How Digital Drives Revenue and Cost-Savings in Manufacturing M&A

When companies are merged or acquired, management often looks at headcount (people) but a focus on platforms can ensure project objectives are met.

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Ed KennedyEd Kennedy

Growth via merger and acquisitions (M&A) in B2B manufacturing is nothing new, and it’s only expected to increase. PwC reports that global industrial manufacturing M&A results for Q2 2018 were valued at $36.7 billion, a 68 percent increase over Q1 2018.

These boardroom deals can, however, cause post-acquisition blues on the ground floor as executives and division leaders from the separate businesses jockey for the inside lane up the corporate ladder and everyone else speculates where they and their projects will fall. After the ground has stopped shaking and the dust settles, the hard work of integrating these companies begins, or it doesn’t.

Executives start asking about ‘synergy’ projects, which include consolidating central marketing, IT and regional operations into a single unit while cross selling products into one another’s customer base. Digital marketing and IT are often in the cross-hairs in situations like these, expected to assimilate the acquisition’s brand, customer experience, web technology, customer relationship management (CRM), etc., without adding headcount and in some cases reducing it.

When considering the average organization has a fragmented technology stack already — like dozens of competing and complementary software — it should be no surprise that growth through acquisition creates an even more disjointed technology landscape across departments with content, commerce, operations, analytics and more all being used for small percentages of what they’re good for and by very few members of the organization. With acquisition, that mess and waste multiplies, and the objective of serving multiple markets, product lines, brand families and constituents (partners, customers, employers) in a unified manner goes wholly unmet.

As these newly joined companies look at consolidating marketing operations, sales and digital solutions into one larger team, digital marketing spend and IT are logical places to extract costs out of both businesses. The silver lining is these consolidation programs create an opportunity to make long overdue customer experience improvements many manufacturers have been seeking budget for.

Companies can actually save money by offloading technologies not in use and replatforming under a single digital experience platform (DXP) that serves multiple purposes and user types. Consolidating brochure-ware sites, dealer portals, employee intranets, digital commerce sites and country-specific properties can be a daunting yet transformative moment for a company coming off large M&A activity. The ability to build content once and use it everywhere, for example, has tremendous cost savings and reduces operational hurdles of siloed departments and systems.

While only one percent of manufacturing marketers assess their organization’s content marketing maturity level as sophisticated (source), content and commerce is a priority of B2B online sellers (source). Without marrying the two, manufacturers are creating even more complexities to the detriment of end-user experience and internal operations.

When processes run smoothly, so do people. Coming off acquisitions, it is the responsibility of senior-level staff to communicate the vision not only for the unified company but of the platforms, products and platforms that will get them there.

Today’s buyers, even in this industry, expect one call or one click to get them the answers they need. When one department they have done business with does not know answers about other departments they have done business with in the same organization, they feel frustrated and unvalued, sometimes enough to take their business elsewhere. Without a smooth transition between the platforms in use, customers lose. Consider the grief Marriott and Starwood are getting these days from rewards program members who are missing points, losing status or having to manually merge the two programs themselves. In B2B manufacturing, the possibilities of technology mistakes are more detrimental with customers’ lines of business slowing or coming to a halt because of platform disconnect, product changes or project delays from the manufacturers.

While consolidating content management, commerce, marketing automation and customer relationship management is often seen as a controversial, political and multi-year project, companies on our platform are seeing their return on investment being recouped in as little as six months according to an independent study by Forrester.

Xylem, a water technology provider, is a global B2B manufacturer with 32 individual brands across 150 countries and multiple M&A story lines. It needed to not only absorb customer demands for detailed and accurate product and application information across languages but also consolidate its digital landscape. It achieved these goals by implementing a digital experience cloud to replace its legacy CMS marketing platform while introducing digital commerce scenarios. The results were synthesizing disparate business units, fusing its B2B go-to-market strategies, and cultivating its digital capabilities to acquire and retain its core audience.

When companies are merged or acquired, management often looks at headcount (people) but a focus on platforms can ensure project objectives are met. The technologies that are in place due to M&A can help or hurt short- and long-term goals. By ensuring platforms are cohesive, people and projects will be too for the betterment of operational efficiencies and customer experience.

Ed Kennedy is the senior director of commerce at Episerver.

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