Market consolidation is reshaping the animal health industry, presenting both challenges and opportunities. As companies merge and acquire, they must blend operations, cultures, and systems seamlessly. Broader trends—such as sustainability in animal feed, personalized pet care, and innovations in healthcare—further drive the industry forward. These shifts emphasize the need to enhance animal welfare, address antibiotic resistance, and meet changing consumer expectations, adding complexity to the consolidation process. Fortunately, technology can unlock growth opportunities, enabling companies to stay ahead of trends and adapt to the evolving landscape.
In recent years, the animal health industry has experienced a surge in mergers and acquisitions, significantly altering the competitive landscape. Major deals like Eli Lilly’s Elanco acquiring Novartis Animal Health for $5.4 billion, Sanofi’s Merial merging with Boehringer Ingelheim, Merck Animal Health’s expansion into South America through the purchase of Brazilian IVC, Evidensia’s acquisition of Vetstrategy and MARS’s expansion, are reshaping the market. These strategic moves enhance scale and market reach but also introduce complexities (and sometimes risks) related to integration and maintaining service consistency.
Role of Advanced IT Solutions in M&A Execution
Mergers and acquisitions (M&A) come with unique challenges, especially when integrating two distinct entities into a single operation. The complexity of these transactions demands careful preparation and strategic planning to minimize risks and ensure smooth integration. Inadequate preparation almost always leads lead to operational disruptions, data inconsistencies, and cultural clashes, all of which can threaten the success of the merger.
The high failure rate of mergers and acquisitions—often cited as between 70% and 90%—is not surprising when you consider the challenges of integrating two companies. One of the most significant yet frequently underestimated hurdles is the integration of data and IT systems. According to EY’s Capital Confidence Barometer, 34% of executives view the complexities of IT integration as the primary reason deals fail to meet expectations.
In my experience, particularly within the pharmaceutical and animal health industries, the challenges are particularly pronounced. These sectors are characterized by a vast array of international markets, a wide range of products, intricate pricing models, and diverse customer segments, all under stringent regulatory oversight. This complexity makes IT integration a critical yet challenging task, where even minor oversights can lead to major disruptions, threatening the success of the entire merger.
The Importance of Data Management
Integrating various systems, standardizing data formats, and ensuring accurate information transfer are crucial early steps in reducing costs and quickly realizing the synergies that mergers seek to achieve. But there’s also a worst-case scenario. Lack of integration or poor execution of the integration process can threaten business continuity, leading to operational disruptions that can derail even the most strategically sound mergers.
I witnessed this firsthand while assisting a leading international pharmaceutical company during a merger. They faced significant challenges, including a production shutdown caused by problems with their ERP system. Rapid data growth and the introduction of new SKUs without proper data cleansing led to major production disruptions, and the lack of documentation and fragmented business knowledge further complicated matters. The solution was a complete overhaul of data cleansing processes, implementation of automated validation tools, and comprehensive staff training. This approach enabled the company to resume production within two months, achieving a 70% faster data validation rate and a 90% reduction in data errors.
Proper Governance
Effective governance structures are essential for managing M&A processes smoothly, ensuring that all integration aspects are handled systematically while addressing compliance and risk. Strong governance frameworks work hand in hand with advanced IT solutions to provide control and transparency throughout the merger. This combination is crucial, as every stage of the M&A process, from IT system integration to human resource management, hinges on effective data management. Reliable data not only supports decision-making but also enables the comparison of “before” and “after” results, helping to evaluate whether the merger has achieved its strategic goals. In this way, data management plays a pivotal role in ensuring the success of the entire operation.
Data Quality for Decision Making
Effective data management is crucial for making informed decisions both during and after a merger. High-quality data enables organizations to trust their insights and tackle post-merger challenges effectively. Even if both companies excelled in data-driven decision-making before the merger, integrating different data systems and decision-making processes can be tricky. Setting up a solid data foundation is key for accurate decision-making in the newly formed entity. Organizations don’t combine their capabilities—including their data—just to move forward blindly.
This process can be complex. For example, during a recent large-scale ERP integration for a leading international animal health company, we faced significant data migration challenges. The project involved transforming data across multiple systems, requiring extensive cleansing, enrichment, and validation. Our solution included automated data processes, customized de-duplication, and thorough testing, which allowed us to meet key milestones swiftly. This rigorous approach ensured high data quality and enabled the company to make precise, data-driven decisions throughout and after the merger.
Enhancing Efficiency through Optimization and Automation
As companies merge, aligning and streamlining operations is crucial to eliminating redundancies and integrating systems. Optimization fine-tunes workflows to boost productivity and cut inefficiencies, while automation leverages technology to handle repetitive tasks, reduce errors, and accelerate processes. Mergers present a prime opportunity to address gaps in these areas, especially if the companies previously relied on traditional tools like spreadsheets for rebate management.
Take, for example, sales in the animal health industry, where managing complex customer segments, numerous SKUs, and intricate rebate policies can be particularly challenging with outdated tools.
One of our clients faced significant inefficiencies due to a complex product range and a large sales force, leading to slow payments and high error rates. We tackled this by implementing a SaaS-based Rebate and Contract Lifecycle Management solution. This system, featuring configurable ROI simulations, ERP integration, and both desktop and mobile access, reduced the rebate management headcount by 50%, cut payment delays from 60-80 days to under 1 day, minimized errors, and enhanced customer satisfaction—all while being cost-effective and user-friendly.
As the animal health industry evolves through consolidation and technological advancements, effectively integrating operations and data systems is essential. Success in mergers depends on navigating these complexities, from seamless IT integration to optimizing workflows and adopting new technologies. Organizations that prioritize data-driven decision-making and process optimization will be best positioned for sustainable growth.
By focusing on data integrity, efficiency and innovation, the animal health industry can turn the challenges of consolidation into opportunities for progress and set new industry standards for the future. Our company is here to guide companies through this process. With our data expertise, we’re not just about navigating mergers – we’re about making sure you can streamline your operations and truly leverage the value of your data to drive long-term success.
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