Enterprise Transformation Mergers and Acquisitions Simplified with
3D Blueprinting

Business Problem

National First Bank of the East wants to acquire Merchant Bank of the People — a merger that, on paper, looks almost ideal. National First is a retail-focused regional bank with commercial experience, $50 billion in assets and 600 branches in 7 U.S. states. Merchant Bank, also a regional in 7 states, has $40 billion in assets and 500 branches. Opportunities for efficiencies abound.

But mergers and acquisitions have always been risky. In a highly acquisitive and hyper-competitive market environment, due diligence is conducted at warp-speed and deals are consummated extremely quickly, with billions of dollars at stake. Business, cultural and technology integration threaten to derail the entire effort. Transferring one bank’s formally documented processes and procedures to another can be enough of a challenge, but the critical informal knowledge accumulated over the years is also at risk. Avoiding disconnect between the two banks requires a systematic process for capturing, connecting and communicating the processes and work-arounds that are vital to each bank’s operations.

And in an industry where the customer is king, a negative market response can be the ultimate kiss of death. No wonder a huge percentage of mergers are financial failures.

In an ideal world, National First executives would know before the merger that the acquisition truly makes sense — not just on paper, but also for the resulting organization’s strategy, processes, and even its IT applications and infrastructure.

That’s how 3D Blueprinting by Unisys can help.

Unisys offers a 3D Blueprint for the future — one that eliminates the guesswork and wishful thinking that dooms the typical merger by instilling the three qualities most critical to success: visibility, traceability, and flexibility.

See how Unisys makes this happen for National Bank of the East …

Strategy Layer

We use our 3D Blueprinting methodology to map the organizational layers of both banks. That allows us to compare and contrast a variety of “what if” scenarios — to see the optimum approach to the integration of people, process, and technology while aligning with the business visions and strategies.

In terms of strategy, National First’s growth strategy has been focused on in-market growth and increasing its customer footprint through acquisition. Merchant Bank has taken a different approach, emphasizing small business growth, with investment products a key differentiator in its consumer business.

With the goal of reducing costs, improving efficiency of processes, and expanding products and distribution, the resulting merged bank, First Trust Bank of the People, would have a larger retail footprint and could capitalize on expanding Merchant Bank’s investment products.

Impact Analysis

Using our 3D Blueprinting process we compare and align the visions and strategies of the two organizations. This presents a unique advantage for National First, providing insight into potential synergies for products, locations and competitive positioning. It also helps to create realistic goals for First Trust.

Process Layer

In any M&A situation, it’s critical to harness the integration synergies, identify redundancies and disconnects, and to optimize merger integration — all of which affect an organization’s business processes and operations.

In this case, National First has 600 branches in seven states, is usually staffed with five tellers, three CSRs and one branch manager, and is largely transaction-focused. Merchant Bank has 500 branches in five of the same states plus two others. Merchant Bank is more customer-focused, and a typical branch staff includes four tellers, three CSRs, one investment product specialist and one branch manager.

First Trust Bank of the People would cover an additional two states, which requires adopting new state regulations.

Impact Analysis

Our 3D Blueprinting process uses visual models to show the high-level processes performed at the major functional areas of the banks — such as the branches, contact centers, and back-office operations. The resulting 3D Blueprints provide the foundation for analyzing opportunities for process improvements, standardization, and workflow automation to help drive the business case justification for the merger.

These visual models drive functional and application requirements to support the new integrated bank. They also make training, change management, and organizational issues visible. By gathering the right metrics for these models, we help drive business and operational results that can be directly linked to the expected cost savings and revenue growth assumptions of the merger. This would identify the potential for closing branches or consolidating other operations based on redundancies or inefficiencies while maintaining consistent business processes, therefore reducing the risks.

Applications Layer

For National First, applications are a mix — some are insourced while others are outsourced. Typical branch core services include deposits, loans, mortgage and payments. National First has also started implementing image-exchange processes for compliance with Check 21 legislation in the U.S.

Merchant Bank has an emphasis on investment services in addition to the typical retail branch services that National First provides. Although Merchant Bank hasn’t implemented image-exchange processes, they’re considering it for check capture and retail.

