When two organisations need to become one, via a merger or acquisition, one of the greatest challenges they face is becoming one company in thought and in action.
Rarely is this a seamless and simple process when we are blending people, processes, systems, data and reporting.
The fun really begins when we add time constraints and customers to the mix.
However, with the right plan and team in play, the less the impact and disruption to staff, management, customers and service delivery.

Enter Prodatum Consulting
Acting in a 3rd party capacity removed from the politics and the need to work in the business we take the pressure off, do all the thinking and problem solving for you so you can get on with running the organisation.
If you are in the pre-planning stage, the middle of integration or dealing with a mess, wherever you are on the journey we can help.

Welcome, to Prodatum Consulting

Prodatum works with Melbourne's small to medium sized companies to improve their processes and their data practices. Our aim is for owners, managers and staff alike to work in an easy environment, with clear expectations and minimum stress. After they engage us, our clients find that they are able to make better decisions faster than they could before. These better and faster decisions:

• Improve profitability
• Simplicity of processes
• Improve customer reterntion, AND
• Decrease staff turnover

Do any of these scenarios sound familiar to you?

• End-of-month reporting is a nightmare (reporting in general is a nightmare).
• Too much inventory on your shelves (or too little).
• Revenue leakage due to not meeting compliance requirements or contractual arrangements.

All of these are problems we have fixed for our clients. Our Client Stories are a testament to that. If any of these scenarios sound familiar to you, please contact us for a discussion.

'I am yet to walk into an organisation that is under resourced; they're all over resourced, and it's amazing what a little re-alignment can do.'
Bernice Takla - Consultant

About Prodatum

Prodatum specialises in assisting Melbourne’s small and medium sized companies (SME) navigate mergers and acquisitions (M&A), and it does so specifically from an operations (i.e. process/system/data/job) integration and improvement perspective.
While Prodatum itself is a new consulting company, it’s principal and founder, Bernice Takla, has worked with integrating and improving operations intensively for over 20 years.
She has worked in companies large, medium and small in many diverse sectors (including construction, fast moving consumer goods (FMCG), employment services, registered training organisations (RTO), financial services, health, transport, infrastructure and others).
In that time, she came across companies struggling due to M&As not done well. In 2020, she decided to focus solely on assisting SMEs to navigate mergers and acquisitions from an operational perspective both before and after the M&A.
Prodatum believes in simplicity. M&As are complex, but this doesn’t mean they have to be complicated. Prodatum takes its skills to its clients assisting them to achieve simpler processes, simpler data and ultimately simpler decisions, even in the complex world of M&As.
*Harvard Business Review Article: The New M&A Playbook

About Bernice

My friend calls me the Data Whisperer.

He'd just asked me what I did and when I replied that I'm a Business Analyst. He said to me, 'Yeah, but what do you DO?.' So I explained, 'Well, I often sit there at the computer talking to the data, which then talks back to me. Sometimes we wind up in an argument, but more often than not, I win. Or at least, I like to think that I win!'. It was at that point that he said to me 'Ahhh, so you're a data whisperer.'

After 20 or so years, I've decided that my favourite data whispering has to be around process improvement because it doesn't live in a vacuum. To get processes right, I have to include not just process data, but financial data, and customer data and employee data. I love that interplay between people and process and tools/equipment. It’s like putting a jigsaw puzzle together. The difference with process improvement is that end result - that look on people's faces when the penny drops that, 'Hey, my life’s just been made so, much, easier!'. That look is what gives me the energy to keep doing this. That is why I like working at Prodatum – that look just shows up so much more often on the faces of those working in small to medium sized businesses.

My experience in working with processes and data came from working in and with organisations large, medium and small. I’ve also worked in companies from very varied industries; construction, government, finance, vehicle telematics, fast moving consumer goods, infrastructure, education and employment services. Combining this experience with my educational background which includes a Masters in Business Information Systems and a Bachelor of Economics, means that I can bring seemingly unrelated things together and create simple to use solutions that businesses can benefit from years into the future.

