Overview: Challenges Mergers & Acquisitions Face

Different from other technology deployments, implementations, and migrations, merger and acquisition (M&A) scenarios face particular challenges unique to both the M&A process and the organizations involved.  A proper design, along with coordinated execution, can allow businesses to minimize workforce disruption for both entities during the transition of IT assets, providing for a seamless migration experience for their employees.  Incorporating strategies to accommodate the key differences between M&A and more traditional IT projects can avoid costly delays and budget overruns.

Everything Must Go

Unlike other IT projects where only one, two, or even a small handful of technologies are impacted, all IT assets must be considered in a merger or acquisition scenario. At some point, the source entity will no longer be available, and all acquired resources, data, and processes must be transitioned before then.  As leaving behind or simply archiving in place to forget about it is no longer an option, building and maintaining a comprehensive inventory of acquired IT assets (including hardware, applications, identities, data, permissions, and relationships) is an essential first step in this process.  This allows every item to be tracked to its final disposition in the new environment, ensuring nothing is lost or mis-transitioned.  Items unaccounted for risk being lost during the transition.  When performing an inventory in preparation for merger or acquisition, keep in mind the following:

• All assets must be identified
• Technical debt is not an option
• If it does not have a home, it is lost

IT Culture Clash

During an M&A project, the acquired company usually does not move to a greenfield environment or a new version of the existing environment. The acquired company is moving into an already established and functioning IT ecology. Processes, frameworks, and services may not align between the two organizations cleanly. Different services will have distinct features and functionality available in the new environment.  The topology for collaboration, storage, and access management can vary widely between different organizational cultures.  Where and how IT assets interact with IT services must be realigned to maintain business process functionality during the changeover.

An M&A is not a simple lift & shift; a meshwork of transformation processes is required to handle the various scenarios encountered. By becoming aware of the similarities and differences between IT systems, processes, and culture, resources can be prioritized to those with the greatest delta between organizations. Ultimately, this allows for a more efficient use of migration resources and a more streamlined experience for the impacted workforce.  Items particularly impacted by organizational cultural differences are:

• IT systems and processes, and frameworks
• Permissions, memberships, access
• Collaboration and storage topology
• IT service and asset touchpoints

Legal and Regulatory Concerns

The legal and regulatory scrutiny of a merger or acquisition is much greater than almost any other project a business can engage in. In addition to the IT and business logistics that need to be navigated, the legal requirements between entities including arrangements such as data sharing, contract termination, and terminal services agreements must be adhered to. Retention polices, data residency requirements, and identity privacy protections may change or conflict between environments.

For most businesses, there will also be specific requirements applicable to their operating space that must be complied with. Industry bodies, governmental agencies, and international agreements impose their own timelines, constraints, and administrative oversight on the transition.  Failure to properly account for the interwoven obligations presented by outside agencies can inflict costly delays and penalties.  Keeping track of the varied requirements and timelines for each and ensuring there is a proper auditing and enforcement mechanism for ensuring execution occurs before the requisite deadlines allows for successful adherence to regulatory obligations.  Pay particular attention to:

• Retention agreements/requirements/conflicts
• International data residency and identity requirements
• Contractual TSA, service continuity, and legal constraints
• Final asset ownership disposition

If your organization is starting to consider or engaging in an M&A activity and would like assistance with developing your ITM and strategy, please reach out to one of our New Era representatives. To learn more about our services, visit our DCS Page or contact us today.