Mergers & Acquisitions in IT Operations Management: A Strategic Approach

Mergers, and acquisitions (M&A) are often a strategy for growth. This approach enables organisations to capture new markets, geographic territories, and enhance their existing product offerings - while simultaneously growing the top line.  

This dynamic growth introduces a quicker pace of change than many businesses are accustomed to, necessitating a robust IT integration strategy to ensure operational efficiency and long-term success. Failure to consolidate your IT estate can lead to fragmented systems and a fragmented business, undermining the original objectives. 

 The Importance of a Strong Foundation 

Quick and successful post-acquisition IT integration is crucial for realising the business benefits of the deal. If the acquired entities are not swiftly integrated, then the business is at risk of uncontrolled IT, growing IT costs, lack of data management and escalating cyber security risks.  

Basic M&A activity in three phases:  

• Acquire. 

• Integrate effectively. 

• Move forward without the need to backtrack and fix issues later. 

This is a very high-level view however, good analysis during the Acquire phase will help with the “deal” and accelerate the following phases. Wherever you may be on your M&A journey, there are key foundations to consider when integrating two or more businesses and their IT functions.  

Key Foundations for Successful Integration 

1. Setting up for success 

What is required:  Establish a standardised framework 

Refractis has found that having a holistic and strategic approach by creating a standardised framework provides a layer of clarity over what may be a complex set of activities. 

This approach helps the business to shape and adapt an approach to make best use of the time, resources, and opportunities available. Creating a consistent set of integration patterns based on the size, complexity, geography, and risk profile of the acquired entity helps to drive the planning, prioritisation, and budgeting for the integrations.  

2. Strong delivery skills 

What is required: Utilise project management and technical skills 

Time and again, we have found integrating disparate IT functions is hard work and requires strong project management and technical capabilities. Effective delivery ensures that the integration process is streamlined, milestones are met, and risks are managed. 

When integrating unrelated IT domains, technical expertise is crucial for addressing the individual complex IT requirements that often accompany mergers. This drives seamless integration of the core IT systems - such as identity and security - and the ongoing operational functions.3. Buy-in and communication with the acquisitions 

4. Buy-in and communication with the acquisitions 

What is required: Clearly defined target state and effective communication 

Achieving management buy-in on the end-state vision and maintaining clear communications with the acquired entity is essential. Understanding both acquirer’s and acquiree’s requirements and priorities early in the process helps avoid last-minute surprises. Underpinning this is the need for an effective discovery process which is critical to getting the integration right first time and avoiding any regret-spend. 

4. Clear service transition 

What is required: Seamless handover to operations 

Defining a clear service transition approach and framework is important to ensuring that once the integration team steps back, the ongoing business-as-usual operations are well-understood and are efficiently managed. This ensures that users experience minimal disruption, and that the quality-of-service delivered to internal and external customers remains high. 

5. A standardised support model 

What is required:  A Support model that is standardised and scalable 

Implementing a standardised support model across regions and acquired entities simplifies integration. Clearly defined support structures and processes are vital and should be consistently implemented and communicated across the organisation. 

Implementing common tooling like ServiceNow can be instrumental in managing day-to-day operations, providing a unified platform for support across different regions and entities. This needs to be backed up by a well-defined support operating model and RACI (Responsible, Accountable, Consulted, Informed) matrix which can ensure that the delegation of responsibility is clear - minimising duplication. 

However, growth through acquisition also presents opportunity for operational consolidation. There are options which should be considered, for example, whether to leverage a single global operations team, or whether it makes more sense to split the support organisations into geographical constructs. Careful thought and modelling can help drive a solution which is both cost efficient and meets current and future business needs. Factors such as language, time zone, data residency and supplier footprint are key inputs into this decision. 

Reflections

For businesses growing through M&A, a strong and strategic approach to integration is essential. By focusing on key pillars such as standardised frameworks, technical project management, clear communication, and defined support structures, businesses can ensure successful and seamless integrations with on consolidation and standardisation at the core and safely handing over to a prepared BAU operation