Bernice's Linkedin Profile

Financial Modelling/Forecasting

Reporting Issues

64 Worksheets

Gary, a general manager, hired me once because he had NO visibility over his company’s operations; he was desperate.

Before I came on board, someone had tried to give him that visibility. In Excel, they had started, but not finished, a workbook of 64 worksheets – one for each outstanding job. Each worksheet looked like the one before. All that was different was the data. Gary wanted me to complete the workbook, after which his plan was to have each worksheet printed daily on an A3 sheet of paper and hung up on the company’s operations room walls.

It was a cumbersome solution, so I asked Gary if he was open to me presenting him with a simpler solution. He was, and a couple of weeks later, he was presented with a 3 worksheet Excel workbook. One of those worksheets gave him a high level red-amber-green snapshot of every outstanding job. Instead of 64 A3 sheets on the operations room walls, Gary had 4.

For me, the look of relief and excitement on Gary’s face was priceless.

Value: Priceless

Cost to build: $12,000

12 to 13 days

Ellen was a team leader in an accounting department. She was only a few years away from retirement and wanted to step down into an easier role. Her organisation needed to manage the delicate dance of hiring someone for the team leader role, whilst getting the team leader’s tasks done, whilst teaching Ellen her new role. I was brought in as a temp to do one of the team leader’s tasks, the task of account reconciliation.

This manual and labourious task took Ellen anywhere between 12 to 13 days every single month. It cut across seven Excel workbooks from data that was pulled from SAP.

Ellen spent the first couple of days teaching me the accounts reconciliation task. Once I understood what she was trying to achieve and realised it could be done more simply, I asked if I was allowed to simplify the process. Five weeks later, she was presented with a step by step manual with pictures on how to run the new accounts reconciliation process in one day and in one workbook, and where most of the heavy lifting was done by the Excel, not by Ellen.

When Ellen said to me 'I wish I had found you two years ago', she more than made my day.

Company Savings: $250,000 cost savings over five years (or $50,000 p.a.)

Cost to build: $30,000

Old data

Six days

It was March, and Samantha in finance was going on maternity leave. I was brought in to cover her duties while she was away.

One of her duties was preparing and delivering the End-of-Month report. Samantha created this report using Excel. It was a convoluted process, involoving data downloaded from a government website which was sorted, and filtered and pivoted and finished off with copies and pastes, with further calculations and checks and rechecks for errors before it was emailed to the Senior Management Team - six days later.

I asked the CFO, Philomena, if she minded me simplifying the process. She didn't, and that April, using just MS Access and Excel, the Senior Management Team, instead of waiting 6 days, received their error-free End-of-Month Report just after midday, on the FIRST day of the month. Every month thereafter, others in the finance team produced and delivered the report by midday of the first working day of the month.

By reducing the the end-of-month reporting process from six days to two hours, Philomena was more than happy for me to spend that saved time seeing what else could be improved.

Value: $150,000 over 5 years (or $30,000p.a.)

Cost to build: $18,000

(Compliance) Process & Data/I.T. Problems

7+ Hours

George didn't think he had a problem. The law required that financial planning organisations give their clients a Statement of Advice (SoA) practically every time they were given advice. At the time, anecdotal evidence in the industry was that advisers in small frims were spending 7+ hours creating each SoA. George didn't like it, and he figured it was just part of the cost of doing business. Still it was costing him $72,000 per adviser per annum, and that didn't include lost income potential. What if? What if, that SoA creation time could be reduced?

I worked with George, and using nothing more than the IT softwares they already had in place (i.e. MS Access, MS Excel and MS Word), his company's SoA production time decreased from 7+ hours to 1 to 1.5 hours, with much of that work defrayed to assistants. Advisers now had the capacity to see 10 client a week, not 3.

With 4 advisers in his firm to keep happy, I was glad to have helped George discover his new problem - that of insufficient marketing!

Value:

Savings: $1.44M over 5 years (or $288,000p.a.)

Potential Earnings: $8.05M over 5 years (or $1.61M p.a.

