The modern business world has become more dynamic and competitive. With hard economic times and increase competition, it is only wise for business leaders to plan effectively on strategies that will ensure that their companies remain competitive. Firms will always try to have a strategic plan that will ensure their perpetuity and competitiveness in their respective industries is not compromised. The success of the business will largely depend on the ability of its leadership to have an effective plan that is following the goals and objectives of the firm. It is necessary for the business entity to have set clear goals that act as a roadmap of what the company intends to achieve and the time frames (DePamphilis, 2008). Planning also requires the company to assess its capabilities and experiences so that its strategic plan is within their capacities. Also, the planning process must evaluate the opportunities available to ensure that their strategic plan aims at taking advantage of these opportunities. It is vital for business leaders to make sure that their policy choices are following the organization’s goals and objectives and also take advantage of the opportunities arising in the market (Kim, 2014). Developing a business acquisition plan is one of the major planning roles by business leaders, and we will have an in-depth analysis of the concept in this chapter.
Concept of developing business acquisition plan
Development of an acquisition plan remains one of the most significant roles in business management. As aforementioned, the level of competition and increased globalization has made it necessary for the corporate world to devise ways and means of remaining relevant and competitive in the modern business. Acquisition plan also known as an acquisition strategy plan or implementation strategy planning document is an important document that ought to be prepared with great care. It is a document that is prepared for varied reasons that must include all critical program decisions and milestones. It is also expected to address the high-level objectives of the program, the technical performance as well as address the high-level cost/budget and schedule estimates of the acquisition process (Öberg, 2012). Besides, the acquisition plan must address the risks that are associated with the program. It is prudent to prepare an acquisition plan that is complete, achievable and that addresses all the stakeholders’ requirements. In essence, an acquisition plan must ensure minimum costs and risks are involved in any acquisition strategy.
The process of acquisition planning involves defining and maintaining an overall approach for a particular program. The acquisition planning process guides all elements of program execution to transform the mission need into a fielded system that is fully supported and delivers the desired capability (Kim, 2014). The primary objective of acquisition planning is to provide a roadmap that will be followed to maximize the chances of successfully fielding a system that meets users’ needs within cost and on schedule. Acquisition planning is an iterative process; feed-Back loops impact future acquisition planning activities.
Weaknesses in developing a business acquisition plan
From the above analysis, it is clear that acquisition planning is paramount to the success of the organizations involved. Nevertheless, the process may at times not be very successful as a result of the various weaknesses involved in the process. The challenges are even more complicated where the acquisition process involves high quality acquisitions. One of the major weaknesses involved in developing an acquisition plan is a failure to identify all the major program risks and issues that are likely to affect the acquisition (Öberg, 2012). In most cases, the people involved in developing the acquisition plans are always in a hurry and may end up not identifying possible risks and issues that may be detrimental to the acquisition. From the analysis of the concept, it is clearly stated that an acquisition process must ensure the lowest possible costs as well as minimal levels of risk. Failure to identify these risks and other issues affecting the acquisition process will ultimately lead to failure of the strategic plan. A firm must always look at risk mitigating factors that will help reduce risk levels involved in the course of doing business (Pérez-Nordtvedt, Babakus, & Kedia, 2010). People participating in the planning process may hurriedly plan the acquisition process thereby leading a firm to acquire a business that puts its operations in a more risky situation than it was before. In some instances, the team is aware of significant risk factors through risk assessment activities but fail to plan for this during the selection process. Consequently, source selection of the offerors fails to address these risks during the performance of the contract. The development acquisition team fails to address how to deal with the selection problem to ensure that the risk factors are mitigated as much as possible. This would, therefore, mean that the acquisition process failed to achieve the objective of enhancing competitive edge and productivity.
Another weakness prevalent in acquisition planning is a failure to identify the optimum contract for each contract required for the program. The primary objective of any acquisition process is to ensure increased productivity and optimum use of finance and resources. This is however not the case always as some people involved in the planning process may fail to identify the optimum type of contract for each contract required in the program. In such instances, there are increased wastages of time and resources. Failure to clearly identify the optimum type of contract will lead to the conclusion of unnecessary contracts that will eventually be for no gain to the contracting parties (DePamphilis, 2008). Also, in such instances, the acquisitions may not see the full terms of the contracts and consequently will lead to massive losses. On the same note, the development team usually fails to fully and adequately address the type of contract involved in the acquisition process (Doole & Lowe, 2008). The team will blindly fall into an acquisition plan without giving a thought of why the type of contract is appropriate for the given strategy or risks. The team fails to understand that not all types of contracts are best suited for all the acquisition plans. It is essential for the planning team to ensure that they identify the optimum contract for each contract required for the program.
