Mergers and acquisitions (M&As) are more popular than ever. In late 2017, The Financial Times reported on the unprecedented wave of M&A activity noting that it had exceeded $3 trillion for the fourth consecutive year, writes Mark Boggia, Director of Global Partner Learning and Development, Nexthink.
Additionally, data provided by the Institute of Mergers and Acquisitions shows an increase in the number of transactions as well as their overall value. If this upward trend continues, it’s feasible to say that most people today are likely to either work in a company that will at some point undergo an M&A process, or will have to manage the integration or divestiture of an organisation themselves. However, this appetite for M&As seems counter-intuitive, given that typically 70-90% of acquisitions are unsuccessful.
Why do M&As fail? Poor due diligence – where people made assumptions about how they were going to execute going forward, without having the insights needed to execute well – is usually to blame. When it comes to executing a successful IT integration, what key decisions do organisations need to make? What information do organisations need to have in order to increase their decision-making capabilities?
Assessing the Network
The initial challenge is to gain a full and complete understanding of the target organisation’s IT infrastructure, as well as the underlying relationships between its various components. This complexity cannot be underestimated, and conducting an inventory of all of the moving parts across multiple platforms and systems is immense. Not only do organisations need to understand what other applications and services are sharing the same infrastructure, but also which other infrastructure components are being accessed by the application – the complexity of the whole estate can only be understood by getting a full picture of the network’s complexity. Only then can informed decisions be made related to divestment or absorption.
Using digital experience management software that feedbacks real-time data to IT teams, organisations can rapidly understand who is consuming the applications, the destination, servers and breakdown applications, by business units. It’s possible to then provide a complete end-to-end view of the entire IT infrastructure to understand all applications, connections and infrastructure involved, while a real-time view of this information enables organisations to visualise the results for actionable insights.
Continuing Post-Acquisition
Following from informing the pre-acquisition IT strategy, businesses can’t overlook how their plan will continue post-acquisition, and how this can impact on user experience. By capturing operational performance data about the actual device and the user’s experience, which is rarely taken through standard inventory systems alone, organisations can source a representation of data that enables teams to make smart decisions about what the combined IT strategy could look like, and what they need to consider to achieve this.
On example is that, in many M&A situations, duplicate functionalities with applications occur when companies have differing products that do the same thing. For instance, merging organisations may have two different conferencing facilities: Skype for Business and GotoMeeting. With digital experience management software, it is possible to track the relative consumption of both products and calculate the cost benefit of consolidating down to a single provider.
In addition, the migration can be fraught with issues such as user consent, unknown dependencies and other problems. Using communication tools that survey employees, it’s then possible to track and compare user sentiment and feedback. For example, those using GotoMeeting can be surveyed when they run the application as to the reason for not using Skype for Business. By leveraging both user sentiment with technical data, organisations are able to combine their IT organisations effectively with the least disruption.
The underlying trend of M&A activity is upwards, meaning more downward pressure on IT to execute IT integration strategies that are impossible to effectively execute without an analytics strategy. To succeed in M&A IT integration, organisations need to collect comprehensive and meaningful data and insight regarding the consumption of IT, in order to make full assessments, and therefore make more informed and smarter decisions. This is more than an asset inventory exercise. Organisations need to understand processes, what services they have, and what the underlying IT infrastructure is.
Finally, it’s paramount to manage the transformation to a new combined IT organisation by providing real-time insight regarding the user experience and impact on productivity to ensure continuity of service and minimal disruption. The challenge is about measurement, and about making smart decisions.
