From Iverson A. to Richard A., the Lumpkins of Mattoon, Ill., have lived up to the company’s current name for more than 100 years, for Consolidated Communications Inc. continues to be a consolidator or, as current CIO Chris Young describes it, an acquirer and an integrator.
People may be familiar with the company’s latest acts of consolidation: the acquisitions of North Pittsburgh Systems Inc. (NPSI) in July of 2007 for $375.1 million and Dallas-based TXU Communications in April of 2004 for $527 million. But the company, begun as the Mattoon Telephone Company in 1894, began rolling up small companies in 1906. In 1935 it merged with Illinois Southeastern Telephone, which had just rolled up Cole County Telephone and Shelbyville Telephone. In the ’60s, it picked up the Effingham exchange from Illinois Bell and some McLeod properties in 1997.
So you might say consolidation and integration are in the company’s blood. But today, it is safe to say that integrating telecom companies is magnitudes more complex than in years past. For today, telecom companies are also broadband providers and entertainment companies. They face stiff competition from cable and wireless providers and even the CLEC arms of their neighboring telcos. There also is the issue of multiple vendors and now next-generation infrastructure mixed with legacy infrastructure.
So what does it take to efficiently integrate an acquired company without losing customers through the upheaval?
The Playbook
The first thing it takes is to limit the upheaval. Consolidated believes it has done this by developing a very structured approach to integration. “The difference between us and others is our ability to integrate. We have a pretty successful playbook,” Young said.
The playbook starts with due diligence. Several departments contribute chapters to the playbook, determining the value drivers, creating and finalizing project lists, assigning project leaders and overall responsibility for the project. “That becomes our integration management office and is responsible for the implementation,” Young said.
The team gives itself 12 to 24 months to complete an integration. It used every bit of it with the TXU acquisition as the final result would become its template for further integration projects. TXU was the bigger company and used many of the same systems as Consolidated, making certain aspects of the integration easier.
Some of the systems the companies shared were a billing system from IBM Corp. called DPI, MetaSolv Software (now owned by Oracle), MDSI for pushing trouble tickets to the field, and Remedy — the service management company whose brand has survived several acquisitions itself, the latest being BMC Software in 2002 — and IBM Tivoli Netcool for element management.
