Lack of foresight when it comes to merging IT systems is one of the biggest roadblocks to a successful merger and acquisition (M&A). Regardless of the driving force of the union—a synergistic growth strategy, an unanticipated opportunity, or a lucrative buy-out—M&As can be tactical tools for growth.
In the not too distant past, M&As weren’t so technically complex; maybe each company needed to integrate a couple systems. With a quick transfer, the two became one. Today, it’s a different ballgame. Each company likely brings its own data centers, hardware, back up plans, and applications, which all need integration.
Thus, enterprises must choose among dozens (or hundreds) of types of technology—not counting the platforms and applications that must also be considered. Dealing with IT post-transaction can be a nightmare, especially when you consider how a bit of due diligence could save a world of headaches. The challenge is choosing the right solutions to expedite IT integration while keeping customers and employees happy.
As I’ve said, planning before the merger is obviously crucial for IT. Some industries—like finance—understand this intrinsically, and in this field, the IT merger often drives business restructuring. A failure to successfully integrate IT infrastructure can mean a significant hit on the bottom line. To avoid this, keep these considerations in mind.
- Usability: Seek Out an Intuitive System
Choosing which systems are the simplest to use and navigate is perhaps most important when it comes to the successful merger of technologies. Usability is relative—what works for one company may not work for another. Examine both enterprises’ cultures, and then determine which systems will work best for the newly united business. Once the companies unite under a single vision, establishing an IT infrastructure is clearer.
- Scalability: Choose Adaptable Technologies
Consider this: Every year or so, computer capabilities double—as do the information technologies that use them. Advances in technology are excellent, but they can cause trouble if you must always pay to keep up. Choose technology that will grow and change with your business.
- Value: Remember It’s More Than Numbers
Of course, M&As are all about the numbers. But the merging of technology is more than just crunching a spreadsheet. Leaders must consider ongoing maintenance and IT upkeep, but they also need to foresee a less tangible value: innovation.
- Innovation: Keep It at the Forefront
A good IT infrastructure will leave room for innovation; it should use what works best for today and easily adapt to what’s best for tomorrow. Short of a crystal ball, these practices can be hard to predict, but you can start by evaluating a few key metrics:
- Employee satisfaction and retention
- System availability and efficacy
- Operational efficiency
- Leadership: Choose Leaders Wisely
When combining IT, consider who is emerging as a leader in the integration process. Solid leadership is crucial to any large-scale business, but this is particularly true when a pending M&A is shaking things up. Uncertainty from the top will slow (or even halt) integration.
An effective leader will look through the nooks and crannies of both IT departments and intuitively understand what is best for the newly merged corporation. While I agree that CIOs should still facilitate the discussion, experts intimately acquainted with the companies’ technology should also weigh in.
- Integrate: Remember the New Vision
During an M&A process, the business that emerges will change—as will its vision. Those in charge of IT integration should consider which solutions will be most beneficial to that new vision.
- Security: Be Smart
The last few major security leaks certainly brought this to our collective attention, but there are ways to intelligently approach tech and avoid security breaches. Leadership should be thoughtful about Bring Your Own Device policies. Shadow IT—applications or resources used without the department’s approval—is a serious security risk.
I’ve mentioned before the benefits of embracing Shadow IT, but the rewards for using it must be balanced with the risks. Considering the prevalence of the Internet of Things, it’s not really a matter of whether it’s going to happen, but how you can prepare for it. The start of an M&A is an ideal time.
The central focus in a successful technology merger is realizing that there are no quick fixes or easy shortcuts. Plan diligently, research thoroughly, and keep everyone in the loop. Between 50 and 70 percent of mergers and acquisitions fail or fall short—don’t let yours be one of them.
Additional Resources on this Topic:
The Best Advice for CIOs Facing a Mergers and Acquisitions (M&A)
The Importance of a Data Merge in Mergers and Acquisitions
Top Five Big Data Challenges for CIOs
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Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.