Mergers & Acquisitions: Management System Continuity

ISO Internal Audits
When companies merge or acquire each other there are many challenges to over come to ensure a successful outcome for all involved.

There are organisational cultures to consider, efficiency of processes, how the customer base will react and so on.

Although understanding the ISO management systems of the respective companies might be a good place to start in order to understand the similarities and differences, often this is addressed after the deal has been completed.

Here are some things to think about from our experience:

Assessing the Need to Integrate

It’s intuitive to want to reduce the complexity of the management system and therefore reduce certification costs by bringing two ISO Management Systems into a single integrated system.

And while this is often the best option, companies should first consider if a unified management system is actually best for the company and its interested parties.

Occasionally, maintaining two different systems can be the right solution. This can be the case where the business activities of the two companies are wildly different – for example if an IT service company buys a recruitment company; or an interior designer buys a furniture manufacturer.

Alternatively, where acquisitions are to gain market share and increase customer base, integrating the management systems make sense.

Roles, Resources and Authorities

You now have a much larger organisation to govern in terms of head-count, customer base and/or physical locations.

So the compliance team needs to be more complex and distributed as a result. This may involve representatives in each branch who report to a central compliance team, devolving governance of the system to a local level, but using shared experiences to drive improvement across the whole company.

ISO Certification

If there are two different ISO certificates, it could make sense to bring them under one.

For management systems with a multi-site scope, most certification bodies take a sampling approach and will visit the ‘Square Root (+1)’ of the total number of sites each year. This can quickly prove cost efficient.

The difficult thing is deciding which certification body to keep and which to release. Our CertBodies website has some helpful guidance on choosing a certification body.  

However, an additional consideration is the certification cycle of each system. The surviving management system will have an ‘extension to scope’ in order to include the new sites and activities. This is more convenient at the recertification stage or during surveillance.

Combining Documents & Policies

Most companies can learn from each other, so view this as an opportunity to improve the over all system by comparing the management system documents and policies.

One novel method is to get representatives from each company to internally audit the other’s management system. This will highlight strengths and weaknesses that can then be mapped together, taking a Darwinian approach to the evolution of the management system. Of course this relies on good will from all parties to prevent it becoming an opportunity to criticise each other.

Consultancy Help

ISO Consultants like Assent will provide impartial advice on combining management systems during (and after) a merger or acquisition to maintain management system continuity.

We can relieve some of the administrative overhead by working with both parties and analysing documents to create integrated drafts.

Using our links with many UKAS accredited certification bodies; we can also liaise with them on your behalf to plan and cost-out changes to the certification programme.

For more information on how we can help, please contact us.

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