Buyers can build bridges

3 February 2009

03 February 2009 | Paul Snell

Procurement is well placed to help align any "culture gap" when companies merge, according to a report.

The research also found senior management must allow purchasers to play a role in developing a plan to foster communication between the two sets of staff.

A study from consultancy Efficio said before taking the plunge, firms should choose key purchasing staff to form a joint team to meet procurement's future targets.

Employees from both companies can work together, and implement a new culture through dealings with internal customers and external suppliers. Cultural problems were cited as the main cause for failed mergers.

But the function is still being overlooked during the pre-merger and due diligence phase, because it doesn't have sufficient standing in the organisation, according to the report's co-author Luisella Chiesa, vice-president at Efficio.

"The parties should immediately set up a proper communication plan, not just using one set of contracts or imposing what one party believes," she said.

The report also said that if purchasing is not involved at an early stage, there could be a mismatch between expectations of bosses and the level of savings achievable. "If you want short-term savings you must put procurement at the discussion table and allow them to shape the communication plan," said Chiesa.

The study warned against transferring one firm's procurement strategy to the smaller partner.It said quick wins could not easily be produced by acquiring a larger volume of spend,because at the same time this creates more complexity for suppliers.

SMfeb2009

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