Business Transformation

The technology Integration levers for smooth M&A transitions

The primary aspiration of business leaders is Growth – both linear and non-linear. Non-linear growth is what we call inorganic growth, through Mergers & Acquisitions (M&A), and re-badging (acquiring a part of the business along with people & infra) between two or more companies.  

A major challenge and the key factor for success in any M&A deal is the smooth transitioning and integration of two organizations, including people, processes, technology, branding, and so on. In recent years, technology integration has been the most complex, and yet the most important success factor, considering most new-age businesses use technology for end-to-end operations.

In this scenario, identifying the best ways through technology for Integration & Operations management is crucial. Below are stages that are key for successful integration:

Complete due diligence in advance…

• To understand the technology landscape of the other organization
• To know their IT Strategy, processes, and operations
• To know the volume of activity involved and for assessment of effort therein
• To identity major expense areas
• To identify and mobilize the relevant talent pool

Identify the best approach for Integration…

• Big brother approach (Should be done this way; Follow our best practice; Align with us & use our processes, etc.,) is NOT the best approach
• Large-to-small enterprises have different work cultures, with a unique set of strengths and weakness. Perform an objective assessment to identify the ‘Best of Breed approach’
• Select the members with the right skillsets from each team to bring synergy, address complexities, and minimize disruption

Detailed audit of technology infrastructure…

• To collect necessary data points to help in planning and implementation of processes
• To access investments and expenses involved
• To understand contracts, commitments, current limitations, and challenges in the system
• To take inputs/feedback from key stakeholders
• To identify cost-saving opportunities
• To identify the complexities and risks involved, and the resources needed to address them

A good program management team is necessary…

• To represent cross-functional teams of both \ all organizations involved
• To define success factors, identify key milestones, list out all activities, categorizing short/mid/long-term deliverables
• To coordinate among team members effectively
• For periodic reviews that are necessary to clear issues, provide guidance, and ensure continued momentum
• To allow team members to focus on short-term milestones and deliverables
• For sharing periodic reports and updates with the management team and other stakeholders. This is necessary to showcase progress and inform challenging areas to seek management support.

Formal closure of integration program…

• It’s important to Communicate the closure of the Integration program & Celebrate the success.
• Publish completion/closure of the project, with related data points. Success stories can also be shared, and contributors to be explicitly rewarded
• Document what didn’t work, related learnings, and how it can be done differently
• From this experience, create a Process document/Playbook, or update the existing documents
• Ensure this documentation is part of knowledge management programs and is available for others to refer for future use

There are certain important aspects to remember specific to technology integration. Domain Integration, for instance, is an important factor to consider. Which domain (Company A or Company B) will be the default domain when two companies merge. The decisions taken by the senior management in this regard plays a role in the branding of a merged entity.

As part of details of Integration, decide standard endpoint image for security updates and compliance. Enable/disable user access to infrastructure and applications, while merging the network & connectivity requirements. Here are a few other critical elements to be considered while integrating two entities:

• Alignment of Tech Assets, Licenses & Connectivity
• A detailed plan for reconciling & Integrating in-built or third-party software/applications
• Strategize to manage information assets
• Consolidation / integration of public Cloud / platform infrastructure & licenses
• ERP & CRM integration
• Consolidating websites
• Integration of IT operations as per ITIL framework
• Updating all vendor contracts to a single company’s database
• Identifying EOL, EOS / no longer needed hardware, software & licenses
• Reconciling all pending payments and payable amounts for the next few quarters
• Re-alignment of the technology roadmap
• Initiating common technology Strategy, Budget reconciliation and planning activities

Last, but not least…

Completing all the above and closure of M&A activities is not the destination. In business, de-mergers are also quite common. Hence, the “effective separation” of the above-listed areas must also be considered as a possible business scenario. In the end, it’s all about how smoothly businesses transition In / out and adapt.