CBA (Other exams): Post-Acquisition Capability Integration: Retain or Absorb

Use explicit criteria rather than organizational ownership: strategic differentiation, customer value, maturity, cost, risk, and dependency on the value stream. Engineer-to-order is a candidate for retention or harmonization because it is the stated acquisition rationale and likely contributes to custom-order win rates. Supplier quality may be harmonized if both companies need it but Precision performs it better. Procurement and supply-chain planning are candidates for integration because duplication creates cost and data inconsistency. Retirement should be limited to capabilities that are non-differentiating, duplicated, and not required by a value stream. The team should assess each capability against the custom engineered order and standard product value streams, because a capability that looks redundant in a functional view may be essential to a stage. The trade-off is speed versus differentiation: Apex's six-month target operating model pushes toward integration, but absorbing the engineer-to-order capability could destroy the reason for the deal. Publish the criteria before rating so Precision's leaders can contest evidence, not motives.

Value streams should define which capabilities must remain coherent for the customer. Map the custom engineered order value stream from inquiry through design, quote, production, and delivery, and the standard product value stream separately. Overlay the capabilities that enable each stage and mark which company performs them. If the engineer-to-order capability sits at the quote and design stages, integrating it into Apex's standard-product model may break the value stream even if the ERP consolidation looks cleaner. Information maps should show the supplier data, design data, and quality records that cross stages; duplicated supplier data across three systems is a signal that integration needs an information blueprint, not just an ERP decision. The business interaction matrix can show where procurement, quality, and planning exchange information. The reasoning is that capability integration is not an org-chart exercise; it changes how value is delivered, and the information dependencies determine whether the change is safe.

Create a joint architecture board with decision rights over capability classification and target-state sequencing, co-chaired by Apex and Precision chief architects. Include the integration PMO, a Precision business leader, and the CIO or delegate. The board should approve the classification criteria, the value stream scope, and any decision to absorb a Precision capability. Establish a principle that capabilities identified as differentiators require evidence before absorption, and that the burden of proof sits with the integrating party. Use a decision register and timeboxed reviews; escalate only disagreements that affect the $25 million synergy or customer commitments. This structure addresses Precision's fear without giving it a veto over all integration. The trade-off is slower early decisions, but the alternative, a CIO-led target operating model imposed in six months, risks losing the engineer-to-order talent and capability the acquisition was meant to secure.