Cost to build: $72,000

9.92%

Garry was in a flap. As the Wage Connect Subsidy (WCS) process owner, his gut feel was that most WCS contracts were non-compliant with government standards. In fact, he believed more than 90% were non-compliant. Non-compliant meant non-payment by the federal government AND for his organisation to still pay the employers with whom these WCS contracts were signed. As data for another WCS related project had already been gathered, I asked Garry if I could look into it.

The data held two surprises.

The first was that only 9.92% of the WCS contracts were non-compliant. Garry's relief was palpable. They weren't making a crazy loss. They weren't making a loss at all. They just weren't benefiting from the cream, that is, they weren't getting the profit. The second surprise the data held was that the rate of non-compliance could be brought down to 0%

Six weeks later, I gave Garry an improved process with 0% non-compliant WCS contracts. This new process didn't require any further capital or operating expenditure and it used only the tools and resources his organisaiton already had.

Garry's excitement was infectious and it was really heart warming seeing that excitment reflected in his staffs' faces too.

Value: $119,600p.a. (or $598,000 over 5 years)

Cost to build: $36,000

Attendance Marking

Claire's job was to claim the federal government funding owned to her organisation from their students' class attendance. So her day consisted of chasing trainers all over the country for their paper class attendance rolls, which she received by email or fax. Then, when (and if) she received those rolls, she would type the data into one of the organisation's two VETtrak Student Management Systems. The lost productivity to the organisation in follow-up time and data-entry is only half the story with the other half being the lost revenue from unclaimed class attendances.

From this analysis, I presetned to Con, the CEO, a business case proposing that trainers enter class attendance directly into VETtrak; which he approved. By all rights, this should be the end of the story. The CEO approved, the trainers were trained, and the process and reports to check that trainers were marking attendance created and bedded in the organisation resulting in $35,000 saved in wages every year and at least the same again in previously uncollected revenue from the federal government. Instead, completing this project became a matter of completing several other projects in the organisation that had stalled. These projects had been started years previously as part of two mergers and acquisition processes but were stopped soon thereafter because they were too hard. Among other things, these projects involved amalgamating domain servers, amalgamating VETtrak databases, and reviewing VETtrak licences and after which, finally, the trainers could be trained.

For all this, my favourite moment on this project was a totally unexpected one. One day, as I was leaving the office, I heard a loud 'Whoop!!' come from Ree's office. Ree was a business development manager and she had just discovered that she no longer had to go to poor, overworked Claire and wait several days to get reports from the other VETtrak system which she hadn't had access to for cost saving purposes.

Value: Priceless

Cost: $48,000

4 x 24 x 7

Simon's job was to set up the company’s support desk functions to meet a customer's mandated service level agreements (SLA). He wasn't happy. He was frustrated that meeting the customer's SLAs meant financing 4 people to man the phone 24 hours a day, 7 days a week; quite the cost for a small organisation. Simon asked me if there was anything I could do.

I analysed the SLAs, the help desk process and the IT supporting the product. Four weeks later, I handed Simon a redesigned helpdesk process that needed only 1 person (not 4) to man the phones during non-working hours.

It was a real pleasure seeing Simon's shoulders relax as he calculated just how much pressure was going to be eased for his organisation.

Company Savings: $4,008,000 over five years (or $801,600 p.a.)

Cost to build: $24,000

So you think you’re ready for a merger or acquisition?

Undertaking a merger and acquisition can be the most exhilarating—or terrifying—step in your business life.
On the one hand, you’ve done well enough to consider expanding in your field of expertise. You could buy out a competitor, or blend assets and skills, also with a challenger business.
At the same time, a hungry opponent may have you in their sights for a friendly (or not so gentle) take-over.
Yet another option could see you desperate to escape an enterprise that no longer satisfies the dreams you once held for it.
These are just three of the major components of M&As, each with multiple permutations. How and which do you choose? When? Who should do the work?
As analysts specialising only in the M&A field, we understand your excitement and your nerves. That’s why we’ve prepared this series of blogs on the advantages and obstacles M&As offer businesses.
The risks can be high. You’ll read about some of the most spectacular failures imaginable by some of the biggest names on the planet. And you’ll also get to witness some astonishing and hear-warming successes, sometimes against the odds.
Whichever way you think you’ll go, we hope you will find some answers to your questions here.

