Originally a trained psychologist specialising in organisational change, Simon Ratcliffe also trained as an accountant and served as a CFO where he specialised in automating financial reporting systems. Simon has spent the last 20 years maximising the value of technology investments and creating the necessary organisational and cultural change. Now working as an independent Management and Technology Consultant, Simon works with organisations exploring how effective change yields maximum value from technology. Simon is also a recognised industry speaker, a published author and a leading member of a number of forums, writing and contributing regularly to both the IT and business press as both an author and commentator.
M&A is on the rise again as organisations strive to increase their market or connect into adjacent solutions and yet so many of these activities fail to deliver on their promise. Part of the reason for these issues is the lack of post-deal integration. Technology is an ideal mechanism for driving integration forward but is all too often the blocker in the process. If we rapidly connect systems and data, we will help drive a sense of integration among the users and the customers.
Many IT functions will complain that they are the last to know about an acquisition and so begin the integration journey on the back foot. This then results in slow integration of key systems and every day that passes without integration results in leaking value from the M&A exercise.
Simple changes will reinforce integration. Changing e-Mail addresses to the new organisation’s name, changing login details to reflect the new organisation. Too often these are disregarded as trivial and unimportant but have a key part to play in reinforcing the new identity. We do not delete the old organisation we simply need to wrap the new identity around that so that our history is not lost but our future is clear.
When we fail in this simple process, we often create a ‘them and us’ mentality and once begun it become corrosive.
We read and speak often of the value of data and many M&A activities are predicated on precisely that. If we are acquiring an organisation to open new markets for our products, not having immediate access to that data will dilute the value. Every day that passes where we cannot market to the new clients, we are losing opportunity and potentially creating uncertainty in the customer base.
Too often tech functions will say that it will takes weeks or months to integrate the data of two organisations but this need not be true. Having a strategy to allow immediate secure data sharing can be achieved quickly, even if the systems are very different. Waiting for the perfect integration simply delays the art of the possible.
Achieving this agility requires that a tech function is ready and has an executable plan from Day 1. Realistically it should be possible to enable technology integration within days of an acquisition if the right people, processes and tools are in place.
The other key element is engaging the tech function during the acquisition process. When the target company is a tech centric then Tech Due Diligence is often undertaken but in many other sectors it is far less common with a common complaint for the tech function that they were the last to know. That needs to change. Bring in the tech team as soon as possible and have them ready for when the acquisition happens.
However, the Tech Team needs to understand what due diligence means. Yes, it is an audit of the target systems, but this should be done in the context of how a merger can be effected. Simply having a list of what the target has is only a small part of the process. Understanding their strengths and weaknesses and mapping these to your own is crucial. Understanding why the systems they have were chosen helps understand the culture and attitude of the target and that will inform how you go about the initial engagements.
In engaging the tech team as early as possible, the chances of an acquisition being more successful are significantly raised as data can be shared, identities merged and an overall feeling of belonging can be achieved that, in many ways, is far stronger than any events or presentations. When you get an e-Mail address in the new name you will feel like you belong. When you can see the other customer list you will feel like you belong. When you have access to new products to sell to your existing customers you will feel like you belong.
Never underestimate the power of belonging and tech is a powerful tool for achieving this.
A large part of the responsibility belongs to the Senior Management Team to engage the tech team early. But the Tech Team also has responsibilities, and a key one is to stop assuming that it is their systems that will prevail going forward. Oftentimes acquired companies may have more advanced or effective systems and one of the benefits of M&A is being open to changing the current work practices in the acquiring business if new and better systems and processes are available.
This assessment may take time and may be influenced by other non-technical decisions, but that should not stop the initial activity. Whether or not one Operational CM system is better than another may require lengthy debate but creating an environment where the data from both can be seen by all requires no debate. It requires a rigorous technology approach.
With technology dominating so much of what we do, merging an acquired business has the potential to be a long drawn out and complex process. But it need not be. Create a playbook at the outset and prioritise the tasks. Unifying identity and sharing critical data are absolutely key and should be achieved in days, not weeks and months.
Successful M&A requires speed and agility and a fundamental understanding that the ultimate goal of complete integration will begin with a rapid burst of known activity to draw the organisations together followed by a longer process of working out how to pull everything together seamlessly.
Of course, this all refers to the technology alone. Future articles will explore what happens when two tech teams come together and how to best navigate what can be a testing time for everybody.