration, no budget for the necessary data migration, and no additional capacity to handle the required effort. “That can wait. It's not that urgent.”

A few months later, disillusionment sets in. The acquisition goals have not been achieved. The anticipated cross-selling has failed to materialize. Access to products and customer data remains cumbersome and time-consuming.

Why is that? When interfaces are poorly defined — or not defined at all — the data doesn’t match along the process. Information must be entered twice, three times — or seventy-four times. This becomes a breeding ground for shadow IT.

This isn't just inefficient due to excessive duplication and reduced quality. It also leads to ineffectiveness, missed opportunities for innovation, and delayed product launches. In short: a loss of added value. Welcome to the fairy tale forest of lost integration opportunities.

What IT Could Do If You Let It

Let’s start with a classic no-brainer: data harmonization can begin before closing. No data needs to be exchanged — which is usually prohibited by regulation anyway — but it is possible to align on formats and requirements for the data sets and prepare existing information accordingly.

Starting early not only means being ready sooner, but also results in less duplication of work later on. From the moment of alignment, new data can be entered “correctly” from the start. This immediately frees up capacity for activities that create real value — for example, additional cross-selling activities.

The voice of IT is often critical. That’s true. And the word “unfortunately” is deliberately omitted here. IT is responsible for digitally supporting and automating complex processes — as quickly, smoothly, and error-free as possible.

To achieve this, IT must inevitably pay attention to detail. IT needs a special eye for exceptional situations — even if they rarely occur. But sooner or later they will, usually without warning.

This critical mindset should not be demonized. IT — in the role of advocate diaboli — identifies stumbling blocks. And if you let them, they will develop solutions to remove those obstacles in good time.

An IT department constantly in firefighter mode is busy fixing problems that have arisen and cleaning up afterwards. What’s often missing then is the time to calmly develop viable solutions to complex challenges.

Creative hacks can’t be forced — and certainly not rushed. Sometimes it’s enough to give IT an extra week and the freedom to devise a thoughtful, sustainable solution. In the end, this usually saves both time and money.

If employees are already electronically connected on Day One, this significantly enhances collaboration. Anyone can find and contact anyone — across locations and company boundaries — thanks to email and video conferencing.

The prerequisite, however, is that contact details are easy to find. If you have to hunt for email addresses in the target company, you might not get invited to the meeting at all.

Mutual access to intranets also supports cultural integration. It offers insights into the “others”, allows differences to be perceived and shared values to be discovered.

IT can build bridges between old and new. Much is possible — if you involve them early and give them the necessary freedom they need. So far, this applies to any integration.

Buy & Build Needs Built-to-Buy

Buy & Build can only reach its full potential on a sustainable platform. This requires a powerful organization with efficient, stable processes — which, in turn, depend on a solid IT foundation: a modular, scalable IT application landscape.

This calls for preparation — and, above all, the early integration of IT into the strategic planning of the Buy & Build strategy. If IT is not built-to-buy, this foundation on which everything else depends is missing. Even the most creative platform architect cannot build a resilient structure in this case — only a fragile conglomerate that will eventually collapse.

If the goal goes beyond “more of the same”, scalable processes alone are no longer sufficient. That’s why it’s critical to consider modularity from the very beginning. How can AI agents take over core processes if the underlying data isn’t consistent? For example, if boreholes are measured in centimetres in one company and in inches in another?

IT that is deeply embedded in business processes and has a strong understanding of the business, can unlock additional synergies — not just to boost efficiency, but also to enable growth and innovation.

A built-to-buy IT department knows its application landscape inside out — and also has control over modifications and extensions. If the hedgehog hadn’t known the map, how could it have reached the finish line before the hare?

The Hedgehog Is Not a Know-It-All. He Just Started Earlier

IT is not slow — it is thorough. Who wants an invoice showing the wrong VAT rate or a customer receiving the wrong delivery just because both recipients happen to be named Meyer?

One possible solution for the role of IT in Buy & Build projects lies — quite fabulously — in Buxtehude. The fairy tale “Dat Wettlopen twischen den Hasen un den Swinegel up de lütje Heide bi Buxtehude” (Brothers Grimm, 1843) offers the idea: How can the hedgehog always be at the finish line?

