NOVA Information Systems - US Bancorp:
Post-Acquisition Business Integration: Speed, Reliability, and New Value
Program Management and Skills Transfer: Planning and Execution
In June 2001, Ed Grzedzinski, the CEO of NOVA Information Systems and Vice Chairman of US Bancorp, invited VISION to join in the program management of the merger of NOVA Corporation and the Merchant Services business of US Bancorp. A successful integration would enable the combined businesses to take the number three position in the credit card processing market, serving 750,000 merchants with a processing volume in excess of $100 billion per year. The goal was to complete the merger as quickly as possible and seamlessly for the customer while identifying and keeping the best practices, processes, and systems from each business.
VISION Program Management
VISION began with an intensive two-month Design-in-Action project with senior leadership from NOVA and US Bancorp. The objective of the DiA was to map out the new business and plan the program of work required for its implementation.
The integration of the businesses would include the consolidation of core functions including products and sales, account opening, credit operations, equipment deployment, merchant training, customer service, chargebacks, risk management, settlement, reserves management and recovery. The work also involved a major program of enhancements to technology systems and consolidation of transaction processing and accounting platforms.
Based on success with previous clients, VISION established a joint program management structure and project control system to manage the work. This provided the framework around which NOVA and US Bank mobilized to execute the merger.
To date the integration team has achieved all major operational and financial milestones on or ahead of schedule. Newly implemented processes and technology have created multi-million dollar expense reductions in the first year. The integration program is on track to multiply that cost reduction by a significant factor in the second year.
VISION's Value in the Integration
Working closely with Grzedzinski's management team, VISION jointly created a program management style that embodied the critical balance of speed, control and entrepreneurship necessary to realize aggressive business goals that had been declared.
VISION consistently drew the attention of program team members to commitments of people and structure of work rather than just focusing on tasks and plans. This produced more effective action from the program teams.
VISION also mapped out the structures and processes of the new business in a way that brought exceptional clarity, from which more streamlined process could be put in place, eliminating wasteful activity.
Business Process Redesign: Hidden Value Recovered
During the integration VISION constantly looked for additional opportunities to uncover significant hidden value. For example, VISION mobilized a team of experts from NOVA, US Bank, and its own staff to design and build a new set of processes and systems, which have significantly reduced credit and fraud losses. The new risk management process adds millions of dollars in profit annually.
Summary
Both the business and technology executives of the US Bank-NOVA team could see opportunities for enormous improvements through the integration. Nevertheless, VISION's program management approach complemented their entrepreneurial style to realize process and systems improvements in the massive integration that did not initially appear feasible in the short time frame. The pay-offs in financial returns are significantly beyond those expected.