Telstra's telco acquisition program supported

Discover how PKF Digital’s Two-Tier ERP Platform transformed Telstra's M&A process, reducing onboarding time by 80 per cent and cutting costs, while preserving the entrepreneurial agility of acquired businesses. Learn how this innovative approach enabled rapid integration and supported Telstra’s growth strategy.

Reading time: 4 to 5 minutes

Quick take:

• Acquisitions have a 70 per cent to 90 per cent failure rate, particularly when expert advisors are not involved

• Integrating new businesses into existing ERP systems like SAP is a lengthy and costly process
• PKF Digital has an alternative approach to system integration, as described in the below story of Telstra’s acquisition of O2 Networks.

One of the fastest ways to increase market share is through mergers and acquisitions. And, in 2019 Telstra applied this methodology at breakneck speed, acquiring one new mid-market business per quarter.

According to a 2016 article from Harvard Business Review, 70 to 90 per cent of acquisitions are abysmal failures. If you have ever been a part of a mid-market acquisition, then you have experienced why this is often the case. Losing leaders and brand identity can cause rippling disruptions across the business. Attrition begins. As the acquired company adapts, some of the key attributes that made them successful and attractive in the first place are put at risk. The acquired business ultimately loses its entrepreneurial nimbleness as it becomes a cog in the larger enterprise wheel.

Integrations require major changes to processes and business as usual. The newly acquired business is often burdened with unnecessary process bureaucracy. And, to compound the problem, once information begins to be shared between two enterprise systems, differing schemas, protocols, and standards result in time-consuming integration challenges.

Data unification is vitally important to gain accurate and reliable visibility into acquired businesses as quickly as possible.

Telstra experiences the NetSuite solution

The acquisition and integration success rate was no different for Telstra. As a large enterprise running SAP acquiring four mid-market businesses a year the results were often dire. Acquisitions frequently underperformed and failed to provide the anticipated ROI.

As part of the onboarding process Telstra would migrate much smaller, much more nimble businesses onto the behemoth that is SAP. This process typically took 15 to 18 months per acquisition, with migration costs over AUD 1 million. 

Then Telstra bought one of PKF Digital’s customers, O2 Networks

Telstra’s acquisition process took a turn when they acquired O2 Networks in 2021.

O2 were successfully running on NetSuite with advisory support from PKF Digital. During acquisition negotiations with Telstra, the PKF Digital team proposed an alternative approach. Rather than burdening the successful O2 Networks business with new enterprise-level systems, we were able to keep the systems that helped them to become so successful in the first place.

We worked with Telstra to develop a mid-market acquisition platform, not just for the acquisition of O2 Networks, but for all acquisitions going forward. This provided:

• 100 per cent visibility and onboarding complete within three months
• Huge cost savings in both time-to-value and software licences
• Substantially improved user adoption and systems adherence.

We implemented PKF Digital’s Two-Tier ERP Platform for Telstra.

PKF Digital’s Two-Tier ERP Platform is a pre-built M&A platform with reusable integrations to SAP and other key applications. In conjunction with this, we have a Standard Onboarding Process to further simplify the repeatable process of onboarding within 90 days.

Since successfully rolling out this program help Telstra in their aggressive acquisition path, we have repeated the process with dozens of other companies.

With our 2-Tier ERP M&A platform and standard onboarding process in place acquired companies can maintain their core qualities, enabling them to turn their focus to growth.

PKF Digital knows the value of keeping businesses on the systems that support and adapt to the needs of their nimble and entrepreneurial mid-market size. That solution is often NetSuite. In fact, NetSuite customers make up 65 per cent of tech IPOs since 2011 demonstrating what a great fit NetSuite is for fast-growing companies.

Contact us to find out how we could apply our ERP M&A solutions to help your growing business flourish.