Procurement & Divestiture
Nicolas Passaquin
Chief Procurement Officer - Global Head of Sourcing ; Transformation ; Value Creation & Performance optimisation ; Risk & Sustainability
Navigating the Complexities of Corporate Restructuring
I worked on several divestitures in the last few years (and acquisition, but it's a different story) and thought that it would be good to share my thoughts here.
In today's dynamic business landscape, divestiture has emerged as a strategic tool for organizations seeking to optimize their portfolio, enhance shareholder value, or pivot towards new market opportunities. However, the intricacies of selling off a business unit extend far beyond financial considerations, particularly when it comes to procurement. As we delve into this topic, let's explore why procurement involvement is not just beneficial, but essential for a successful divestiture.
The Ripple Effect: How Divestiture Reshapes Procurement
When a company divests a branch, it sets off a chain reaction that reverberates throughout the organization, with procurement often feeling the most significant impact. This process demands a delicate balance of maintaining business continuity while preparing for a new operational reality. Key areas affected include:
Procurement as a Value Creator in Divestiture
Far from being a mere support function, procurement can be a significant value driver during divestiture. Early and active involvement allows procurement to:
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Strategies for Procurement Excellence in Divestiture
To maximize value and minimize disruption during a divestiture, consider these advanced strategies:
Conclusion: Procurement as a Strategic Partner in Divestiture
As corporations continue to evolve through strategic divestitures, the role of procurement transcends traditional boundaries. By embracing a proactive, strategic approach, procurement teams can drive significant value, ensure operational continuity, and pave the way for post-divestiture success. In this era of constant change, procurement's ability to navigate the complexities of divestiture will increasingly become a differentiator for organizations undergoing transformation.
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About me: Passionate about driving organizational excellence and sharing expertise, I wrote two books available on Amazon. With a focus on strategic collaboration and digital transformation, I lead efforts to optimize sourcing and supply chain operations for enhanced business performance.
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2 个月That's all true, Nicolas Passaquin, if a little generalised. More specifically, software contracts (and lack of them) is an important area. Every company finds that functions (expecially R&D) are using specialist applications that are neither visible to audit nor properly contracted. Maintaining (or establishing) the acquirer's right to use these is hard. It is unreasonable to expect an acquirer to pick them up in Due Diligence, so they litigate - justifiably. Divestments (and mergers, of course) are a dinner-gong for SAP, Microsoft, Oracle, Salesforce, etc., etc. At least one new set of licences needs to be bought by someone. These firms never miss this opportunity. Some colleagues and consultants will argue 'Oh, the acquirer will cover this activity by integrating it with their own systems and licences'. But, even if they can, you are excluding VC and MBO acquirers. So, yes, absolutely; when any demerger is considered, it is often already too late for all the necessary preparation work. Oh, and one more thing. This work cannot be contracted out to the consultant providing demerger support. Ask me why, if you like, but I have run out of words on this reply
CPCM | Procurement | Strategic Sourcing | Sustainable Supply Chain | Project Management | Negotiation Expert | Vendor Management
2 个月Worth reading,Thanks for sharing.