Cost reduction opportunities
Over 50% of the back office synergies possible in a merger can be IT-related; ranging from accounts payable, through procurement, to IT economies of scale. Many of them will involve the consolidation of central business functions, such as Payroll, Finance, Purchasing and HR. Typically, they will either be one-time savings or a reduction in on going costs, such as:
- Eliminating redundant positions in the consolidated business functions
- Eliminating operating, maintenance and support costs for redundant business applications
- Reducing the total cost of operating the combined IT infrastructure (consolidate data centres, standardise core applications such as email, standardise PCs/printers/servers/networks etc)
- Reducing the cost of mobile phones by negotiating a single contract (for each country)
- Reducing the cost of voice and data calls by consolidating equipment and contracts (you may even be able to develop a case to jump straight to a next generation technology, such as Voice Over IP)
- Reducing the buildings portfolio by consolidating similar operations and the location of central functions
- Reducing the number of suppliers and leveraging discounts based on increased volumes for the remaining suppliers
