Getting consistency out of M&As

Streamlining business basics paved a path to profits for Think Education.

Think Education sought to untangle a web of process challenges created by a long series of mergers and acquisitions. A 12-month integration project has put the private education company in a strong position to increase profitability, said Think Education IT director, Andy Donaldson.

“You can’t underestimate the importance of operating efficiency in any organisation,” Donaldson said. “The better you have that really nailed, the more able you are to handle things like M&As and handle growth. Because what you’re doing is growing your business on solid foundations.”

Think sought to gain consistency among its many colleges. There can be “some slight differences, but really you want to try to have as much standardisation in the way you operate as possible, because that gives you the ability to start to get scale and leverage from your resources”.

Donaldson said Think Education was “built up by two entrepreneurial guys who bought smaller private education companies and brought them under the Think banner”. Eight colleges were brought together in a relatively short period of time, he said. Seek Ltd acquired Think in 2009, and found a business that had a number of strong individual brands but low integration. “To a large extent, [Think] was still really operating as a separate organisation in how it did business.”

He joined the company and immediately brought in a team of business process consultants. The resulting integration project was “the biggest initiative that the organisation worked on” during the second half of FY2011 and first half FY2012. “It really was about fundamentally changing the way we operated.”

Priority areas included reviews of “how we were recognising revenue, our billing processes [and] some of our academic processes”. Integrating disparate and aging infrastructure was a major IT challenge, Donaldson said. “There was no wide area network interconnecting the business and there was no centralised way to manage assets on the network or user accounts.” Think also sought to automate many of its processes and to unify and optimise use of among the colleges.

“There were plenty of bumps along the way. Occasionally, timelines slipped. The actual implementing of the technology changes into the business was challenging.” It required management to change its historical practices, Donaldson said. “But broadly speaking, it went smoothly and we got a good result.”

Think was “lucky” to have supportive management, Donaldson said. “Building the system isn’t easy, but getting the people to adopt it is always the biggest challenge in my experience.”

Veterans in the business can be “very embedded into their way of doing things”.

“There are always pressures to try to commercially grow business and focus on improving profitability.” Donaldson disagrees with people who see process enhancement as running counter to that philosophy.

“You may be stopping in one sense for a bit,” but when processes are overhauled and the focus shifts back to profit growth, “you’re going to be much more empowered because you sorted a lot of the basics out.”