Simplifying the challenges of M&A IT integrations

Gareth Burton Orbus Software explains how CIOs can minimise the cost and risk associated with M&A integrations

 

In this quarter’s CEO survey from Fortune and Deloitte, CEOs reported rising optimism regarding the global economy, with 27% of chief executives feeling bullish about the future up from 7% last October, meaning this year could see an increase in corporate acquisition activity.

 

With this in mind, one challenge that will be at the front of every CIO or CTO’s mind is how tech stacks can best be integrated during mergers and acquisitions (M&A). Digital transformation has massively complicated the IT landscape, increasing the risk of data silos, wasted spend on duplicated resources, accumulating ‘tech debt’ and the impact on customer experience during increasingly complex integration efforts.

 

One way to avoid these situations and optimise these difficult processes is to produce a digital blueprint of both organisations involved in M&As. This positions CIOs to make more informed decisions on integration processes, providing a platform to streamline operations and minimise costs.

 

It also creates a solid opportunity to explain the choices made by CFOs and the wider technology teams about the direction of travel.

 

Optimising business processes

Where organisations tend to go wrong with M&A tech integrations is by not looking at the bigger picture, integrating IT systems is an extremely complex process on an IT infrastructure, software, information security (Infosec)  and data practice level.

 

This means that step one when integrating company systems should always be about mapping existing processes. Doing this is necessary to give CIOs and other IT decision-makers a more holistic view of company processes and systems, which can help them identify where the redundancies and inefficiencies lie.

 

This could mean identifying duplicated IT projects or solutions in the respective companies’ tech stacks. Or it could mean understanding where certain processes need to be aligned and optimised, for example, where manual data entry into several systems risks errors, duplicated efforts, or delays in creating quality data sets.

 

Properly mapping processes with a digital blueprint helps organisations address these redundancies and manage risks around data. It also helps them identify where synergies exist and where they don’t, as well as which processes to streamline to increase the efficiency of these workflows.

 

Improving decision-making

Perhaps one of the biggest challenges to M&A integrations is how you bring together two companies’ disparate data sources. Each company will have their own data repositories, so migrating data from their existing platforms into one unified database should be a top priority.

 

However, this is easier said than done. Migrating this data while ensuring it remains both secure and accurate, without compromising privacy and compliance standards, is a complex and time-consuming process.

 

However, not taking steps to migrate data risks creating persistent silos within the merged companies. This impacts the ability to have a single version of truth across both companies, which is not only a critical step to optimise decision-making and processes on a strategic and operational level, but can also lead to compliance violations and lost opportunities for cost-savings.

 

For example, imagine the newly merged company wants to send out a marketing blast but hasn’t consolidated its customer outreach lists. Some customers could then receive the blast multiple times, frustrating the customer and at the cost of the business.

 

M&A also introduces Infosec pitfalls; particularly in cross-border activity. In these situations, important topics such as data sovereignty become highly relevant.

 

Digital blueprints aid in mapping all data across merging organisations. They enable data architects, solution architects and IT teams to strategically plan for where each merged data set should reside, whether that’s in a public cloud platform to fuel advanced analytics and machine learning applications, or on-premise for highly sensitive data.

 

Rationalising IT to optimise integration costs

We’ve touched on cost a little bit, but unexpected integration costs are a common issue associated with M&As, particularly with larger-scale integrations.

 

The best way to tackle this is by rationalising IT environments. This is another area where the digital blueprint offers value, as the full evaluation and mapping of existing IT projects and assets is needed to help spot inefficiencies. Then, where infrastructure is overlapping, organisations can take steps to either retire legacy technologies or choose the applications or platforms that are the best fit.

 

One example of this can be seen in cloud architecture. With many organisations now relying heavily on public cloud deployments, merging organisations might find that one uses Microsoft Azure and another Amazon’s AWS.

 

Given the rising importance and costs of these platforms in most enterprises, a more holistic view of both organisations’ IT assets could help CIOs and cloud architects optimise costs by centralising workflows into one public cloud provider across the merging entities. Or, if both companies already rely on the same public cloud provider, there could be an opportunity to renegotiate supplier contracts for a better overall price.

 

Even in a hybrid environment, where a multi-cloud strategy makes sense, having the blueprint and reasoning easily available and communicable in dashboards and reports, can assist with acceptance and buy-in from the finance and technology communities.

 

In essence, you can’t know how to optimise cost without a holistic view of all the relevant information, and a digital blueprint ensures the decision-making process is data-driven, accessible and fully optimised.

 

Aligning technology strategy with business goals

With IT landscapes becoming increasingly complex, M&A integrations can be a serious headache for organisations flying in blind.

 

If CIOs want to spearhead a successful integration, they should consider producing an accurate digital blueprint. Mapping out every level of the organisation to make sure their decisions are data-led and well-informed is an absolute must.

 

Gaining a comprehensive view of the IT landscape is the key to transforming their tech estate into a holistic technology strategy that aligns with their organisation’s business goals.

 

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Gareth Burton is CEO of Orbus Software

 

Main image courtesy of iStockPhoto.com and amgun