Inadequate or poor coordination between the different organs involved in the acquisition process is another definite weakness that leads to ineffective acquisition planning. It is important to understand that an effective plan will require intensive and extensive consultations amongst the different internal organizations and agencies within the group. Failure to integrate the different organs of the organization means the existence of information gap, and consequently, the acquisition plan may not be a success. A wide range of information is necessary to enable the players in the planning process to make informed decisions. It is vital to consult wide and wild to have as much information as possible to offer guidance in the acquisition process (Pignataro, 2015). Nevertheless, most acquisition planning fails to gather this information and hence ends up messing with government agencies or other companies. This will consequently imply that the acquisition process does not achieve its goals and objectives.
On the same note, the acquisition planning is also faced with another problem of not getting approval from the important support organizations and unions. For instance, most of the acquisition programs fail to have an agreement between the program office, legal, contracts, engineering and other internal support organizations that are necessary to enable provision of goods or services that meets the customers’ expectations (Doole & Lowe, 2008). For example, if the team fails to be in agreement with the legal team, there are chances that the acquisition may face legal challenges that will ultimately have adverse effects on the performance of the acquisition program. This is usually the case when the planning team fails to seek the necessary professional information that is critical for an efficient acquisition process.
Furthermore, acquisition strategy that is not well thought out is another weakness encountered in developing a business acquisition plan. It is noteworthy to understand that it is not easy to have a good idea of a thing that you have not taken enough time to think about. Failure to have a clear picture of what is exactly is the intention of the acquisition will mean that the plan will miss out on critical issues. For instance, failure to have a well thought out acquisition process will lead to cost overruns and schedule delays. Additionally, there will be several missing elements in the acquisition process that will result in failure to meet the goals and objectives of the process (Pérez-Nordtvedt, Babakus, & Kedia, 2010). Failure to have enough time to think of the acquisition plan will lead to the lack of clear requirements as well as the lack of measurable performance standards that are essential for an effective program. It is also worth noting that this failure has also been one of the leading causes of budget deficiency in the planning that eventually leads to ineffectiveness in the developing process. It is essential for the stakeholders to take the time to ensure that they take enough time to think of what exactly the objective of the firm is and how best the firm can realize this objective. Nevertheless, in most cases, people involved in developing the acquisition plans do it in hurry failing to take precious time to think of the intention of the firm and how this aim will be achieved.
Furthermore, developing a business acquisition plan is also faced with a weakness of effectively using the schedule charts. Acquisition planning is a process that entails different stakeholders and hence the use of schedule charts is inevitable. However, in most cases, the teams involved in the planning process don’t seem to understand the plan fully. In some instances, the teams even cannot answer questions on realism or achievability. Going back to an understanding of the concept of acquisition plan, we noted that it is vital to have achievable and realistic acquisition plan. Now, if the involved teams cannot answer questions on realism or achievability, then the acquisition plan itself will also not be a success (Kim, 2014). Business acquisition planners, in most cases, fail to understand the schedule charts that should serve as their road map to achieving a realistic and achievable plan. When they fail to fully understand these schedules, then the success of developing the acquisition plan will be dealt a significant blow.
It is also imperative to point out that the development of business acquisition plan is also faced with a problem of forecasting the future. For instance, the development team in most cases fails to address the issue of future competition. While developing the acquisition plan, the team will only look at the synergy derived from the acquisition process (Öberg, 2012). Nevertheless, there are high chances that the acquisition process may be a significant factor in future competition. Besides the issue of future competition, the business acquisition development team is also likely to address future increments. It is also crucial to put into consideration that there will be changes in prices of different things during the time of planning and the actual implementation. However, the team fails to address this issue during the planning process and as a result; there are hiccups during the application process (Kim, 2014). In most cases, the development team is short sighted and is only concerned with one time happenings and fails to consider the future changes and this has adverse effects on the success of the development process.
Developing a business acquisition plan could also be faced with a challenge of weak or missing acquisition strategy documentation. It is imperative to note that every acquisition plan is expected to have certain essential elements that ensure achievability of the plan. Nevertheless, most of these strategy documents lack this critical information and as a result, the success of the plans is doubtful. For example, a good acquisition plan must have a good outline of all the activities involved in the program and the different people and their roles in ensuring a successful acquisition process (Pérez-Nordtvedt, Babakus, & Kedia, 2010). However, most of these plans are prepared in a hurry, and such critical information is always missing. This makes it difficult to implement the strategy thoroughly, especially if the different players are not informed of their expected roles.
It is also critical to note that time frames for acquisition planning are another critical weakness that the teams involved in acquisition planning must deal with. Previous studies indicate that contracting officials have complained that there is no enough time to allow a robust acquisition planning process. It is imperative to note that acquisition planning process is a critical process that must be accorded adequate time to ensure a successful process. There are a lot of essential elements that must be included and considered during the planning process and failure to accord enough time will have adverse effects on the effectiveness of the planning process. Lack of sufficient time will also lead to omission of vital elements that eventually have adverse implications for the planning process (Öberg, 2012). The hurriedly carried out planning process may at times lead to protests or to the contracting company having to endure massive losses resulting from poor planning.