By using our 3D Blueprinting process it becomes clear that for faster and more effective integration, First Trust Bank of the People should use National First’s applications as the default solution, and would incorporate Merchant Bank’s CRM and investment applications, since National First doesn't have these solutions. Image capture could be done at the branch, operation centers could be consolidated, and help desk and technology support could be consolidated or outsourced.

Impact Analysis

3D Blueprinting makes visible the links between the inventory of applications and data to the business processes, functions, and organizations that they support. This allows the bank to see the potential impact on the business all the way through the organization — from the strategy and process to applications and infrastructure layers.

Infrastructure Layer

Blueprinting National First’s IT infrastructure involves mapping its devices, compatibility, network performance and asset inventory. From this blueprint we can see how to optimize performance, eliminate redundancy, determine the impact of eliminating branches, and help decide which network operations center (NOC) is most effective and whether to keep or outsource it.

First Trust Bank of the People would likely require increased network capacity, and need to integrate Merchant Bank’s systems in the NOC and help desk functions. The benefits of IT rationalization and optimization can be traced and server consolidation may provide an opportunity to reduce overall cost and improve efficiency.

Impact Analysis

3D Blueprinting provides the methodology to rapidly develop and analyze the inventory of technology architecture components such as the servers, the desktops, the network structure and bandwidth and other key information to use as a baseline for both banks.

Our experts can then identify and help resolve technology risks, such as inadequate bandwidth to support the new First Trust Bank of the People, or technology incompatibilities between the two pre-merger banks, or other information that could greatly impact the cost and timing of the merger and conversion of the systems.

Cause-Effect Relationships

By blueprinting the organizational layers of First Trust, we can trace the cause-effect relationships between business decisions made on one layer and their potential impact on the other layers.

This traceability provides critical insight for First Trust, because it can see the cascading effects of change — how a decision made regarding business strategy affects business processes, the applications used, and the infrastructure.

For the merger, a 3D Blueprint would make visible the cause-effect relationships of a merger decision. 

Because it provides visibility into the organization, a 3D Blueprint gives leaders the ability to determine whether to proceed with an acquisition.

Resulting Solution

3D Blueprinting helped develop a viable business case for pursuing the merger. By articulating the similarities between the two organizations, and the potential for opportunities, National First could see how Merchant Bank’s processes, applications and infrastructure could be integrated into First Trust. The result is more than the right fit. It’s a traceable map on how to integrate the two. It’s the means to transform through merger — or even through a second and third merger.

Our 3D Blueprinting process brings three critical qualities to the merger integration process:

• Visibility: Making change more predictable and expected business outcomes more achievable.
• Traceability: Creating a record of the decisions, relationships and interdependencies that exist over time throughout all the layers.
• Flexibility: Building the organizational agility to change again and again, especially as the organization adds the complexity of even further acquisitions.

Achieving these three important qualities holds the key to harnessing the integration synergies that drive the merger process. The biggest, most overlooked obstacles to merger integration are the many disconnects throughout the departments and functions within the merging organizations — let alone the many disconnects between the two organizations. These disconnects exacerbate the integration challenges, and compound matters of governance, infrastructure, process and the ability to leverage intellectual property.

But by using 3D Blueprinting, First Trust eliminates those disconnects, and instead achieves visibility into its organization like never before.

Upon completion of the merger, we leave behind a 3D Blueprint of the merged bank that First Trust can use as a map to the future. This set of living, flexible models is foundational: First Trust Bank of the People can refer to and adapt it as the bank and market evolve over time.

Benefits

For the bank, 3D Blueprinting by Unisys helps:

• Make business processes responsive to changing market conditions and opportunities.
• Integrate emerging, complementary or different technologies with existing technologies.
• Protect and leverage intellectual assets and property.
• Consistently and effectively mobilize multiple stakeholders with very different talents, perspectives and capabilities.

The result? National First Bank of the East has the power to clearly make the right decisions about acquiring Merchant Bank of the People, to integrate better and faster, to merge systems with greater efficiency and to provide better customer service.