What Wall Street didn’t tell you about mergers and acquisitions

You may not be Gordon Gekko, but business is booming and your new age accountant whispers the words you’ve been dying to hear: mergers and acquisitions.
Who hasn’t been tempted at some point in their work career by the Siren song of expansion?
It can start with a promotion. Your employer recognises your brilliance, loyalty, and value and rewards them appropriately … for now. But then it dawns on you that without your skills, personality, and market knowledge, your employer’s business would need to extricate itself from a substantial hole.
You agonise over your future, and finally take the plunge. You go out on your own and contrary to expectations and statistics—others’ not yours—you succeed. Step by step you build your team and your portfolio of products or services.

Delayed gratification

You’re a master of delayed gratification. You plough current profits back into the future of your business. Not for you the new car, the expensive apartment, the holidays abroad.
In your monthly accountant’s review (remember when it was a cursory annual comb-over?), she admiringly observes your progress. She comments on how you’ve not just ticked your KPIs, but surpassed them by a considerable margin. Every time.
Now that you’ve begun to identify both opportunities and plateaux in the business, she wonders aloud if you might think about talking to her colleague, Jane. Jane works in another department of their global accounting firm. She’s fast developing a reputation as an astute adviser in businesses contemplating—you guessed it—a merger or acquisition.

History of mergers and acquisitions

History records the rise of the term mergers and acquisitions as the result of major corporate activity, particularly in the United States, at the close of the nineteenth century. Economic shocks occasioned by the 1890s depression, associated regulatory reactions, and rapid technological advances, accelerated the process. They hastened the drive to what modern economics called rationalisation, and the 21st century has transformed to globalisation.

Protect your estate, ensure your lineage

In my view that represents a too narrowly financial view of the M&A movement. Without becoming too gender specific, M&As have traceable links going back to the days of the chase. When ownership of land and the hunting rights that went with it measured your worth and wealth, preserving and expanding your estates was as critical as ensuring your ancestral lineage.
For centuries, established European royalty and neo-colonial economic aristocracies have practiced their own M&As. They were known as marriages—forced, by convenience, or through high-level political negotiation. Call them what you like, they could, overnight in some cases, re-draw national and international boundaries and change the destinies of millions without the whiff of a ballot.

Conquest and capitulation

Back in the 21st century and the still laddish world of finance, M&As have become the Holy Grail of business. They signify not just commercial success, but something altogether more ancient and fundamental: conquest and capitulation.
Modern M&As look superficially different—tax lawyers and due diligence accountants have replaced bailiffs, stewards, and sheriffs. But the roles and functions remain largely the same. Hired experts are brought in to facilitate and oversee a process, or a series of processes that, in theory, will take you and your enterprise to the next level.

So many questions. Who has the answers?

But what exactly is that next level? Is it boosting the size of your endeavour? By what measure: turnover, profit, staff, products and services, patents, innovations, locations, awards, employee shareholdings, philanthropy? Or some other gauge known only to you and your ego?
Who will control the result? How much ownership and power will you, or they, exercise? For how long?
Do you have other possibilities on your agenda? Do you want an exit from a business whose usefulness has served its purpose, and now offers an opportunity to move on to different challenges? Do you yearn to escape from a responsibility that has become a burdensome millstone, an albatross around your neck?
How much is the business worth, assuming it can be merged or acquired at all? How can you increase its value to make it as attractive as possible to potential suitors or partners? Where do you start?
Many if not most businesses facing major decisions on their future find these issues confronting. Not only is there no single answer, there are hundreds of scenarios to take into account long before you make your first move.
It’s why Prodatum offers M&A Your Way, our free, integrated XX-point questionnaire and 90-minute information session. M&A Your Way helps you plot your passage through the reefs of a merger or acquisition. It clarifies your thinking and your options long before you set sail on a process that brings so many other M&A aspirants to disaster.
Call Prodatum on (03) 8513 0939 to book your M&A Your Way session for a simpler, enlightened merger and acquisition discussion.