Another significant area of weakness that teams involved in acquisition planning must deal with is the issue of changes in the law. It is worth understanding that each acquisition strategy is governed by set rules and regulations that keep on changing now and then. Nevertheless, the acquisition planning team will in most cases disregard the changes in law and carry out the planning based on assumptions rather than following the provision of the law. This will have adverse effects on the success of the acquisition plan since such schemes will be faced with legal challenges. In most cases, the planning teams fail to understand the different statutory provision that guides the acquisition processes especially those that involve acquiring a foreign entity. These changing laws have remained a significant threat to the success of any acquisition process, and it is vital for the acquisition plan development team to be wary of the repercussions of not following these provisions. On the same note, the planning team has another weakness of not taking into consideration the changing trends in strategy. During the planning process, the development team has an objective of the acquisition strategy; nevertheless, the purpose is likely to change with time (Doole & Lowe, 2008). As aforementioned, the acquisition process is guided by projected opportunity and this opportunity is likely to change with time. The development team is required to change with the changing opportunities to ensure that the strategy achieves its objective. This is however not the case and in most cases they remain rigid thus compromising the effectiveness of the approach. Being rigid in the planning process is a dangerous approach to acquisition process since any change in opportunity may pose a significant loss to the acquiring firm.
Ways to overcome the weaknesses of developing business acquisition plan
It is prudent for the business community to understand that it is hard to gain growth in revenues with the current pace of economic growth. With this in mind, it is wise for these businesses to look at all possible options that can lead to increase in revenues and one of the most common options is through acquisition. Over the years, different organizations have successfully managed to have successful acquisition plans that have eventually lead to the realization of business goals and objectives (Öberg, 2012). Nevertheless, this success cannot be realized if the firm fails to address the major weaknesses outlined in the earlier parts of this chapter. A well thought out, and planned acquisition process will ultimately give desired levels of business performance. There some important steps that if followed to the letter, and then the development of the acquisition process will ultimately have the intended results.
One of the major ways to overcome these weaknesses clearly understands the exact requirements and the goals of the firm. It is important to note that if one does not necessarily have any goals or set objectives, then it will be tough to have an efficient development of an acquisition plan. From the onset, the planning team must have a full understanding of the whole program in involved in the acquisition planning. This will ensure that all the necessary elements of a successful acquisition plan are enshrined in the planning process (Pérez-Nordtvedt, Babakus, & Kedia, 2010). All perspectives required to develop products as well as the different needs involved in the acquisition processes are adequately addressed if the planning team is fully aware of the requirements. Essential areas such as technology and any other necessary elements are all catered for if there is adequate knowledge of all the requirements.
Another way of overcoming weaknesses involved in the development of an acquisition plan is starting the acquisition planning early enough. Giving sufficient time to the planning process will ensure that the development team is not in a hurry and will, therefore, be able to address all the necessary issues in the planning process. For instance, allocating enough time to the planning team will ensure that the team has sufficient time to ensure that the necessary documentation is done. Lack of adequate documentation has been cited as a major weakness in the acquisition planning (Doole & Lowe, 2008). It is prudent to note that the team fails to achieve optimum documentation due to the limited time they have at their disposal. On the same note, if the team is accorded enough time, the team will have enough time to conduct risk assessment workshops and guidance. It is imperative to note that an effective acquisition plan is the one that ensures the least cost and minimum risk levels (Pignataro, 2015). However, the most acquisition planning team has failed in the past to cater for all risk factors involved and as a result, the plans have failed as a result of unforeseen risk factors. Nevertheless, if the planning process is given enough time, the planning will involve all the necessary risk assessment criteria to ensure that the plan has least levels of risks and still there are ways of mitigating any risk that may arise during the strategy implementation.
Ensuring that the planning team is a cohesive and a proactive one is another important step towards overcoming the major weaknesses involved in the development of a business acquisition plan. If the team put in place is not committed to the duties placed on them, then it is impossible to have the desired levels of results. Business acquisition planning is an important aspect of business management, and it is, therefore, important to have a committed team spearheading the planning process (Kim, 2014). A proactive team will ensure that they have a well thought out plan. It is important to note that failure to have a well thought it acquisition strategy is a major weakness that the business fraternity must cope in the acquisition planning process. A proactive team is, therefore, necessary for a brainstorming session that will lead to having a clear objective of what the firm needs to achieve.
