Navigating a $3B acquisition
When NTT DATA acquired Dell Services, it had a 22-month Transition Services Agreement (TSA) during which it needed to integrate 30,000 employees, 54 sites and 1,000 applications while managing existing projects and driving growth.
NTT DATA created the integration management office (IMO) and project management office (PMO) to lead and manage the business and IT workstreams; overseeing the migration and integration of global business processes, data and applications—focusing on people, communication, business needs, outcomes and change management.
Business Needs
Although mergers and acquisitions (M&A) provide opportunities for rapid growth, 50 percent fail because they don’t deliver the expected results. Successfully aligning disparate cultures, business processes, systems and IT workflows requires specialised skills, careful planning and ongoing management – all critical activities to making sure this effort does not become a statistic. In addition, pressure to meet TSA requirements often causes leaders to build the new organisation around IT requirements instead of business requirements, which jeopardises success.
NTT DATA Services is highly skilled in helping organisations drive growth after M&As. The organisation put its own expertise to the test when it acquired Dell Services, which instantly more than doubled the organisation’s revenue and propelled it to a top 10 global provider of business and technology services. To add to the challenge, time was a critical driver. Under the terms of the TSA, NTT DATA had just 22 months to complete the integration. Barry Shurkey, chief information officer of NTT DATA Services, explains, “NTT DATA was already a $1 billion company with 20,000 employees in 10 countries. Dell Services was a $3 billion acquisition that involved bringing on 30,000 people, migrating 37,000 email accounts, reimaging 30,000 end user devices, transitioning 1,600 data circuits and more than 1,000 applications.” A critical component that was put in place was the ability to perform reimaging activities independent of the application transition work. In addition, NTT DATA would be adding nine data centres and 54 facilities – and business/IT operations, payroll and benefit solutions for an additional 34 countries. To leverage the new data centres and prepare for a dramatic increase in computer processing power required for the merged company, NTT DATA successfully migrated their ERP platform from a co-location facility in India to the US.
To accelerate business transformation while seamlessly meeting existing requirements including project commitments, NTT DATA created an IMO and PMO. These teams were focused on planning, managing and optimising all aspects of the integration. “There was a significant amount of risk that we needed to plan for and manage around data, security, people and applications,” Shurkey says. “To succeed, we needed to create a plan for a plan that’s business-driven and centred on people. In the scheme of things, the technology can be straight forward, but if you don’t bring the people along, you’re going to lose.” Recognising the challenge of adoption and transition, organisational change management (OCM) was a key focus area. Leadership engagement was key so a change network of sponsors (senior leaders) and champions (aligned to sponsors) was created to help promote adoption by being a change advocate. The OCM team collaborated with workstream leaders to understand timing of policy and tool changes to ensure helpful and appropriate change toolkits were created and published to all impacted team members. The team also analysed the impact of the change to productivity and employee experience which influenced how the change was introduced and implemented.
Outcomes
- Completes the integration of a $3 billion acquisition in 18 months
- Very minimal impact on customers during integration
- Drives significant annual revenue increase
- Optimises procurement through supplier consolidation
- Consolidation of facilities resulting in considerable savings
- Sizable savings resulting from optimisation of the workforce
- Creates a proven acquisition and integration service framework
- $50 million in facility consolidation savings
- $100 million in workforce savings
- Creates a proven merger and acquisition service framework
Solution
Insights that cut risk and facilitated workforce savings
Collaborating with global leaders representing 44 countries, IMO and PMO management teams conducted “wall walk” sessions to map every process and project schedule. These exercises gave leadership counterparts across the merged organisations a comfortable setting to meet, communicate, build relationships and fuse cultures. The wall walks also provided critical information about dependencies, conflicts and risks, which was necessary to create detailed and effective cross-organisational plans and models to achieve NTT DATA’s business goals. “We invested three months of time upfront just planning,” says Shurkey. “We were in one of the biggest halls you can imagine, with teams from Dell Services, Dell and NTT DATA collaborating on how to do this and stay in sync. It was a great investment.”
By gaining a complete overview of its global processes and schedules, and having teams work together to optimise them, NTT DATA was able to increase operational efficiency by removing duplicate workflows. As a result, it has saved a notable amount in workforce expenses. In addition, the company developed an AI platform that maps new project requirements with employee roles and skillsets so that it’s easier and faster to find the right employees from 50,000 people for every job.
Savings through facility and supplier consolidation
Using insights from the wall walks and other planning sessions, the IMO and PMO teams worked with global business leaders to create a standardised corporate IT environment. Achieving this environment required the initial migration of all 1,000+ applications used by Dell Services including project-specific tools and enterprise resource planning (ERP) applications. NTT DATA also extracted and migrated all Dell Services – related data from Dell project, HR and finance databases.
The Dell Services integration for finance, including the contract to cash process (one of several business process functions that were transitioned) migrated over 11,000 customer delivery locations, 4,100 contracts and 2,200 vendors. A one-team approach between the business and IT ensured a successful complex effort of data mapping and transformation, supported by a robust business data validation exercise, resulting in a minimal cutover blackout period, and little to no impact on business operations.
To eliminate overlaps in functionality between existing and acquired systems, the IMO and PMO teams oversaw an application rationalisation and integration assessment. One of the key assessment outcomes was the creation of a database that categorises all applications using 100 possible attributes such as the projects and business outcomes they support as well as third-party dependencies, licence costs and risks related to the integration completion deadline. To save time and increase overall efficiency, NTT DATA consultants developed algorithms to analyse all the data, uncover duplication and pinpoint opportunities for savings.
By taking this business-driven approach, NTT DATA was able to retire two-thirds of its business applications from the legacy companies, so that today all global employees use one suite of corporate applications that include cloud services such as Microsoft Office 365. In addition, IT staff reimaged 30,000 desktops and laptops, deployed new security measures and ensured employees’ access privileges met new requirements. “We greatly simplified our application footprint by performing an application and integration assessment,” Shurkey explains. “Today, by streamlining our footprint, NTT DATA has realised significant savings in annual procurement costs and facility expenses.”
Beats acquisition timeline and facilitates a significant increase in annual revenue growth
NTT DATA met its TSA deadline four months ahead of schedule – in just 18 months. Customers were minimally affected by the acquisition, so today the company has at least a 95 percent customer satisfaction rating in all key areas. In addition, NTT DATA is driving growth. Shurkey explains, “The great thing about this acquisition is that it prepared us for the future. We created a unified corporate culture that spans 44 countries. We documented and streamlined all our processes. We’re expecting to increase revenue by a significant amount. And now, we can share our experience and expertise to help other organisations look beyond the obstacles of mergers and acquisitions to achieve their visions as well.”
About NTT DATA Services
NTT DATA Services improves delivery cost structure and drives significant improvement in annual revenue with the seamless integration of the $3 billion Dell Services acquisition.