The Best Way To Achieve Unity Amid M&A

By Nicola Kinsella, SVP of global marketing, Fluent Commerce

2021 was a record-breaking year for mergers and acquisitions (M&A). Not only was the quantity of M&As up 24% from 2020, but the value of those deals reached an all-time high of $5.1 trillion, a whopping 57% higher than in 2020 and smashing the previous record of $4.2 trillion set in 2007. Experts say the M&A frenzy in 2021 was fueled by intense demand for technology and data-driven assets and the pent-up deal-making demand from 2020.

Given this trajectory, it’s no surprise that 2022 started with a bang, including a flurry of M&As in the digital commerce space. Online retailers like Fanatics, 1-800-Flowers, and outdoor equipment retailer Evo all announced significant acquisitions just days into the new year.

While M&As happen every day, there is a great deal of behind-the-scenes logistics that must go smoothly for the deal to be successful. Everything from balancing the books to remediating outstanding legal disputes must be dealt with delicately for each business to get that big, final stamp of approval.

This is especially true for retailers, wholesalers, and manufacturers. They must be able to simultaneously unite the business end of things while achieving economies of scale quickly and without disruption. What’s more, to support a programmatic approach, organizations need to operationalize the onboarding of new acquisitions so that they can deliver business value faster.

Creating Unity Amid Change

A common issue many modern businesses face during an M&A is the integration of legacy systems. That can encompass everything from customer relationship management (CRM) and sales-enablement software to financial records or file-sharing apps. These hindrances can slow down the M&A process and significantly delay ROI.

From a digital commerce perspective, this plays out in the area of order management integration. Most often, there are three main challenges for commerce businesses when it comes to M&A: siloed inventory data, dispersed customer order history, and inconsistent order orchestration across divisions. A distributed order management (DOM) system can help companies undergoing acquisitions or mergers by optimizing allocation, fulfillment, and distribution across a wide network of inventory locations.

 Gathering Inventory Data

One of the biggest challenges in any business is knowing what stock is available to promise to customers. When one company acquires another, that problem only multiplies. Suddenly there is stock data spread across multiple legacy systems.

Enterprise resource planning (ERP) migration is complex and time-consuming, and point-to-point integrations aren’t scalable. A DOM system allows the business to see stock across all of its backend systems by connecting all of its disparate systems to give a single view of available stock.

DOM systems allow businesses to merge sales channels so that they can streamline operations even further. It also lets customers place a single order across all of a company’s divisions or brands without requiring separate log-ins.

Viewing All Customer Order History

Consolidating shared services, like custom service functions, is a key way to reduce costs and extract quick value from a merger. But to make it work, businesses need to provide customer service representatives (CSRs) with a single view of all customer orders. If they have to log into multiple systems to find data, it increases call time. What’s more, it leads to an inconsistent customer service experience.

By consuming orders from every online sales channel, the DOM system provides customer service staff with a 360-degree view—across all divisions and sales channels—of orders in one place. This allows the organization to consolidate the customer service function and provide a better customer experience.

Streamlining Order Fulfillment

Saving the best for last, the concept of order orchestration is another common challenge experienced during an M&A. Just because sales and inventory are consolidated and organized doesn’t automatically equate to streamlined fulfillment. The type of sales model determines how order fulfillment is handled.

In a B2C cross-brand/banner fulfillment model, branded e-commerce sales channels are kept separate so that customers can shop the same way they did pre-merger. However, fulfillment may be conducted using all of a business’s locations. A DOM is critical here because it will give the company a single view of all of its stock and pickup locations so that it can provide convenient options to customers, like cross-brand pickup via ship-to-store and cross-brand returns that allow customers to return online purchases to any of a brand’s stores.

Unified sales channels may sound good in theory, but the fact is, those orders will still be fulfilled by different divisions (at least in the short term). Why? It may be that one division’s fulfillment processes are a competitive advantage, or the business may standardize most of them but still needs to accommodate regional or category-specific requirements. A DOM system can help in this model because it can support different fulfillment workflows. This could be by division, product, category, region, or some other factor. A business can consume orders, split them if needed and route them to the right division. The customer and CSRs only have to track a single order, and each line gets sent to the right location for fulfillment.

However, when a multinational fulfillment model is in place it tends to get a bit more complex, yet still entirely manageable by a DOM system. Often, organizations need tiered sourcing logic. Do they want to ship from the closest location to the customer or a regional hub? Are there other international restrictions that need to be considered? With a flexible DOM system, businesses can configure fulfillment workflows in a way that works best for them. No matter what the distribution strategy, brands can be confident that they’ll ship from the right location every time.

DOM systems can help businesses assume ROI and value from an M&A faster because of their ability to integrate and collate information and resources quickly. Legacy system integration is daunting, but DOM systems can help businesses have a better, real-time understanding of inventory and order visibility across disparate systems.

About The Author

Nicola Kinsella is SVP of global marketing for Fluent Commerce.