What if CGI acquires another company?

As you all readers probably know, CGI is on a journey to do an acquisition that will strengthen our core business and provide customers with more value-centric strategic business solutions. In simpler terms, it will increase our earnings.

Serge and I were going last night over some potential targets this morning, and locations were always a key issue. Let’s say that there’s this good IT firm in Chicago, Boston or New York with $50M in revenues that does basically the same shit that we do, they’re up for sale because the founders are fed up with managing morons, they want to cash in and retire to the Bahamas so that they can drink margaritas for the next 20 years.

If we buy this firm and CGI already has a location in this town, the burden to integrate their employees with ours is a major challenge. You start by managing egos and who will report to whom, of course 75% of the new staff will be pissed off because 50% won’t get a promotion, another 25% will report to a new person who doesn’t care about their past corporate culture and the remaining 25% is pretty much brain dead.

Then it’s this make-believe part when we pretend that their corporate culture would be a nice addition to the CGI way, when in reality we couldn’t care less and can’t wait to integrate their employees into our billing system. Time is of the essence, so we usually deploy a PeopleSoft SWAT team within 4 hours following the press release about the acquisition so we can merge their billing and HR processes into ours.

This forced marriage is obviously doomed to fail and our goal is to retain 10-15% of the original staff after 3 years and 95% of their customers. If CGI is already the dominant player in the city, then those numbers are usually lower. So it’s a lot of effort on our end to drive this profitable growth, our employees do not realize how much work we’re putting into this when we know in advance the train is heading toward a cliff. But so is the price of buying a competitor.

An option of course if to acquire a company that has offices in places where CGI is not already present. We’re considering places like Turkistan, Uzbekistan and other remote places whose idea of information technology revolves around distributing AK-47 maintenance manuals on Torrent. The downside is, local government regularly tortures people for a bunch of reasons, and if you have employees detained for political motives they become not billable to your customers (unless the customer is the same government body that tortures them, then it’s something we would include in the contract to recoup any potential loss).

Note to self: check the classifieds this week-end under Business for sale.