Quite simply: it is in both places at the same time. One part of IT ensures the stable operation of existing systems (“run the platform”), while another part actively develops the platform and is involved in M&A transactions from the very beginning (“build & integrate the platform”).

Regular exchanges between these two teams are essential. Only then can they learn from one another and continuously improve the platform. “...and they both went home happy with each other: and if they didn’t die...”

In Buy & Build Projekten entscheidet nicht die Geschwindigkeit des ersten Zukaufs – sondern die Konsistenz des vierten. Wer bis dahin keine belastbare Plattform aufgebaut hat, rennt zwar mit hoher Geschwindigkeit – aber eben im Kreis. Und bricht irgendwann erschöpft zusammen.

And IT?
They were already there —
if you ask them in time.

Artificial Intelligence in Post Merger Integration

by admincf | Mar 30, 2025 | Insight, Newsroom

Post Merger Integration on the beach

pmiGPT: Good morning, Peter, how can I support you today?
Taking into account the milestones of our latest target and considering your email communication on the closing conditions, the closing should take place in the next few days.
Shall we have a look at the plan for Day One?

Peter: Please provide me with the complete schedule for Day One. Consider our usual procedure and also look at the latest discussions with the target's works council.

pmiGPT: I'll get straight to work, boss.
…

Peter: Oh, I almost forgot – I’ll also need the scripts for the speeches, the presentations and my moderation cards with the key points.

pmiGPT: Of course, as soon as I have the schedule ready, I'll get right on it.
…

As Peter sips his cappuccino, he thinks about the fact that his avatar could actually handle the job on Day One – allowing him to extend his workation by another three days...

Science fiction or soon to be reality?

Back to reality. For now, these are still just dreams.

Although artificial intelligence is already used in one in five M&A transactions (BAIN, M&A Insights, March 2025), its large-scale application primarily focuses on the transaction process — specifically, the phase before signing. After signing or closing, AI usage remains limited today.

Setting aside the fact that an avatar on Day One might help Peter optimize his personal work-life balance, it certainly doesn’t contribute to building goodwill with new employees.

Artificial intelligence is already significantly reducing manual effort in many areas. Generative AI unlocks entirely new possibilities and will become even more influential in the months and years ahead.

The scenario from the introduction is still futuristic. How long that remains the case largely depends on creativity and the willingness to experiment. Technology must be embraced to drive progress — and the first step is to start experimenting.

To make that process a little easier, I’ll share some use cases and ideas here. I won’t bother with the obvious no-brainers, like having written communication proofread or generating custom images to support messaging.

Supplier Screening Support

Wherever there is data — preferably large amounts of it — artificial intelligence can be leveraged effectively, delivering significant efficiency gains. This is why it has been widely adopted, particularly during the transaction phase, with a strong focus on due diligence.

We can feed the AI with all supplier contracts and have it identify “critical” passages. This not only saves us the time we would otherwise spend reading but also allows us to focus immediately on the AI-prioritized “red flags.” For example, we can mitigate risks through the change-of-control clause. After all, no one wants to hear from their suppliers: “It was nice having you as a customer — until yesterday.”

Similar approaches work in any area with numerous contracts or large volumes of data. In sales, this applies to customer contracts; in HR, to remuneration agreements, and much more. Of course, data protection and GDPR compliance are ensured, provided that key principles are followed when selecting the AI model, the place of hosting, and configuring various AI settings.

Reorganization – Ready on Day One

Now, let’s take a step into the future. Following the acquisition, the accounting departments — I like this traditional term; it fits well into our modern discussion — of both companies are set to merge. This isn’t just about consolidating a location and a management level; it’s also about modernization — introducing agile processes and increasing efficiency.

There are countless articles on this topic online, along with best practices from large, mid-sized, and small consulting firms. So why not feed all these organizational charts and concepts into our pmiGPT? We can also include the current organizational structures of both accounting departments, along with growth plans for the coming years. And, of course, we won’t forget to incorporate other relevant framework conditions.