How even major corporations catch the mergers and acquisitions yips

In the still blokey world of finance, mergers and acquisitions remain the Holy Grail of business.
And why not, most would say, considering trade of one sort or another forms the pivot on which Western civilisation has always grown and prospered.
We saw in blog one of this series (What Wall Street didn’t tell you about mergers and acquisitions) that the M&A phenomenon emerged in the late nineteenth century. Rapid industrial growth and technological breakthroughs made for exciting but also volatile business conditions. A series of economic shocks, compounded by ill-prepared governments, threw the developed world into periods of turmoil. The result: buying, selling, and blending on a scale never seen before. The momentum hasn’t stopped since.

Momentum does not equal success

Momentum, of course, isn’t the same as success. A juggernaut cruising comfortably at the freeway speed limit has undeniable momentum. Should the driver fall asleep at the wheel however, the momentum continues but the direction and outcome of the journey alter drastically.
Respected Harvard Business Review commentator, Roger L. Martin, writing in June 2016, issued a caution even the largest corporations would hesitate to ignore. He drew this stark conclusion: ‘M&A is a mug’s game, in which typically 70%-90% of acquisitions are abysmal failures.’¹
His litany of failures involves some of the biggest names in global business. These are household brands whose individual and cumulative clout you would believe should make them all but immune to major deals going sour. Closer to home we maintain our still-sturdy belief in Australia’s top-end banks as being ‘too big to fail’.
Time to think again.
Martin’s 2016 study covered four examples of major corporates reporting substantial losses through M&As in 2015. At the time of writing he conceded that it might have been too early to jump to conclusions about new M&A deals at that time. But he maintained his four models were typical of the longer-term history of major transactions.

Microsoft’s catastrophic plunge on Nokia

Nokia was once the innovative darling of mobile and cellular communications. At its peak in 2007, it commanded 51 per cent of the global mobile phone market. By 2013, it was hovering near bankruptcy. Only a basement sale to Microsoft for US$ 7.9 billion saved the day, and then only temporarily.
In 2015, Microsoft in turn was forced to write off 96 per cent of the purchase value as other app-based rather than hardware-reliant platforms seized the lead1.

Google’s Motorola dud

At the same time, Martin reported Google found itself with a Motorola dud. Google had to offload its 2012 $12.5 billion stake in the cellular communications giant’s handset business for a paltry $2.9 billion.

Hewlett-Packard gets Autonomised

The meltdown also reached Hewlett-Packard. It acquired UK software developer, Autonomy, for $11.1 billion only to have to write off $8.8 billion, citing ‘accounting improprieties’. ²

News Corp humiliated with MySpace

The last of the giants to fall foul of the M&A yips in 2015 was News Corporation. It had to face the humiliation of virtually giving away MySpace for a miniscule $35 million after its high profile $580 million acquisition six years prior. ¹
All of these large-scale, hard-core disasters come as signal warnings to any business tempted to play the M&A game. Why their forays into large-scale takeovers failed is the subject of other lengthy blogs. They’ll explain how so many organisations and businesses fail to reconcile new and apparently desirable markets with their ability to integrate with other entities.
Another crucial element to M&A disappointment is ignoring or failing to properly consider less measurable but equally vital components of the target organisation, or the new sector.

What should smaller organisations do?

In the meantime, should smaller companies shy clear of any and all M&A activity, given these notorious examples? The short answer is no, but with a long proviso.
Sufficient success stories exist to warrant a cautious approach to a merger or acquisition. The operative word is cautious, backed by investment in time, money, expertise, and effort.
For a de-mystifying preliminary discussion on your M&A options, call Bernice Takla +61 418 307 633 to book your free M&A Your Way with Prodatum.

¹M&A: The One Thing You Need to Get Right ²How Autonomy Fooled Hewlett-Placard

Entreprise Architecture: Who's it for anyway?

