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With IPO market sentiment improving, many companies are now considering taking advantage of a particularly favorable window.
Timing is key when it comes to public offerings. Windows can open and close quickly but acting swiftly can raise issues for executives trying to oversee the time-consuming IPO process while also running day-to-day operations. In our experience, companies that establish an IPO project management office (PMO) can improve coordination of the work required to go public while also being better prepared to operate as a public company.
Without strong project management, your company can experience significant delays or cost overruns that can materially impact IPO proceeds. At the same time, your teams may duplicate efforts, work on outdated assumptions, or spend time on tasks that ultimately prove unnecessary due to changing priorities.
External advisor costs can also spiral without sufficient oversight. To meet looming deadlines, you may need to hire advisors on short notice, often at premium rates. We’ve seen situations where poor project coordination resulted in cost overruns of 20% to 30% or more compared to initial budgets.
A well-structured PMO helps control these costs by enabling effective use of both internal resources and external advisors, reducing rework, and improving resource allocation.
Monitoring potential pitfalls
Aside from outside factors like market conditions and regulations, IPOs inherently have their own execution risks and challenges. The more common pitfalls we see include:
- Workstreams operating in silos.
- Inconsistent prioritization of IPO-related activities due to a lack of tone at the top as well as resource and bandwidth limitations.
- Shifting timelines and strategies that are not clearly communicated to the teams doing the work.
- Too much focus on going public versus readiness for being public. While marquee IPO workstreams like the S-1 and the roadshow get a lot of attention, being ready to operate as a public company is just as important.
- Project fatigue. Having too many status meetings often means not having enough time to get work done.
Establishing a strong governance framework to monitor progress, flag risks, and promote coordination can help address these pitfalls. While IPOs are often led by the finance and legal teams, input is required across the company. Different teams should be made aware of how their work impacts other functions and how they fit into the bigger picture.
Your PM team should establish the IPO workstream priorities and communicate them across the different functions. This includes providing regular updates regarding any changes to the project strategy or timelines. That helps enable alignment around more efficient use of time and effort.
Identifying the PMO team leader
Picking a “project champion” to lead the PMO team is an important first step. This person is usually someone already at the company who takes on managing the IPO work in addition to their regular job.
There’s no hard and fast rule as to what function the project champion should come from. We’ve worked with champions from finance, legal, HR, and corporate development. It is important that your project champion understands the company well and has the skills to bring the team together and keep the project moving forward. The time commitment is also a consideration. The champion should be able to devote time to the IPO process during project planning and as your company approaches major milestones.
Since project champions don’t typically have IPO experience, companies often hire external advisors to help. But management should make it clear that the champion is the one overseeing the effort.
The role of the steering committee
Effective IPO project management typically requires strong support from other top executives through a steering committee. Your committee should include leaders from finance, legal, human resources and corporate development. The steering committee should be led by a project sponsor—usually the CFO or their designee—who has the authority and accountability to help drive the IPO process forward and align the timeline to overall business strategy.
The steering committee requires timely, reliable information to enable quick decision-making. Without this executive-level support, PMOs can struggle to maintain momentum and address the process’s inevitable challenges.
What the PMO should be doing
Your PMO team’s first step is to perform a holistic IPO readiness assessment that analyzes your company’s ability to both go public and operate as a public company. The next step is to perform thorough planning across the various workstreams.
Basic project plan elements such as task, timing, and owner are the basic expectations when constructing a project plan. There are additional unique elements we suggest adding to an IPO plan.
- Dependencies: Mapping outputs from a single workstream that are required by others at a specific point in the timeline is a key requirement. But the PMO also should promote awareness of those dependencies at the workstream level and provide progress updates throughout the project.
- Maturity spectrum: Mapping each task to either the IPO path or public company readiness can ease prioritization decisions.
PM planning can also identify potential gaps in resources, especially with competing priorities and initiatives, to help develop plans for hiring additional staff or bringing external support.
IPO preparation is a long journey that requires significant effort, but instilling a strong project management framework can help make the process more productive and effective.
How PwC can help
PwC has a dedicated Project Management Advisory group with significant experience in IPOs. We can help you guide your company through the process both in setting up the PMO with goal setting and thorough project planning as well as ongoing monitoring with specific focus on risks, issues, and decisions. We’ve advised numerous companies on their IPOs and strive to help you identify risks and issues so you can prevent delays and budget overruns.
With you when the bell rings
To create a clear path forward, you should have the confidence that comes from working with a team of straight-talking advisors and getting actionable insights from a team of dedicated professionals. Find out how we can help you through each step of the readiness assessment process and beyond.
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