Embarking on a merger is like an expedition through uncharted territory; however, the digital age has ushered in a new era where IT stands as a lynchpin for success.
Let’s explore how IT transforms a merger from a complex puzzle into a seamless operation, impacting everything from transitions to strategic goals.
This expedition delves beyond the intricate layers of the enterprise stack, venturing into the realms of data quality, digital skills and strategic investments. And it doesn’t stop there – once the merger deal is set, the chosen technology becomes a formidable force, shaping the destiny of the newly-unified entity, significantly influencing:
- How smooth or disruptive the transition is;
- The speed at which operational effectiveness resumes;
- The speed at which improvements in KPIs are realised;
- The provision of a common and consistent view of the organisation to tenants;
- The ability to identify and remedy asset risk, appraise stock condition and manage assets;
- The introduction of efficient and consistent processes across the new organisation;
- The realisation of savings and further investment opportunities.
With the added time pressures of merger dates, here are a few essential activities IT functions should initiate as soon as a merger is confirmed.
Set up an independent and dedicated team
The merger should be classed as a strategic priority IT project, with a dedicated/ring-fenced team integrated with the broader M&A working group.
Perform a critical and independent evaluation of both technology estates
Even if both parties use the same system(s), they will be configured differently so assess their functionalities. Don’t duplicate functionality or primary data, seek rationalisation opportunities based on usability, contract renewals, licencing, hosting, hardware life, TCO comparisons, cyber-risk and the ability to enable strategic goals. Establish comprehensive records of all technology components; these records will serve as the foundation for making strategic decisions and developing action plans.
IT programmes
Review all IT pipelines – look out the burning platforms, assess what needs to be on the critical path and prioritise accordingly. Consolidate duplicate programmes seeking the same outcomes and focus on getting the IT foundations right (applications and infrastructure) to manage accelerated growth.
Increase cyber resilience and awareness
Protecting resident and asset data across the merger lifecycle is essential and goes beyond the basics of penetration testing, application security and data-centre compliance.
It’s crucial to ensure that disaster recovery and business continuity plans are up to date. In particular, undertake DR rehearsals because mergers can generate new system-access protocols, changes to finance controls and high volumes of data sharing, all of which increase cyber risk. Increase employee awareness of these threats through cyber-awareness training, cyber-attack exercises and updating data-sharing policies.
Data and integration
Regarding data management, what is the level of accuracy, where is it going, how is it calculated, and how is it going to get there? Understanding the challenge ahead and undertaking as much early preparation as possible is vital. Equally important is the quality of the data itself so ensure that data owners and data stewards are part of the project team. Set one common data standard, understand the gaps, take action and measure the improvements.
Data migration is high risk; don’t underestimate how long it’ll take and the complexities involved. Whether it is practice runs, sequencing, minimising dual-running or how to ensure efficient cutover, leveraging specialist data quality and migration partners will help to mitigate risk and increase the likelihood of success.
Staffing and skills assessment
As the technology estates merge, there will be opportunities to establish a new target operating model. However, this can’t be to the detriment of the smooth running of the new organisation. Undertaking an IT skills assessment during the early phase of the merger will help shape the new IT operating model and provide flexibility on how and when.
Validation and strategy
In essence, a unified IT, digital and data strategy should be developed and supported with robust business cases. The strategy should prioritise the optimal interests of the newly-established organisation, free from undue influence by either party, with independent assistance at every stage of the technology planning to thoroughly assess business needs and make decisions aligned with the strategic goals of the new organisation.
Summary
To make mergers and acquisitions a tale of triumph, assemble a dedicated IT team early in the process. Delve into comprehensive assessments across the enterprise and beyond, where actions taken in the initial stages resonate throughout the process.
Lauren Trevelyan is the principal consultant at Altair.