On the same note, a good assembled proactive team will also ensure that the team members are aware of what is expected of them in the planning process. It implies that the members involved in the planning process are fully aware of the intended program and can make a briefing to any interested parties. The understanding between the members of the planning team is also essential as it ensures that the team will not always be in wrangles but instead will have the total commitment in the planning of the acquisition process. It is also critical to note that a proactive team will also be capable of using the schedule charts as planned. The team will have a better understanding of the schedule and can easily answer basic questions on realism and achievability (DePamphilis, 2008). It is vital to note that an effective acquisition plan must be realistic and achievable, and these heights can only be achieved if the team involved in the planning process is fully committed to the course. A well assembled and proactive team will also look at the present and future effects of the acquisition plan. For instance, the team will be able to forecast future increments as well as possible future competition and hence put necessary measures to deal with such instances. A proactive team is also important in assessing the common risk situations and planning on the possible mitigating factors that can be used to reduce the risk levels (Öberg, 2012). A good team will be necessary not only in the planning stage but also during the implementation as it will offer the necessary guidance in the selection process.
The assembling of the planning team requires great care and concern as it is their views that will determine the success of the planning process. It is essential that the development team is composed of people with different skills and capabilities to make sure that there is a chance to exchange ideas and come up with the best strategy. To overcome the weakness of having team members that are not committed to the course and not aware of what is expected of them, it is important to develop an internal working team that is comprised of representatives from different internal organization units. For instance, it is important to have representatives from sales, finance, marketing, and operations to make sure that there is an effective and efficient planning process. Besides the internal organs of the business, it is also important to include members of the outside community such as a lawyer, valuation experts, accountants, investment bankers, insurance experts and financial advisors to offer their input in the planning process (Pignataro, 2015). To have a successful acquisition plan, it is imperative to have cohesive thinking and communication between the involved groups to ensure that there is a clear objective that the team has an obligation to achieve. Also, the planning team must make sure that they have a good leader who is conversant with the goals and objectives of the firm. Additionally, the team leader must also be capable of offering the necessary leadership to the team by having clearly defined roles for each member to ensure that they have a full understanding of the schedule chart. The team leader is also expected to liaise with the firm’s CEO to make sure that the top management of the company is always briefed on the significant developments made by the planning team.
From our analysis, we have noted that rigidity in the planning process is also another major weakness that the business community must overcome to have a successful acquisition plan. To deal with this issue, it is paramount for the business community to adopt a dynamic structure during and after the planning process. It is important to understand that the modern day business environment is constantly changing. Therefore, the development team should also not be very rigid as they fulfill their roles. It is vital that the team moves in agreement with the changing business environment as well as the goals and objectives of the firm. We have earlier noted that a good acquisition plan must aim at taking advantage of the available business opportunities. These opportunities are constantly changing and hence it is vital to have a plan that can deal with these changes (Doole & Lowe, 2008). A rigid approach in the planning process will ultimately have adverse effects on the success of the acquisition plan. For example, a commercial organization must respond to market changes or regulatory demands. Also, the technology is always changing, and it is prudent for the development team to ensure that the acquisition process is not affected by these constant changes in technology.
Another critical approach that helps in overcoming weakness involved in developing a business acquisition plan is for the team to ensure that the plan addresses all the necessary high-level requirements particularly those that are directly related to contracts and program milestones. This will help avoid unnecessary confusion that may arise as a result of failing to include all the necessary requirements in the planning process. Additionally, the development team must also ensure that it avoids high-risk technical, cost and schedule requirements/estimates. High-risk goals may have adverse effects on the success of the acquisition strategy if there no adequate measures to deal with the potential risk (Pignataro, 2015). If it is a must that the acquisition plan uses high-risk goals, then it is important for the team to make sure that they make it very clear in the acquisition plan that they are proposing high-risk goals. This should not end here, but the plan must also clearly indicate the high-level mitigation plan for each high-risk goal outlined in the plan. With such provisions, the implementing team will take the necessary measures to ensure that the high-risk goals become a success (Kim, 2014). It is also imperative to ensure that the acquisition plan is reviewed as often as possible and make the necessary updates.
In a nutshell, planning is an important aspect in the success of any business enterprise. Developing a business acquisition plan is equally important for the strategic positioning of a business enterprise. The plan is expected to have a clear description of the business, technical and support strategies to manage program risks and meet program objectives. It is, however, important to note the planning process is faced with numerous challenges that limit the success of the acquisition strategy. Lack of clear goals, incompetence amongst members, budget overruns and lack of advice from past experiences are some of the weaknesses that ought to be adequately addressed to ensure an effective acquisition process (Öberg, 2012). Nevertheless, if the process is handled with the necessary care, then the strategy will offer the necessary guidance of the acquisition program throughout the execution process. A good acquisition plan must define the relationship between the acquisition phases and work efforts, and key program events such as decision points, reviews, contract awards, test activities, production lot/delivery quantities, and operational deployment objectives (Doole & Lowe, 2008). In essence, developing a business acquisition plan is an important aspect that must be handled with care.
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