“There are a variety of types of A&D deals out
there and each one can have countless reasons
for failure, ranging from poor execution to cultural
issues. However, there are several cases where
integrations have struggled due to IT complexity and
complications with fusing disparate, cross-platform
systems.” – Drew Lockard
and uncovers potential future risks. One area often overlooked is information technology (IT). With the dramatic
advances in technology over the past decade, technology
platforms have and will continue to play a significant role
in the long-term success or failure of business. When entering the due diligence phase, consider a team that has the
industry experience along with the financial, operational,
and technological expertise to ensure no stone goes
PLANNING AND EXECUTION
Historical trends show that roughly half to two-thirds of
mergers will not deliver on the original investment thesis.
With more than $72 billion worth of A&D transactions having taken place in 2016 and in Q1 of 2017, failing to execute
on a robust plan could be a significant destruction of value.
That said, there are some significant benefits to integration; from cutting costs to creating synergies, integrating
your acquisition can create and preserve a tremendous
amount of value.
To accomplish this, you must have a thoughtful integration plan detailing each work stream, activity, and responsible party. In addition, support and buy-in from the senior
leadership team is crucial. Too many times integration or
change management projects fail due to lack of leadership
and politics within the organization. To the extent there is
potential for cultural and/or personnel issues, resolve them
upfront to avoid any future distractions. Separately, keep
focus on the original investment thesis of the acquisition.
Holding each team member accountable by aligning specific deliverables, the project timeline and the overall return on the investment with an incentive program is a great
way to ensure a fast and successful integration.
There is, of course, a cost to doing things better and faster. Be sure to invest in an implementation partner capable
of delivering results without compromising the overall economics of the initiative. Lastly, starting immediately and
adopting a steady weekly meeting cadence ensures targets
are met and risks are mitigated before they become real
problems. Basic disciplines such as these are integral to
There are a variety of types of A&D deals out there and
each one can have countless reasons for failure, ranging
from poor execution to cultural issues. However, there are
several cases where integrations have struggled due to IT
complexity and complications with fusing disparate, cross-platform systems.
Today, many companies struggle with capturing, ex-
tracting, and ultimately analyzing operational and transac-
tional data within their businesses. This is largely because,
historically, businesses have rarely made technology a pri-
ority, relying on a primitive IT platform. Thus, when deal-
ing with legacy and perhaps “homegrown” solutions, there
are various challenges that arise when attempting to inte-
grate. Additionally, many companies are experiencing data
volumes that are growing exponentially and are held in dis-
parate systems throughout the organization.
Per Tsvetana Paraskova with Divergente LLC: “The oil
and gas industry has now started to use data analytics –
comparing data from multiple sources – an approach that
other sectors such as finance, for example, have been using
for years. Unconventional fields…have too many wells on a
limited acreage, each with its own specific production-type
curves, cost of drilling, geological formations, leasing costs,
and completions optimizations. And each of those factors
is changing from well to well, location to location, or from
one period to another…These variances make it difficult to
The wave of technology is here and it is critical for business leaders and technology leaders to be aligned as they
kick off the integration process.
Increased volumes of A&D activity are expected to continue in 2017 and there will be several situations that will require integration efforts. To avoid disrupting the existing
business and to capture the value of the original investment thesis, it will be important for business leaders to run
a thorough due diligence process, develop a detailed plan
and assemble the best team that knows all aspects of the
Whether you are a private sponsor or a strategic partner,
failing to integrate your business can be devastating to
your investment. Be thoughtful, assemble the right team or
select the right partner, and start immediately.
ABOUT THE AUTHOR
Drew Lockard is a managing director at international energy consulting firm Opportune LLP.
He maintains extensive management and consulting experience across a variety of indus-tries in the areas of financial analysis, strategic
advisory, program management, information
technology and data analytics. Over the past 15 years, Lockard
has led practice building efforts, guided numerous clients
through complex high-impact situations, and managed large