7 Strategies for seamless post-merger IT integration People fist bumping at the office – post-merger IT integration

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The M&A (Mergers & Acquisitions) landscape is changing rapidly, not only because of the pandemic but also due to the acceleration of digitization. Large organizations are acquiring smaller, fast-paced, digital new-age companies in a bid to remain relevant and counter competition in an environment that is quickly becoming defined by technical practices.

About the authors

Ramanan Sambukumar is Director of Post-Merger Integration and Anand Narayan is Global Business Manager at Wipro.

These small companies are nimble, agile, and have a start-up working style that is diametrically different to large corporations that are more process driven. It is important to consider that the goal of the new combined organization is to increase overall value through joint go-to-market strategies and cross-selling services to acquire customers and key stakeholders. For the new organization, technology becomes the enabler of success for information sharing, collaboration, and communication. The role of IT in particular is essential in ensuring a seamless integration; providing visibility and control for both parties will help them to reap the benefits of their partnership, increasing business productivity and growth. Hence, every acquisition must involve a well-thought-out strategy to ensure it is a win-win for all.

Seven strategies for success

1. Involve, don’t just inform

Avoid underestimating the efforts and technical expertise required for IT integration. Sometimes, integration activities start too early which can cause uncertainty and delays as entity teams may be ill-prepared. Involving and informing teams, process documentation and setting realistic timelines are essential in creating a solid foundation to build upon.

Furthermore, it is important to recognize that the best decisions can fail if the team responsible for the implementation doesn’t know or buy into the decision. Both parties being involved and agreeing on the plan with regards to resourcing, budgets, and timeline will help to avert delays and prevent persistent entity or customer-specific issues.

2. Communicate clearly

Communication and clarity are wholly integral throughout the integration process; the absence of this can severely impact the relationship between both parties. For a smooth integration, it is important to have a dedicated Change Management team involved, which will help when it comes to proactively communicating non-negotiable items and working with entities towards agreed timelines.

Simultaneously, end-users must be trained thoroughly so that the value proposition is understood and appreciated, and restrictions, if any, are accepted positively, without much or any resistance from employees.

3. Align entity IT team members with the broader IT function

A successful integration can take time and lack of prioritization stifles progress; existing priorities may cause designated leads and entity leaders to not have enough time for the acquired organization, which can destroy credibility.

In this case, the entity and parent teams should work together under a single leadership so that priorities are aligned, and the existing teams can support their business and relationships. Appointing dedicated integration managers and team members will also help maintain forward momentum. It is important to make sure that uncertainties are addressed with transparent communication, which will help to boost productivity. Post-merger job satisfaction should become a priority for everyone involved, with clear conversations around team alignment and role enhancement.

4. Set realistic IT integration timelines

Poor integration planning and governance leads to unrealistic timelines for outcomes; goals keep changing and key decisions are delayed, which inevitably leads to frustration. In this circumstance, taking a step back and doing some business analysis before implementing any changes can ensure that both parties are happy with the work processes.

Understanding the intricacies and requirements before setting an integration timeline is essential in ensuring that current business support is uninterrupted during the integration process. Executing too quickly without change management or resource planning will result in poor end-user experience and disruption to business operations. Committing to realistic timelines and focusing on end-user experience can help to provide exemplary support throughout the IT integration, while making sure the business continues to run smoothly.

5. Understand the entity deeply

Organizations must be conscious that the one-size-fits-all approach may not always work. Plans that worked previously may not necessarily work under new circumstances, as each IT environment is unique and requires a different approach, based on the challenges they face. This needs to be approached methodically to help avert the risk of delays.

Here, a deep understanding of the entity’s work methodology will help craft the right IT strategy and desired change management plan, which will help ensure both that parties are happy with their productivity going forward.

6. Treat IT Integration as a business-critical project

Lack of ownership is a problem that can stem from both the absence of participation from the entity early on, and a one-sided push approach in the planning phases. Instead of leaning towards part-time support, having a dedicated team of project management including business analysts, technical track leads, solution architects, data migration leads, domain experts, and end-user support will help to ensure that all aspects are taken care of, leading to the success of the integration.

User Acceptance Testing and Pilot Launches should also be considered when pushing any process or application to the acquired entity. In the case that IT teams are overwhelmed or inexperienced, a proper debrief session should take place during and post-integration so we learn from integration mistakes.

7. Hyper care

Employee experience should certainly not be overlooked throughout the integration and stabilization processes. If special attention is not given to provide new employees with a sense of belonging and trust, the organization may suffer from attrition and lack of trust. Transitioning to a different company culture can be difficult; the acquiring organization must acknowledge this from the start and create a smooth transition process for new employees with constant monitoring and dedicated hyper care being centralized going forward.

Transparency is also crucial in making sure that voices are heard; a proper governance structure and periodic leadership meetings will help to iron out issues and ensure that the integration is considered a success by both parties involved. Onboarding an organization is not the same as onboarding a hundred individuals; there is no concept of “lift and shift” in integration. Organizations are connected and the loss of key personnel can cause a ripple effect; it is imperative that the business carefully handles all processes where people are involved, regardless of their size.

A collaborative environment that respects the smaller organization’s culture is integral. Creating a foundation that aligns both organizations to the same suite of tools to set up meetings, comprehend project status, and deeply understand customers will benefit both parties and the output of their work.

Conclusion

In conclusion, understanding the distinct differences between small and large companies is critical. Organizations are intricate establishments with imperfections that need to be understood and dealt with care. Aside from the determination to achieve greater goals for value creation and performance, a successful integration demands executive commitment to tackle the risks associated with them. Knowledgeable IT function and the acquirer providing all the support possible, while recognizing and capturing the transformational value, is of utmost importance.

Source: TechRadar


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