One of the most important components of any successful merger or acquisition (M&A) is the timely integration of two separate technology networks. Combining them into a highly functional networked technology infrastructure keeps the new business entity operating as seamlessly as possible, all while creating additional value from the combined capabilities.
Every modern-day business activity — employee email, payroll, sales prospecting, production, product inventory, and even recruiting — relies on underlying technology that is as free as possible from friction, outages, inadequate connectivity and frustrating downtime.
Integrating the technology stacks of two different companies can be incredibly challenging or surprisingly easy, depending on such factors as similarity or differences between the two companies’ respective technologies, software, and location(s).
Obstacles to consider
For large organisations merging together, unifying networks and technologies may take years. But for SMBs (small and medium-sized businesses) utilising more traditional technologies such as VPNs, integrations may be accomplished more quickly and with less friction. In scenarios where both the acquiring company and the company being acquired utilise more sophisticated SD-WAN networks, these technologies tend to be closed and proprietary in nature. Therefore, if both companies utilise the same vendor, integration can be managed more easily. On the other hand, if the vendors differ, it is not going to interlink with other networks as easily and needs a more careful step-by-step network transformation plan.
Taking these challenges into account, the acquiring company could devise a strategy to let any existing network contracts expire, but in the long-term scope of spending, this is going to prove to be more expensive than to be proactive about merging technologies in the beginning of the acquisition.
Keep an eye on your apps
Another key to a successful technology merger is to truly understand where your applications are going. For example, if two New York companies are joining forces, with most of the data and applications residing in the US East Coast, it wouldn’t make sense to interconnect networks in San Francisco. Along with this, it is important to make sure your regional networks are strong, even within your global network. In terms of where you are sending your traffic and data, it’s important to be as efficient as possible.
In the case that the acquiring company is absorbing a more technologically advanced company, it could be beneficial to take a step back and see what can be learned from those who have already experienced the transition to more sophisticated systems and networks. This is especially worth considering where the company acquired is smaller in size, and therefore likely to have made cost-conscious decisions when building out their network without added complexity.
On the opposite side, for modern companies that are acquiring more traditional organisations, it could be beneficial to examine the applications you intend to keep to ensure they will continue to work properly within a more modernised network. While it might sound counter-intuitive, there is always “that one legacy server” in the basement that is running an archaic network configuration.
Keys to success
While keeping some of these challenges in mind, there are six key tips that can help guide companies through the often challenging steps involved in merging one company’s network with another, while keeping both businesses running until the single technology stack is functional.
- Focus on end results – Start by thinking about what the end result will be, and what the new software/technology platform will look like for all users when the integration is complete. Working toward an expected final result keeps the entire process on track and focused on common goals even while fine-tuning integration strategy. It’s a far better alternative than “let’s figure it out as we go”.
- Have a plan – The risk of not having a comprehensive and detailed plan is formidable. Piecemeal integration opens the door to unexpected obstacles and problems. Develop a detailed plan, and begin integration only when the entire team is on board with the full scope, ensuring the beginning-to-end integration plan is well defined before giving the go-ahead.
- Assemble a team of stakeholders to reduce risk – Make sure everyone who needs to be involved is involved. Experts in IT, software engineers and designers, and the chief information officer will no doubt lead the efforts, but other key players should be part of the process, too. They include experts from human resources, change management, finance, and legal. Expert stakeholders might also be needed in locations where industry-accepted UCaaS/VOIP services might not be available, or where collaboration tools (e.g. Google Workspace) might be blocked by a local regulator.
- Communicate – Communication from the team is critical throughout the integration process, especially around change management. Well-designed plans might require less frequent or detailed communication because hiccups and challenges tend to be solved proactively.
- Allow ample time – Ask any technology engineer how long a project will take to complete, and the answer usually is, “it depends”. The same is true when merging two companies’ technology platforms. If the acquired company is in a new geography to you, be aware of lead times – from network delivery to supply chain – which might be different than your home market, and therefore need to be accounted for in your project planning. Just know that a start-to-finish integration can range from a couple of months to a year or more. Existing technologies like SD-WAN, though often proprietary and closed networks, can streamline integration by automating many of the underlying IT processes. SD-WAN democratises the network by providing visibility into all of its components, leading to smoother transitions in some cases.
- Consider a tech integration specialist – Your already-busy IT staff will be asked to take on additional duties and projects during a technology integration project. Partnering with a specialty technology firm, managed services provider, or integration specialist can help by offloading sizable portions of the WAN restructuring work while keeping your IT staff available for everyday duties and projects.
Technology integration projects can be overwhelming, but experience shows the work is more manageable and more successful if companies plan ahead and assemble the right teams, tools, and partners to move the project to completion. Put simply, there’s a fast way to manage technology integration, and there’s a right way.
Kristaps Petrovskis is chief technology officer at Expereo.
How to maximise value from IT vendor collaborations — In the first of a series exploring the importance of IT partnerships, we take a look at how to maximise value from vendor collaborations.
The hidden dangers of data in the M&A process — Delving into the hidden dangers that data can bring to the M&A process.