Acquisition Integrations: Merging Technology Stacks Seamlessly

Every company considering an acquisition of another entity is trying to answer these two questions: How to get the most value out of the deal...and how to successfully integrate them into existing business lines. Of the many pieces where integration is necessary, a critical component that brings some unique challenges is the technology stacks driving both businesses. Southernmost’s Geoffrey Cole explores the critical success factors of M&A technology integrations and how companies can get the most value out of the experience.

Choosing the Players and Gathering Consensus

The first step with any integration is recognizing that there are more voices when it comes to decision-making. You’ve successfully made the deal and now you need to traverse what comes with it. Getting leaders from both groups onboard to steward the integration will be a challenge. Understanding early when to include people and who will own technology decisions will aid and maximize the value your integrated stack delivers. Consider the following challenges:

1. Your doers may now report to managers from the acquired entity.

2. Vendors under contract at both organizations may now be competing for the same function.

3. Security may be done differently at each organization; perhaps one entity has intellectual property or data sensitivities that require greater precaution than what the other’s employees are used to.

4. Company cultures may have defined completely different working models for employees. Bring Your Own Device (BYOD) may be the working model for yours while managed devices are standard for the other.

Already you’ve identified a need for procurement leadership, security leadership, endpoint management, legal, and human resources to engage in various aspects of the integration. Your responsibility is bringing each group of leaders together and pooling their knowledge to effectively handle each decision point. Compartmentalize objectives within each group, eliminate unnecessary complexity, and navigate the vessel with confidence.

The Importance of Asset & Software Inventories

Once you have the decision makers assigned and the objectives identified, you need to know what’s under the hood. Technology stacks can be very complicated and far-reaching across businesses and the difficulty triples when there isn’t adequate visibility into what is being used. Considering these two steps will greatly improve your ability to integrate successfully:

1. What technology assets does each business have under management (cloud instances, standalone platforms, datacenter resources, user machines, corporate phones, VOIP systems, printers & fax machines, etc.)?

2. What software is present on all the assets?

With this information in-hand you will better grasp the integration scope. Similarly, this information and the tools for acquiring it may help your security teams identify risks that need to be potentially mitigated. Security teams are a great resource when you need to quickly understand what exists in an environment.

When to Consolidate or Diversify

One question that comes up often: Do we really need to consolidate everything? To which the less than helpful answer is it depends. The question of consolidation or diversification within technology stacks can, however, be answered with some additional follow up:

How much do the differing products overlap in their offering?

With two competing products, the simplest way to consolidate is by doing a side-by-side comparison. What are the benefits of each and how do they maximize value at your organization? At the same time, if you identify specific pieces of both products that are wholly unfulfilled by the other, then it may be an opportunity to maintain product diversity.

Can you secure more favorable terms by choosing one/maintaining both products?

Competition tends to drive more favorable terms if you know how to negotiate with multiple vendors. The size of your organization and what revenue you may generate for the vendors will act as leverage, as will product exclusivity and several other factors. If it won’t hurt a historically strong relationship, consider negotiating before consolidating.

How transferrable is the knowledge from one product to another?

Product offerings may be highly similar, but the syntax, configurations, and platforms may look completely different. This means it will take time and possibly training to integrate one group of employees into the chosen platform.

Does one product offer more security features than the other?

Security is top-of-mind for many organizations out there today and you must consider its impact when making technology decisions. If a vendor is unable to fulfill the security obligations necessary for your organization’s working model, consolidating to the vendor that can is a great way of mitigating risk and a lot of potential headaches down the road.

How well do both products integrate and connect to your other technologies?

Not all products are created equal. While the primary feature set may be similar between the two, always consider the bigger picture. How challenging will it be to pull metrics from each platform? Does this product have data other systems will want to leverage and does it support integrations with the other systems?

Does consolidation artificially restrict team independence?

Finally, consolidation is often about minimizing business complexity and maximizing value. If there is limited value to be gained from consolidation (upon due diligence), you must consider the people component. Teams may have a different working preference with overlapping products and allowing that choice that independence will you’re your employees engaged and happier as you continue integrating.

Integration Without Stagnation

Integrations are complex, challenging processes that require a focused effort from senior leaders to deliver the greatest outcomes and making decisions with incomplete information may hurt the value your acquisition generates. Understand what is in your environment so you can effectively navigate the decision points of when to consolidate, when to diversify, and how to empower employees with your newly integrated offering.