The Value of Project Portfolio Management in M&A

Corporate mergers and acquisitions have the potential to be high-visibility, high-dollar endeavors. Executive teams and their project management consulting partners often work closely in these transactions to understand what’s happening behind the scenes in their target company and where risk and opportunities may exist.

M&A

Whether one organization wants to completely absorb another or two businesses seek to blend their operations equally, the right project portfolio management methodology can deliver significant value in revealing areas of concern and assessing other important factors that feed into the decision-making process.

A portfolio-level view enables you to gain a thorough understanding of each company’s portfolio scope. It’s not uncommon for companies to have so many projects in flight that no one group has a complete list of everything that’s active as well as any initiatives still coming up through the pipeline. That lack of insight can create big problems in an M&A environment, where even risky and highly impactful projects could potentially fall through the cracks if no one’s keeping a close eye on things.

The discovery process in an M&A scenario is wide ranging. The implementation of a project portfolio methodology enables you to know with greater certainty what you’re getting into and what the post-consolidation landscape will look like. An acquiring business doesn’t want to discover an array of unexpected project obligations after the M&A is complete. Instead, you need to know exactly what the transaction will cost and what return you’ll get on that investment.

Your M&A due diligence program will be improved when you have a portfolio view available to help gauge the health of strategic initiatives across both entities. Are any high-priority projects in financial trouble? Have timelines gone astray? Are regulatory and other compliance obligations in good shape? Could any projects be eliminated? Key initiatives and their anticipated outcomes are sometimes critical assets in an M&A transaction, such as increased production capabilities resulting from an active project. Looking at the full portfolio will help you confirm those assets will deliver the value you expect.

With the number of projects a company may have in progress at any given time, it can be difficult to assess where each is in its lifecycle. A portfolio view of the firms’ strategic projects will provide the visibility you need into the current status of each initiative. If your expected return on investment for M&A activities depends on some or all of these efforts reaching completion on time, then knowing how projects are progressing is vital information to help inform decisions related to how, when, and if to proceed with the transaction.

Risk is a huge factor in many M&A decisions, but it can be frustratingly difficult to accurately assess risk areas and identify if any require remediation to avoid negative consequences down the road. A portfolio view of key projects enables you to develop a more comprehensive picture of risk across both organizations and can uncover important information about where risks may have been overlooked, ignored, or poorly managed. You can then move forward know that you’re aware of potential risks and comfortable with your strategy to address them.

Resources—availability, redundancies, and gaps—are also considerations in an M&A scenario. The right project portfolio management strategy gives you the tools and insight to weigh how current and future projects are likely to drive resource requirements. You can then use that high-level visibility to identify opportunities such as a more efficient use of in-house staff, the consolidation of external support, development of new workflows to streamline activities, and ways to deliver better and more consistent project outcomes once the M&A is complete.

 

PMAlliance, Inc offers project management consultingproject management training and projecportfolio management services.

Project Experience

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Portfolio Management
Successful portfolio management calls for exceptional data management skills and diligent oversight across multiple efforts.
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Manufacturing
Demanding, time sensitive, and finely tuned, manufacturing projects require close attention and experienced oversight.
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IT Projects
Organizations must be able to successfully execute challenging and highly visible technology projects to maximize revenue.
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Power Plants
Power Plants must be able to keep these vital infrastructure assets current, efficient, and economically positive.
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Energy
High-profile hurdles and expensive risks of failure make these projects critical to manage properly from the very beginning.
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Aerospace
Presents complexities at nearly every stage, from allocating resources to controlling schedule variances, or clearing regulatory & safety hurdles.
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Cross-Functional
Ensuring team members are able to move outside the silos of their department or discipline is the key to achieving success.
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Product Dev
Design and other early-stage activities must be carefully orchestrated while maintaining visibility on future impacts and resource needs.
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Mergers & Acquisitions
Among the riskiest and most strategically important initiatives a company can undertake, and their outcomes can make or break the business.
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Finance & Insurance
Technology implementations call for the right level of planning detail and diligent oversight.
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ERP & SAP
An ERP implementation can be among the most disruptive and strategically important initiative an organization can undertake.