3 integration considerations for Mergers & Acquisitions
October, 14th 2016
Think about the integration of lives when two people get married. Two existences, residences, and belongings become one, and often, the overlap in possessions means some decisions have to be made if it is to progress into a fully embedded union. Whose home? Which couch? Which set of dinnerware? Do we really need this beer sign collection?
Business mergers and acquisitions reflect a similar commitment toward positive growth, but the amount of things to integrate once the ink dries becomes a whole different ballgame. In fact, integrating two companies into one, and all that entails, is extremely cumbersome and complex, to put it lightly.
There are people, buildings, supply chains, financial and legal constraints, sales and fulfillment processes, and a whole host of other considerations to manage, not the least of which is technology. These systems and applications running each company prior to the acquisition presumably were crucial to processes in their previous lives, which leaves some tough decisions to be made.
If you’re lucky, you’ll have some of the same enterprise systems in place at both organisations. Even if you do, there’s a good chance you’ve got different workflows and integrations around them, and it’s unlikely they’ll share common patterns.
Your integration team, then, will be faced with two options:
Attempt to migrate to a common set of systems across the new enterprise. Figure out how to integrate the different, disparate legacy systems The reality is, you’re likely end up doing both – picking the best common system where migration is feasible and figuring out how to integrate systems where it is not. Even if you do select the best-in-class workflows for each enterprise system, the likelihood of doing new integrations to bring the systems together to form the optimal business process for the unified enterprise is very high.
Similar decisions need to be made around the choice of integration solutions in the new enterprise. Many companies have grown up with a range of integration tools and techniques fit for specific purposes and end up maintaining a disparate set of tools and skill sets to maintain this legacy architecture. Of course, this complexity only gets worse when two companies come together.
So how do stakeholders decide the path to proceed in a post-transaction world, where the systems and processes of two companies become one well-oiled machine to continue growing the business? What key considerations support a strategy for deciding which of the dozens of incoming products and services from a variety of vendors – many undoubtedly interspersed throughout the world – will make the cut?
The process begins with business and IT units finding common ground and getting on the same page. It’s not uncommon for the business side of organisations to assume the IT folks will just take care of the integration of systems into the post-transaction enterprise. However, an M&A transaction presents a great opportunity for business and IT to come together and determine how technology can best serve the needs of the new organisation.
The driving factor for coming to this agreement centres on the importance of data to any organisation, merging or otherwise. Data is the lifeblood of many modern enterprises, and it drives business decisions throughout organisations. In fact, the decision to merge/acquire was, without question, based on data-driven insights that led to decision-makers to pull the trigger on this particular business expansion.
The recommended course of action, then, is a single unified integration platform to consolidate and displace old integration technologies, integrate the business systems staying on post-merger, deliver high visibility to IT and business users alike, and support the seamless movement of data inside and outside the organisation. This solution should solve internal and B2B integration, and also accommodate one-off data migrations (for consolidation of existing data) and the ongoing integrations where it wasn’t feasible to choose a single system.
Here are three considerations for enterprises experiencing technology overload in a post-acquisition organisation and how single-platform integration technology protects the critical exchange of information that will power the business and supply chain going forward.
Consolidate Systems Applications
Post-transaction, data quality is at risk in a disconnected environment of disparate, siloed solutions. Duplicate and obsolete records, combined with data inconsistency, lead to poor data quality, and your single greatest asset – data – is in jeopardy if there’s no formalisation of best practices or unified integration.
The goals of a smooth transition, then, include harmonised business and data management processes. And that’s where a standardised platform supporting application and B2B integration comes in to help the organisation:
Identify common data standards and approaches to sharing data, reducing exposure to costly data loss. Replace outdated applications and systems with more efficient ones with expanded capabilities, including high-speed and large-file transfer. Get rid of workflows that don’t work well in today’s hyper-digital ecosystem. Reduce overlapping business partners and vendors performing services. Adopt or adapt to fit current needs but also the organisation’s future needs. A flexible yet unified integration platform streamlines the architecture via expanded managed file transfer, secure file sharing and B2B/EDI processes, while also delivering such modern connectivity needs as application, cloud, and big data integration.
Cleaning out the proverbial IT closet positions the post-transaction enterprise for leaner, more refined communications processes as it faces its brave new world.
Accelerate the Transaction’s Benefits
Without question, merging two companies is a strategic growth move for a greater good, and these two businesses look to gain multiple competitive benefits in the process. Integration is essential to the success of the acquisition, and if critical information flowing among applications, people, and systems is not consistent, realising any business value from the acquisition may be compromised.
Some of the targeted benefits of a merger or acquisition include:
Uniting complementary products or services under one proverbial roof. Increasing market share, customer base, and lines of business. Combining resources to reduce costs, eliminate duplicated facilities or departments, and increase revenue. Accessing new funds, assets, and infrastructure for further product development. Gaining better production, development, or data facilities, which often can be more expensive to build than buy. Deploying a robust technology supporting strategic integration allows post-acquisition organisations to:
Streamline and automate processes for current customers, exceeding service-level agreements and reducing customer churn. Offer flexible integration patterns, including support for multiple advanced protocols, to say “yes” to new business. Connect to emerging cloud, hybrid, and API technologies to support agile operations and expanded development capabilities. Support enterprise-wide visibility into past, present, and future workflows for data-driven analysis. Increase data quality – from customers, partners, suppliers, etc. – for more accurate returns on big data initiatives. An unintegrated, disjointed business ecosystem can bring processes to a slow crawl, but a fully integrated environment accelerates delivery of the competitive advantages to be gained when two companies join forces.
Drive Organisational Flexibility
The power of a unified integration platform lies not only in the ability to integrate technical systems but also to integrate and empower human resources. Because of the complexity of the transaction, many companies designate integration liaisons to manage specific projects and delegate workloads.
When the heavy lifting is done, however, these project managers fail to hand off some of the IT integration duties. Arming business users with capabilities to deploy easy-to-use, IT-approved systems frees up the IT department down the road from addressing single, tactical workflow problems.
However, this citizen integration functionality, as it is known, only works if the solutions are actually easy to deploy and use. The need for security and governance shouldn’t outweigh the need for ease of use among end users, and an advanced integration platform, with an intuitive interface and strong admin controls, delivers both. The organisation then can move its more capable IT resources onto advanced projects that add business value and drive new revenue.
The strategy of enabling citizen integrators helps keep the business from regressing into a pre-transaction scenario where multiple rogue solutions – consumer-grade cloud applications, FTP servers, and more – were introduced only because employees needed something to complete their daily responsibilities. It also inspires confidence in team members when they see a tight data communications workflow and corporate security policy that also charges business users with helping them help themselves.
With the increases in technologies, endpoints, employees, vendors, and more coming into an enterprise after a merger, competitive enterprises cannot waste the opportunity to consolidate systems and align resources to build a better business future. A stronger business will emerge when an organisation deploys a single-platform integration solution for all of its application, B2B, cloud, big data, ad-hoc, and citizen integration needs.
Mergers and acquisitions are already massive, complex transactions, but organisations choosing reliable integration technology can protect the integrity of their mission-critical information and enable the efficient flow of business throughout this tumultuous time.
A single-platform communications solution delivers the migration and integration balance necessary for thriving in a post-acquisition business ecosystem.