How to create a successful M&A IT integration strategy
From entering new markets to growing market share, mergers and acquisitions (M&As) can bring big business benefits. However, making the decision to acquire or merge is the easy part of the process. What comes next is likely to bring disruption and difficulty. In research reported by the Harvard Business Review, the failure rate of acquisitions is astonishingly high – between 70 and 90 per cent – with integration issues often highlighted as the most likely cause.
While the impact of M&A affects every element of an organisation, the blending of technical assets and resulting patchwork of IT systems can present significant technical challenges for IT leaders. Here, we explore the most common problems and how to navigate them to achieve a smooth and successful IT transition.
Get the full picture
Mapping the route of your IT transition is crucial to keeping your team focused throughout the process. But you need to be clear about your starting point. That’s why conducting a census of the entire IT infrastructure – from hardware and software to network systems, as well as enterprise and corporate platforms – should be the first step in your IT transition.
Gather requirements & identify gaps
Knowing what you’ve got is the first step, knowing what you haven’t is the next. Technology underpins every element of your business, so you should examine each corporate function and business unit through an IT lens. What services impact each function? How will an integration impact them? What opportunities are there to optimise? Finding the answers to these questions will help you to identify and address your most glaring gaps.
Seize opportunities to modernise
M&A provide the opportunity for IT leaders to re-evaluate and update their environments, so it’s important to look at where you can modernise rather than merge. This will ensure you gain maximum value from the process. For example, shifting to cloud infrastructure can enable your in-house team to focus on performance optimisation whilst also achieving cost savings and enhanced security. Similarly, automating routine or manual tasks using AI or machine learning can ease the burden on overwhelmed IT teams.
Implement strong governance
If you’re fusing two IT departments, you need to embed good governance early on. Start by assessing your current GRC (Governance, Risk and Compliance) maturity. A holistic view will enable you to target gaps effectively and ensure greater transparency of your processes. In addition to bringing certainty and consistency across your team, taking this crucial step will also help you to tackle any compliance and security shortfalls that may result from merging with the acquired business.
Clean up your data
Managing data migration can be a complex process during a merger and acquisition. It’s likely that data will be scattered across various systems, services, and applications. Duplicate data may also be an issue. This makes it difficult to gain an updated single customer view, limiting your ability to track sales and marketing effectiveness. The lack of visibility can also have a negative impact on customer experience. For example, having two disparate CRM systems may result in two sales representatives contacting a single customer, causing frustration and portraying your organisation as disorganised. There’s also a significant financial and reputational risk if data from the merged business isn’t managed securely. With all this in mind, it’s clear that developing an effective strategy and management process should be a key step in planning your IT transition.
Lead with communication
Change can be scary, and uncertainty is the enemy of productivity. That’s why communication is key to a successful merger and acquisition. Ensuring a frequent flow of information can help to combat this. However, IT leaders should also be mindful of creating opportunities for employees to share ideas and concerns.
If you are merging two IT departments, it is important to understand the cultural differences of the two businesses and where issues may arise. This will help you to develop an effective strategy for bringing the two teams together. While championing collaboration and knowledge sharing will go a long way to helping you achieve the goal of the M&A process – a better, stronger, more cohesive business.
How we can help
From assessing your existing IT infrastructure to cloud migration, data management and driving efficiencies through automation, we can support you at every step of your IT transition.
Transitioning your IT following M&A? Contact our expert team today.