Mergers and acquisitions: Bringing together separate IT departments

Bringing together the assets of two separate companies can be a fraught business, particularly when it comes to merging IT departments

Companies being bought and sold is a normal part of business life, but merging two separate corporate entities can be a big, complex and risky technical challenge that needs to be handled with care.

Aligning the IT of two separate organisations needs to start by addressing two distinct areas: future infrastructure planning and utilisation, and the management of legacy infrastructure and applications.

Both components present opportunities and risk, and one only needs to look at the recent TSB migration, and the downtime that resulted from it, to realise that – even with extensive planning – things can still go awry.

Try not to rush

There is more than technology to discuss where mergers and acquisitions are concerned. There are two workforces (perhaps with different ways of working) that need to be integrated, processes that need to be adopted and made to work.

It doesn’t happen overnight and there should be restraint shown where there is pressure to “streamline” or “reduce costs” by merging the IT environments quickly.

Trying to do that while onboarding occurs is without a doubt going to derail the process and cause stress and downtime.

Poor planning and integration can also play havoc with service level agreements and other critical agreements. It is not a situation anyone would want to be in.

Safeguarding IT knowledge transfers

During most company mergers, the purchaser will acquire the IT personnel of the company it has acquired, and this – unfortunately – tends to trigger an exodus of some very knowledgeable and experienced members of the IT department.

For this reason, it is essential to ensure all the technological documentation is available and up to date to ensure the transfer of knowledge about the systems it operates remains sorted and safe.

Allocating named, trusted individuals is often a very good call, and the importance of this cannot be overestimated.

In all but the smallest companies the infrastructure belonging to the merged entities will stay side-by-side for months, if not years.

It is not a technology issue, but an issue of management, security, planning and risk management. As previously mentioned, rushing in will cost more than just money.

Preparation is key

One item that is often overlooked until required is access to technical and financial reporting in both environments, but how this is achieved can vary from company-to-company and acquisition-to-acquisition. Being able to access it, though, is critically important as it will be called upon to help shape the future of the combined companies.

With any purchase comes risk, and acquiring a company is no different. The IT might be in great shape or falling apart at the seams, and each application and service will comes with a risk profile.

Make sure, therefore, the people who are looking after the infrastructure understand the services that are considered high-risk and business-critical, and put in place mitigation strategies to protect against outages. Because the last thing anyone needs going through an M&A is some legacy infrastructure failing for want of a small investment as the migration process kicks into gear.

To merge or not to merge?

When two companies merge, the security model and business process of both is different. Whilst both companies may be on the same cloud or isolated on-premise systems, the internal security processes and compliance could be vastly different. Compliance also means certain parts of a company may need to be isolated from others for fear of conflicts of interest occurring.

For that reason, it may not always be desirable to merge IT environments as the acquisition progresses. It all depends on the individual circumstances.

Keeping the two IT environments separate is a well-worn path that many companies follow, and it works, because maintaining it is easier than trying to mash the two together.

When purchasing companies, there are frequently third parties involved who need to be onboarded/consulted on the acquisition. Having the support of such third-party providers can be valuable with regards to migration and support going forward, so it pays to brief them well in advance.

Read more about mergers and acquisitions

Once the processes for requesting and building new infrastructure (and the security requirements around it) have been proven, the best way forward is to start building new infrastructure and services.

The approach many organisations typically favour is to run down one of the environments in favour of a shared IT infrastructure. Migrations can be undertaken with caution but moving the environment in their totality may take several years.

It is important to remember every merger is different and the pointers above are just a few of the many items that have to be taken into account when looking to merge the IT part of the equation. Take the long-term, cautious view. There will be a whole raft of issues that surface once the migration process is started.

This was last published in May 2018

Read more on Software-as-a-Service (SaaS)

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