BK also needs to setup a Program office that acts as a go-to mechanism for all centralized coordination and control. Based close to its new headquarters in Oakville, Ont, this office must work with both BK’s business and functional units to attack crucial topics during execution, including staff assessment, training, systems development and migration, and tracking of results including key performance indicators. Integration teams should also monitor progress against detailed charters through a tracking system that is continuously updated by business and functional work teams respectively.
We also recommend that BK’s management integration team pours great effort into the installation in its merger's program management office (PMO), a nimble stand-alone synergy tracking and reporting system. This system should be able to generate real-time reports of synergy commitments, forecasts, achievements, and integration costs spent, committed, and forecasted by merger team, region, etc, with all of the inputs self reported to the headquarters by the various teams spread across the globe. In that way, the teams and the integration leaders would be able to obtain meaningful real-time insights on synergy capture progress without having to modify existing financial applications or processes. BK's synergy tracking and reporting system should be built with full cooperation and input from its CFO’s team. In terms of tracking, weekly or bi-weekly meetings need to take place between the PMO and the CFO's office as soon as the merger is in place to ensure that the self-reported results were actually showing up in the "official" financial and budget reports released by BK on a quarterly basis.
In order to guarantee its KPIs are tracked thoroughly, Burger King also has to make sure its synergy commitments are completely embedded into its new budget plans, which would allow its existing incentive and measurement strategy to play meaningful roles. This would in returns, give its C-suite executives confidence that synergy achievement highlighted earlier were in fact "real." To ensure that its acquisition moves took hold, Burger King needs to invest tremendous energy in developing the baseline of current revenues and operational costs. That way, the company would be establishing a clear starting point along with "buckets" for measuring synergies.
Making use of these tracking tools, some of the Key Performance indicators that BK can rely on in accessing the progress of its acquisition and tracking these synergies are stated below:
1. Once BK transfers 20% or more of its shares to the Canada, it would official switch its tax jurisdiction in the process as well, thus paying around 27% of corporate tax compared to 35% it had been paying in US. This will benefit the American company in tax savings to of approximately $2.1B CAD (assumptions stated in earlier report), as it can use the saved money to reinvest in the businesses or to fund the dividends and share buybacks. In order for this to be a successful strategy, the management at BK have to make sure they are in close contact with the policy makers in Washington for any foreseeable changes in the US tax rules or any possibility of imposing a retroactive ban on US companies headquartered abroad. The company needs to set up a tracking framework to make sure it’s aware of all the corporate…