Inappropriate or poor design of acquisition and integration in banking is one of the most impediments to the success of such transactions. This section develops a suitable project schedule for the acquisition project in two stages: the planning and the implementation stages (Donald, 2009). While the planning phase of the schedule comprises development of acquisition strategies, the implementation phase will include the activities of searching, screening, targeting contact, planning integration, closing and evaluation.
Important to this schedule is the ABI Chief Executive Officer’s emphasis that Project Integra has to be delivered on time and within the narrow cost and effort limits.
Phase 1: Building the bank business plan
In the first place, the project will begin with the process of constructing both a business plan and an acquisition plan to drive the subsequent stages of Project Integra. The business plan will articulate the ABI’s vision and strategies in place for the benefit of all its stakeholders (customers, shareholders, employees, suppliers, regulators, and communities).
This plan will be long-term oriented, cutting across organizational lines and will be broadly defined with the relevant details (Donald, 2009).
Phase 2: Building FAFS-ABI acquisition implementation plan
This phase will comprise the strategies that ABI will employ to execute the business strategy
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ABI projects that the acquisition and integration with FAFS will be completed in the next six moths. In building this plan, functional strategies are explicitly stated to plan how the major banking functional areas – accounting, servicing loans, processing items, marketing, branch operations, and purchasing – will enhance success of Project Integra strategies. From the foregoing, the acquisition process will include development of a strategic plan entire banking ABI banking business, and formulation of an acquisition plan related to the ABI business plans.
Phase 3: The search process After formulation of business strategies and acquisition execution plans, there comes the process of searching which will determine ABI’s current and potential customers on acquisition by FAFS. The search process is based on the segmentation of the market. Identification of the target market will involve a three-step process, with the first one entailing establishment of evaluation criteria to distinguish the firm’s target market from other potential target markets.
In this case, the management of Project Integra will conduct a segmentation of the banking services market it colonizes and that dominated by FAFS to determine what features will most likely affect the new bank’s overall reputation. The second step will entail continual subdivision of industries and markets in the Banking field in the States and their analysis to show their relative attractiveness (Donald, 2009). In the third stage of the search process, the markets identified by the above steps will be ranked in accordance with their profit potential to ABI and FAFS.
Phase 4: The screening process
The fourth phase of the schedule will identification of the risks involved in the project to ascertain how much of the ABI’s available resources the management can actually commit to allow acquisition by FAFS. At this juncture, ABI will assess the ability of FAFS to manage ABI as the subsequent market dynamics and the inner operations of the target company may negatively affect the post-acquisition integration and the resultant management of the combined companies.
Phase 5: First contact After screening FAFS and finding it fit to acquire ABI, the first contact will be established at the highest possible level through an intermediary.
Discretion will be important in making this contact as the current and potential ABI customers as well as other stakeholders may be concerned with the uncertainty that will come with the change of ownership. The expected change in ABI ownership terms may bring changes in banking service quality, the reliability of the bank.
Phase 6: Negotiation During the negotiation phase, ABI and FAFS will negotiate a confidentiality agreement, term sheet, and letter of intent. The confidentiality agreement will be to signify the mutual binding covering both parties to the transaction (Donald, 2009).
Herein, ABI will provide all available audited data and supplemental information as requested by FAFS, which will also give similar data to ABI. The Term Sheet is a discussion document that will outline the terms of business operations between ABI and FAFS. Lastly, the letter of intent will be used to identify the projects areas of agreement and disagreement between ABI and FAFS early enough in order to delay signing of the definitive agreement of acquisition in case of major disagreements or misunderstandings.
Phase 7: Developing the integration plan
Following successful negotiations, the Senior Manager, Projects, develops the integration plan. This stage will require proficiency with project management and excellence in interpersonal skills in order to get along with others with ease. This process will include determination of operating norms and standards needed for consistent business after the acquisition and integration.
Phase 8: Closing The closing phase will entail gathering all appropriate consents from shareholders and regulatory bodies as well as third party consents.
Included here too will be the definitive agreement of acquisition. For closing to be effected smoothly, significant planning for the same will be required (Donald, 2009).
Phase 9: Implementing the post-closing integration Next on Project Integra schedule is the implementation of the post-closing integration whose cornerstone is the signing of the definitive agreement of acquisition between ABI and FAFS. This will outline in detail the rights as well as obligations of both parties both before and after closing. Phase 10: Conducting a post-closing evaluation
Finally, the manager of Project Integra will be required to conduct post-closing evaluation in order to determine whether the acquisition is meeting expectations, to design corrective interventions when necessary, and to discern what was done with excellence and what should be improved immediately and in the future (Donald, 2009). This schedule is expected to enable achievement of total integration of the Service Delivery Networks between ABI and FAFS within the set six months and utilizing only the human and financial resources allocated to the project. The section below explores ways in which the project’s perceived risks would be weighed.