Enterprise architecture (EA) offers businesses many solutions, but most of the models that represent it have a problem.
Its name suggests a discipline that embraces all facets of business. By linking strategy, business and technology, enterprise architecture ought to deliver value by unlocking the enterprise’s best capabilities.
However, most EA frameworks in contemporary use treat business as a monolithic entity. They fail to recognise that all businesses are made up of a complex combination of functions. At a minimum these business functions include operations, human resources, finance, and marketing; all of which are very different with very different purposes and very different needs and ways of doing things.
Worse, most current EA frameworks allow ever-present IT to dominate the matrix. Since EA emerged from IT, its language and structure mostly reflects an IT worldview and little else. IT is important and yet, it is no more than an enabler, no more so than say HR, or marketing or finance. Without the interplay of all the business functions, the chicken and the egg analogy reverses: without the business, IT has nothing to exist for.
The current state of EA frameworks is too IT centric; it leaves the business abstracted to the point of invisibility. Any enterprise, or any enterprise architect, wanting to incorporate EA into an organisation, needs to find a way of engaging both the business and IT as collaborators rather than opponents.
Failure to incorporate EA into an enterprise runs many risks. At its crudest, the prime danger is resource wastage, leading to distraction, frustration, and diminished morale. Correctly applied to the whole organisation, EA is a treasure trove of value.
In examining some of the EA frameworks available, a little known framework, the EA3 appears to come closest to satisfying the diverse, and sometimes divergent, needs of both business and IT. It appeals for four reasons:

1. Business makes up about 70 percent of the of the picture while giving credit to IT as the enabling agent
2. It emphasizes the role of people, which few other platforms do
3. It recommends documents that synchronise with those the business might in time create itself
4. Its graphic representation neatly illustrates EA’s contribution to dynamic progress.

To aspiring enterprise architects who want to bring EA to your organisations: find an EA framework that lets all business components and IT join the round table.
To businesses that want to benefit from EA: when your enterprise architect makes you invisible, demand a framework that gives you a voice.

MS Excel’s secret weapon—tables, and why you should use them

If you could reduce a calculation from 20 minutes to three using MS Excel tables, why wouldn’t you?
The following true example illustrates the point. With 30 worksheets, the workbook was unremarkable. About half were data worksheets. The longest had 27,000 rows of data and the average worksheet had around 3,000 rows. The remaining worksheets were mostly pivots and calculations. It also had two macros of about 300 lines each. All up, it was 22Mb, large, but not exorbitant.
Why did it take more than 20 minutes to recalculate?
The cause soon became clear. The spreadsheet’s creator had thousands of formulas asking Excel to SUM, lookup, SUMIF, or perform other functions on a whole column, in this instance, all 1,048,576 rows. Often the formula demanded these functions were carried out several times in the same cell. Even with MS Excel running millions of calculations a second, the workload was stupendous.

A choice for future data sets

Prior to 2007 people creating spreadsheets had a choice when creating formulas for data sets of unknown future size. Did they ask the formula to calculate the whole column, sacrificing performance? Or assume that the data set wouldn’t grow beyond say 5,000 rows, and hope they had guessed correctly? Prior to 1997 , when Excel’s maximum number of rows was 16,384, it was acceptable. Even with the increase to 65,536 rows, it was still viable. But 1,048,576 rows, constantly repeated? Hello nightmare.
My solution? First I put all the data sets into tables. I then re-wrote all the formulas so that instead of Excel re-calculating the whole column of 1,045,576 rows, it processed only the data set of 3,000 or 27,000 rows now, or 1,765 rows or 50,000 rows in the future. That brought the calculation time down from 20 minutes to just over three. Still long, and more work was needed, but it was much more manageable.
Excel tables have five distinct advantages:

1. It’s easy to apply formatting to the table so that it has alternating row colours, making it far easier to follow and read the data.
2. If you want to add a formula to a column in the table, Excel will automatically fill the formula from top to bottom of that column. When you add a new row of data, you won’t have to remember to copy the formula down another row. The only time it will not do this is if there is already data or another formula in that column.
3. When you want to filter or sort the rows of data, it maintains the data’s integrity.
4. Using pivot tables means you longer have to double and triple check that Excel has the correct beginning and end to the data set in use.
5. You needn’t worry about adding columns or rows to the data set. The pivot will automatically accommodate them when you refresh the pivot.

So the question is, why not use MS Excel's tables?