Launched in April 2022, the Arcwide JV between BearingPoint and IFS, began with nearly 100 people in nine countries. It has since grown to over 300 people in 14 countries, providing an unrivalled combination of professional services and IFS cloud ERP experience to deliver people-centred business transformation.

Henri Tchang, Andrew Binstead and David Russell

Henri Tcheng (Head of BearingPoint Firm-wide Investments and M&A) and Andrew Binstead (Senior Vice President IFS Corporate Development), met with David Russell (BearingPoint M&A Portfolio Manager and Programme Manager for launch of Arcwide) to reflect on why Arcwide was launched, what contributed to Arcwide’s subsequent success and lessons learned from the launch.

Looking back, why did BearingPoint and IFS propose a Joint Venture together? 

Henri: Well, both parties are very complementary organizations, with similar cultures and a history of shared successful project delivery experience in 5 countries: we’d formed a strong and trusted partnership. 

Andrew: Just to build on that, I think it was really beneficial that IFS and BearingPoint are similar in size and ambition – this meant senior executives on both sides were directly engaged and invested in the process, which ensured we had a shared vision and determination to create the JV.

What results were BearingPoint and IFS hoping to achieve with the launch of Arcwide? 

Henri: The aim was to build a dedicated professional services firm centered around IFS Cloud implementations on a global level. Arcwide is able to provide end-to-end delivery services relating to the IFS ERP platform in a way that few other organizations can offer. 

Andrew: From an IFS perspective, given our rapid growth, there was also an overall objective to accelerate the growth of our ecosystem and the market capacity related to the implementation of IFS products.

What did the parent companies do at the start that contributed to the success of Arcwide?

Andrew: Well, Arcwide built on the existing foundations Henri mentioned, of complementary organizations with a trusted partnership. The initial idea of forming a JV was the inspiration of Phillipe Chaniot (now Arcwide CEO) and Marc Genevois (IFS President Western, Southern Europe & Latin America). This resulted in the joint workshop in Frankfurt in July 2021, where we aligned on the vision & high-level goals and realised that the JV had the potential to become highly successful!

Henri: Absolutely, although we didn’t have a name at this stage of course, just the code-name, “Project Brittany”. From the beginning, there was a clear and strong strategic rationale with solid support from the senior executives of both companies. We then ran a feasibility phase to validate the kick-off workshop findings and began developing commercial principles and a target operating model for the JV. 

What factors in your opinions supported the successful launch of Arcwide, following the feasibility phase? 

Andrew: A key factor was the development of a shared valuation model for the JV, which was used by both parents in planning and internal communications with key stakeholders. This was a key enabler throughout the programme launch phase. We also formed a joint programme delivery team, which worked collaboratively and effectively together for the next 7 months to launch Arcwide in April the following year.

Henri: Yes, and of course the programme team was supported by professional PMO and Deal Advisory teams, staffed by dedicated resources from both companies, to help co-ordinate the build and transaction-related activities needed to get the JV up and running. Not forgetting the Term Sheet we jointly agreed, which was critical to a successful deal, since we were able to identify and mitigate the key risks, agree up-front scenarios for exit, and so on.

Andrew: One other point we shouldn’t forget was that we were able to leverage relevant existing infrastructure services, processes and systems from the parent companies. This meant we could “jump-start” the build of the JV and didn’t need to build everything from scratch. 

Henri: Finally we should mention all the projects clients and experienced people we transferred from BearingPoint and IFS to the JV at launch: this was another important way we jump-started Arcwide, so that it was generating sales and revenue from Day 1. 

Looking back were what were some of the key lessons learned from the launch of Arcwide? 

Henri: An important point identified during our formal Lessons Learned session was that we might have recognised sooner the complexity of the underlying M&A activity: it was a blend of “build” AND carve-out, depending on which country we were launching in. 
 
Andrew: Yes, that’s a good point! We could also mention that the Term Sheet discussions went on longer than ideal: with hindsight we could have sought earlier alignment on Commercial Principles and Valuation approaches as pre-cursors to the more detailed Term sheet development. 

Henri: Then there was the quite lengthy legal entity incorporation process: we always knew these would take time, but even with professional management and support of the processes it would ideally have gone more quickly for some countries than it did; the process required a high level of oversight and interactions.

Henri: Another key dependency was branding: effort estimation and agency management are critical for this topic in order to get this key dependency in place in time, the naming of the new entity is on the critical path for the whole launch programme. 

Andrew: Yes, it took a while for us to get to the “Arcwide” name, but it was worth it in the end! I guess one last topic to mention relates to resistance to change from certain stakeholders. While the senior executives and core programme team were fully committed to the JV vision not everyone was onboard from the start. Involvement of dedicated Change Management specialists is essential to address people’s concerns and bring everyone along the same journey. 

Final question, Arcwide was a lot of work to get up and running, would you do it all again?

Henri: Without a doubt! We now know that much more about launching a JV from our experience with Arcwide. BearingPoint is keen to explore more JV-related opportunities, whether with another partner or client, or by helping the clients of BearingPoint to launch their own joint ventures. 

Andrew: Also fully agreed! This is not the first JV launch I’ve been involved with, and we see JVs as offering the opportunity to combine the best attributes of both parents and create strategic vehicles that can offer the market a unique and compelling proposition.

Contact BearingPoint

Alexander Bock
Global Senior Manager Communications
Telephone: +49 89 540338029