Case studies

Dell, EMC, and Deloitte create the next tech icon

A technology M&A case study

At a time when many software companies were shrinking, Dell and EMC decided to grow together. Here is a case study showcasing their journey to completing the largest technology M&A deal ever.

Watch the video: Technology M&A case study

Disruption drives Dell and EMC together

In 2015, disruption rippled through the technology industry forcing many category leaders to redefine their paths forward, including software pioneer EMC and personal computer maker Dell. Rory Read, Dell’s chief operating executive, who was serving as president of Worldwide Sales at the time, remembers, “Other companies were making themselves smaller, becoming insignificant. What we wanted to do was create a new kind of company that could lead the next decade or two in this space.”

It was this vision that guided Dell and EMC in its $58 billion combination—the largest in the history of the tech industry. But the road to a seamless Day 1 launch and value-focused transformation was truly uncharted territory, as nothing of this scale had ever before been executed.

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Redefining the makings of a tech M&A

Both Read and Howard Elias, then president and chief operating officer of EMC and current president, Dell Services, Digital and IT, were tapped as co-leads for this challenge. Together, they formed the Value Creation Integration Office (VCIO). Focused on running the integration itself, the VCIO brought together leadership from across the two companies. Its first task was selecting a trusted advisor to help execute the merger.

Deloitte has extensive experience working with organizations on M&A engagements but, beyond that, it was the organization’s ability to look deeper that differentiated Deloitte from other professional service advisers. “Deloitte knew this one had to be different. There was no playbook for this,” Read says. Elias echoes the sentiment, stating, “From the beginning, Deloitte worked with Rory, me, and the VCIO to understand what we were trying to accomplish in order to help us shape the mechanisms and frameworks to achieve success.”

Once the official selection was in place, it was time to get to work.

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One goal. One team. One vision.

Deloitte’s first recommendation was to implement a value prioritization framework in order to help identify the most critical milestones that needed the attention of the VCIO. Through a customer-first lens, the team prioritized and executed 20 percent of the opportunities that presented 80 percent of the accretive value.

Lukas Hoebarth, principal, Deloitte Consulting LLP, recalls the next challenge surrounding dependencies between workstreams. “There are thousands of people across the world involved in a merger of this size. Individuals participating in each workstream will have an understanding of their own responsibilities but may not realize how their activities impact others.” Hoebarth helped more than 20 workstreams identify potential risks and issues and proactively plan for them.

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Driving toward Day 1 with digital

Deloitte team members quickly recognized that, due to the sheer size of this tech M&A, they needed to deploy an efficient set of solutions in order to meet the timeline. Deloitte assisted in the development of digital tools, including a welcome eGuide that provided day-to-day job information for more than 140,000 employees worldwide. In addition, Deloitte deployed an e-runbook targeting 40,000-plus sales professionals with guidance on how to efficiently cross-sell the new portfolio of products on Day 1.

From subject matter specialists in go-to-market, IT, human capital, supply chain, real estate, finance, and tax, the cross-functional experience that Deloitte was able to apply over the course of the 11-month journey certainly contributed to the merger’s ultimate notoriety as the new M&A case study blueprint. Read notes, “Deloitte delivered, they executed, and they did it with outstanding professionalism.”

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The power of the combination

September 7, 2016, marked the official close of the deal, with Dell and EMC becoming Dell Technologies. As the company settled into its new operating model, specific metrics were used to measure the success of the combination–customer Net Promoter Score (NPS), employee NPS, financial impact, and relative market performance. Elias states that, “By all measures, we have to so far declare wonderful success for this combination, because every one of those metrics is higher today than it was prior.”

It was a technology M&A case study like no other that required a team of consummate professionals like no other. Between Dell, EMC, and Deloitte, the entire project was an exercise in collaboration, innovation, and thoughtful strategic planning. The end result made history and solidified the new company and its participants in the annals of the tech industry.

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Deloitte client spotlight: A technology M&A case study of success

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