Then, pmiGPT will generate suggestions for the structure of the new accounting department — including a detailed description and an analysis of the respective advantages and disadvantages. In a single step, it will optimize management spans and, who knows, maybe even consider the team members’ star signs — for particularly energetic collaboration.

When employees arrive at the office on Day One, they’ll find themselves standing in front of a large table displaying the new seating arrangements — almost like a wedding reception.

Phew! Maybe that’s a bit too much automation and top-down decision-making. But some of these approaches significantly boost efficiency and are no longer just a futuristic vision.

Avatars for accounting standards

After our journey into the future, let’s return to what’s already possible today. On Day One, Target employees face a lot of new information — from parking and canteen use to booking meeting rooms and understanding the buyer’s accounting standards.

Of course, all of this could be documented in a traditional how-to guide. But that approach feels outdated. For years, learning content has been delivered through videos featuring someone reciting the information. AI can already do this much more effectively.

Let’s have an avatar deliver the training. With AI-driven learning, it can even use pedagogical techniques to make the content more engaging and easier to absorb. Digitalization offers countless possibilities — documents and videos can be searched or tailored to specific target groups.

But this is just the beginning. If something small — or even significant — changes, the avatar can update the content with a single click. In the past, this would have required reshooting and editing an entire video.

Here, AI not only enhances efficiency and effectiveness but also improves quality at the same time. The best part? This isn’t a vision of the future — it’s already a reality. And who knows, involving people from both organizations in the avatar creation process might even become a key step toward cultural integration.

Making cultural differences visible

Cultural integration — the key term for our next use case. At the core of cultural integration — and here, “integration” does not mean assimilation — is the mutual recognition of differences. The famous elephant in the room needs to be brought into the spotlight.

In the past, this required extensive processes. First, surveys; then, data analysis; and finally, workshops with mixed teams from both organizations. The outcome was a visualization of cultural differences.

A complex process that not only takes time but can also only begin after Day One. And with all the urgent tasks that need to be tackled after Day One, cultural integration often takes a back seat.

Culture is particularly evident in communication — on websites, in job postings, in external and internal content (aka posts), and even in emails. So why not feed this data into an AI and let it analyze the cultural differences? This technology has been available for some time and is already being used in other areas.

This provides a starting point for discussions within teams and among managers — meaning cultural integration is already underway. All without requiring extensive time from employees and, most importantly, without delay.

Culture Clash Meter

Once we have analyzed cultural differences with AI and then refined them through input from those involved, the first step is successfully completed.

Going forward, it’s especially important to recognize when discussions in meetings or conversations shift into the cultural realm — often at the expense of constructive dialogue.

In larger meetings, moderators are often brought in to oversee discussions. With their experience and a targeted briefing, they ensure conversations stay on track and intervene when cultural differences lead to unproductive exchanges.

Today, bots are already recording numerous meetings. If AI can analyze cultural differences, it will eventually be able to detect them in real time — or at least with minimal delay.

Now, we let AI calculate an indicator. The more frequently cultural misunderstandings or culturally driven discussions arise, the higher the value climbs — and it decreases as these instances become less frequent. This creates the Culture Clash Meter, a tool that can be used in every meeting, video call, phone conversation, or face-to-face discussion.

Integration Path Optimization

Last but not least — even if the scenario from the intro isn’t reality yet, we can still hand over the plans of all individual workstreams, functions, or teams to AI for analysis. By supplementing these with relevant topic details and overarching milestones, we create a more comprehensive picture.

This enables AI to identify dependencies that we previously mapped out manually. The insights provide teams with valuable input for discussions and collaboration — an essential step in growing together and ensuring the success of post merger integration.

The road ahead

How far are we from AI not only creating the post merger integration plan but also detailing every step — what needs to be done, when, and by whom? And how long until it takes over these tasks entirely, just like the avatar delivering the Day One speech?

Generating such a plan might take hours, maybe even days — but what is that compared to 100 days of integration or even three years to finalize every detail?

Today, we are still far from this scenario. However, AI already offers numerous opportunities to enhance post merger integration. The maturity levels of these use cases vary, and the full potential of AI in this field is far from being realized.