Archive: May, 2014

Mergers, acquisitions and supply chain finance

Pete Loughlin from Purchasing Insight invited me to contribute to his blog. Purchasing Insight is the leading resource in the field of purchase to pay by providing current and authoritative information and opinion on best practice as well as insights on vendor solutions and emerging trends. Pete and I share an interest in supply chain finance (SCF) and we believe that recent changes in technology and the economic environment will dramatically affect the market.

Changes in technology such as removing the cost of Know Your Customer (KYC) and providing EDI platforms for free have opened up the market. This coupled with the rapid growth of shadow banking and the recovery of the mergers and acquisitions (M&A) means that many SCF providers will be acquired by large, global organisations in the next coupe of years.

M&A have a mixed record of success. Failures are common and arise from poor leadership and a lack of integration planning. Given that procured goods and services make up 60% or more of an organisation’s cost base, procurement is a vital element of any successful merger. CHC has an excellent track record in providing post-merger integration of procurement through detailed planning, excellent stakeholder management skills and short and long term cost reduction programs.