Mergers and acquisitions aren’t for the faint-hearted. But, they do continue to serve as strategic tools for growth, providing valuable opportunities to implement real change and achieve synergies.
For a merger and acquisition to go right, though, a lot of stars must align. And, this requires the adoption of the right approach from the start.
This approach must account for the critical role IT plays in creating a smooth transition for merging organizations. This is especially true in the financial services market and other sectors, where merger synergies directly depend on IT. However, the consequences of successfully calculating how to merge two different technology foundations can be dire. Generally, mergers and acquisitions are more likely to destroy shareholder value than create it.
Keep the Lights On
One outcome of any merger and acquisition is stress among operations and business functions. That’s why it’s important to ensure a mode of business-as-usual during the integration process. For this to happen, IT leaders must best prepare and equip their departments before starting the process.
According to Booz & Company in The Role of IT in Successful Merger Integration: “Many have already adopted advanced, service-oriented architectures (SOA) that are generally more flexible and adaptive, as well as designed to provide a platform that accommodates a wide range of business applications.”
Mergers and acquisitions are rarely frictionless. That’s true even when organizations do their due diligence and map out a viable integration plan. Any reduction in complexity goes a long way. So, it’s key IT leaders combine the IT departments of merging entities with reducing complexity in mind.
From software and hardware to data and staffing resources, as complexity is reduced, high-risk integrations must also be avoided. An added benefit: Costs typically go down, which improves the bottom line of the acquiring organization.
Establish an End State Architecture
While ensuring business-as-usual operations during the integration process, IT leaders must also work toward an end state architecture. This can support the long-term business objectives of the newly-iterated organization and its future growth.
The two organizations may even decide to migrate their entire IT infrastructure to the cloud. However, most organizations find they don’t have the knowledge or needed certification to transition to the cloud. In those cases, they must seek out specialists to help build, innovate and scale with the cloud. Making that transition to cloud allows organizations to explore multiple levels of flexibility. Have resources available anytime. Minimize operating costs. Improve business continuity. And enjoy a competitive edge over organizations which devote their IT resources to managing infrastructure.
Nowadays, IT plays an increasingly crucial role in organizations. There’s no indication of reversing this trend anytime soon. To ensure a successful merger integration, organizations must take IT into account and align it with business units at every stage of the merger. This requires deliberate planning and optimal execution of all planned steps.
Organizations with insufficient IT resources can turn to a managed IT services provider for help. With an MSP’s expertise, proven guidance and processes, any merger integration will achieve success.