01 · M&A / Integration

The Deal Was Only the Beginning

Global M&A, carve-out and integration into a new operating model.

The deal was only the beginning

The transaction made strategic sense.

The parent organisation, a publicly owned US insurer, was reorganising itself as a pure-play US insurer and divesting its non-US operations. One of those operations was its UK business.

On paper, the objective was straightforward: separate the UK business from its parent and establish it as an independent organisation.

In reality, the transaction was only the beginning.

The UK operation had around 300 employees, relied on more than 150 applications and approximately 100 vendors, and had around 400 email boxes spread across multiple data centres. The technology environment was intertwined with the wider group, with shared systems, data and services extending across the organisation.

The business needed to become independent without disrupting a regulated insurance operation.

And we had a deadline.

Finding what actually needed to move

One of the first challenges was understanding what the business actually depended upon.

The selling organisation operated multiple domains and shared systems and data across its businesses. Before anything could be separated, we needed to identify where data was held, which systems contained it, how it was being used and how it could be extracted safely.

This investigation was more complicated than simply producing an inventory of applications.

Some capabilities that appeared to belong to the UK operation were actually being provided by the selling parent. Others were delivered by outsourcing organisations under master contracts held by the seller.

The existing operating model worked, but it contained significant dependencies that would not survive the transaction.

The question therefore became much bigger than how to separate the technology.

It became:

That distinction shaped the entire programme.

Three organisations. Three agendas.

The programme involved three distinct stakeholder groups: the seller, the buyer and the transitioning business.

Each had a different perspective.

The seller remained a regulated public organisation and had little appetite for prolonged disruption or downtime. Its priority was to continue operating safely while providing the access and information required for the transition.

The buyer wanted the new organisation established as quickly as possible and understandably wanted to drive the process. However, it did not have the institutional knowledge of the existing business and was accustomed to working through large consultancies, large committees and much larger teams.

The transitioning organisation was caught between the two.

I often described the difference in working styles as being used to Formula 1 speeds versus Formula 3 speeds. In reality, we were both operating somewhere around Formula 2 — and both of us were outside our comfort zone.

My job was to keep all three groups aligned and moving towards the same outcome.

Designing the independent business

I led the technology transition from the early due-diligence process through to completion.

That included technology strategy and solution design, budgeting, vendor selection, contract negotiations, transitional services agreement negotiations, physical migration and the design and implementation of the technology organisation.

It also meant deciding how the capabilities previously provided by the parent organisation would be replaced.

Some would remain with the transitioning business. Some would be provided by managed service providers. Some required new resources.

This wasn't a programme built around a handful of large decisions. It required hundreds of smaller decisions and constant steering to keep it on track. Ultimately, those decisions rested with me.

We were designing an operating capability that would allow the new business to function independently.

Knowing which battles to fight

One of the most important decisions concerned the managed service provider that would run the cloud infrastructure after transition.

The new parent wanted to use a Tier One provider. It was a credible organisation with significant capability, but I challenged the choice.

My concern wasn't whether the provider could do the job. It was whether we would matter to them.

I wasn't looking for the biggest provider. I was looking for the provider for whom we mattered.

For a business of our size, we would have been a rounding error for the preferred provider. I believed we needed a partner for whom our business was significant enough to receive attention, rather than simply another account number in a much larger portfolio.

We selected a smaller and less expensive managed service provider that was a better fit for what the business actually needed.

I also challenged the proposed migration of the HR system. My preference was to retain the existing product temporarily and remove an unnecessary source of transition risk.

The group HR team disagreed and ultimately insisted on the migration.

Having weighed up the risk and opportunity, I accepted the decision.

Then the deadline moved

The programme was already working to a hard deadline.

Missing it would have meant extending the transitional services agreement for another three months, with a potential £2 million penalty as well as the wider opportunity cost of remaining dependent on the selling organisation.

Then the go-live window was brought forward by a month because of year-end processing constraints.

The migration could only take place over a weekend. The seller could not tolerate extended downtime and the different time zones involved made the available windows shorter than they initially appeared.

There was no room for a leisurely migration.

But there was also no room to compromise business continuity.

Speed mattered, but not at the expense of risk.

When confidence disappeared

At one point I went on holiday.

When I returned, I was confronted with an uncomfortable message: the team no longer had confidence that we would meet the deadlines.

The scrutiny from the steering committee had knocked the team's confidence, and several workstreams had become increasingly difficult to deliver.

The answer wasn't to tell everyone to work harder.

We reshaped the programme.

We separated what had to be true on day one from what could follow afterwards and what could safely be deferred.

That gave the workstreams achievable objectives again.

It also changed the atmosphere.

The team could see a path through the problem rather than simply a deadline getting closer.

That restored energy and confidence at a point when both were badly needed.

A beautifully choreographed ballet

With around 100 people directly involved across three organisations, more than 100 vendors and ten migration workstreams, there were always opportunities for something to go wrong.

The priorities of the vendors were not necessarily the same as ours.

The answer was not to pretend that the plan wouldn't change. It was to make the team capable of changing it without losing sight of the outcome.

That was how I described the eventual programme.

The comparison wasn't about elegance. It was about coordination.

Every part had to move at the right time.

When the physical migration began, I introduced a programme manager to take direct responsibility for the ten migration workstreams. My own focus shifted towards business communications and stakeholder management, making sure the business users understood the plan and were comfortable with the impact on their work.

We also encountered practical problems along the way.

The rebuilding of laptops was taking considerably longer than expected, and there were issues joining rebuilt devices to the new cloud environment.

Rather than allow those problems to distract the core programme team, I created a dedicated team to concentrate on building the laptops and resolving the cloud-join issues.

The programme kept moving.

The outcome

The new organisation went live as promised.

There was no missed deadline and no business-critical downtime.

Processing continued. The business continued to operate. A high-touch team remained on site for the first month to deal with any issues that emerged after go-live.

But the most important outcome came afterwards.

The organisation was now able to operate independently of its former parent.

It could make changes more quickly than before.

And, importantly, it was able to invest in new lines of business and grow.

The technology transition had therefore achieved something much more important than moving systems from one organisation to another.

It had created the platform from which an independent business could grow.

The lesson

The transaction was only the beginning.

Completing the deal did not create an independent business. It created the opportunity to build one.

The difficult work was deciding what the new organisation actually needed, what could remain unchanged, what had to change and where it was worth taking risk.

It was also about knowing when to push, when to compromise and when to change the plan.

And when the pressure increased, the answer wasn't simply to work harder or add more people. It was to focus the team on what really mattered.