How an integration platform can benefit post-merger processes
Many, if not most, of mergers & acquisitions (M&A) integrations fail to meet their initial objectives. To help enhance the success of investments, companies can turn to integration platforms that help streamline post-merger processes, writes Mike Kiersey, Head of Sales Engineering EMEA at Boomi.
In 2021, the number of announced deals exceeded 62,000 globally, and current indications are all pointing to another supercharged year. Companies are using M&As to gain the advantages of size and scale towards effective economic recovery. These deals will continue to play a pivotal role for companies navigating technological disruption and stakeholder pressure to unlock further value.
Although critical in enabling high-velocity and high-growth business plans, M&As come with multiple challenges.
Major M&A roadblocks
Today, organisations of all sizes and across all industries rely on myriad digital technologies and processes. In fact, the average organisation uses more than 100 software as a service (SaaS) applications. While these technologies and applications deliver business benefits, they can also make an organisation vulnerable to consequences of poor technology integration during M&As.
Studies show that between 70 and 90 per cent of mergers and acquisitions fail, often pointing to post-deal integration as one of the defining roadblocks.
Disparities between companies’ technology stacks mean data-related processes may be inconsistent, regardless of on-premise or cloud data storage practices. Disparate data formats and sources, low-quality data, and data silos all significantly impact the time and cost associated with technology integration and the merger as a whole.
For a start, many organisations are still functioning on outdated, legacy technologies. These systems must be dealt with from the very beginning of the M&A process, if incompatible with supporting a growing enterprise. If organisations do not modernise data processing on both sides of the deal, key systems in the acquisition process such as enterprise resource planning (ERP) – already notorious for migration challenges – will be negatively impacted.
Improper planning related to these data integrations will lead to significant project run-off costs, eating away at desired post-acquisition profitability.
Driving ahead with data
A clear post-merger integration plan is vital for maintaining business-critical applications, IT systems, and data. At the crux of M&A success lies a strategy that makes data accessible and provides the correct governance. Both companies involved need to understand the importance of harmonised data management, and the severe implications of a failure to integrate two different IT systems.
Strategic integration of on-premises, cloud applications, and other various data sources enables organisations to overcome IT complexity and break down obstructive data silos. Both parties need the ability to access raw data from a single platform, from which the company can decide which innovation approach to take for all stakeholders moving forward.
By using data and application integration platforms, organisations can connect everything within the M&A digital ecosystem, including applications and data across hybrid IT, with speed and ease to minimise disruption and reduce risks, and therefore costs.
A master data management (MDM) hub can ensure uniformity across company data. Using this within a central hub enables organisations to break down silos, expand trusted data throughout the newly merged enterprise and gain 360-degree visibility across products, employees, and customers.
With correct data amalgamation and management, all of an organisation’s data sources, storage, business applications, visualisation, and other methods of analysis can be accessible and easily usable for stakeholders. In turn, this will enable an almost immediate return on investment for post-merger profitability.
Further reading: IT deserves a strategic role in merger & acquisition integration.
Speed is of the essence
Business leaders know that the old adage still stands: time is money. During a merger, companies are racing against a ticking time bomb to achieve profitability and not lose key stakeholders’ faith. Using integration platforms, businesses can not only overcome the data-connectivity hurdle but also merge at speed to prevent competitors from gaining ground.
Successful M&As are possible at speed and with lower risk when they deploy the right integration technologies to streamline the connection of people, data, applications, and things. In this way, they can quickly experience the value of a new acquisition or merger.
With faster integration protocols, professionals are equipped with updated information across their organisation. Employees are empowered to make faster and more intelligent decisions, executing the required strategic and operational decisions during and after, to lower risks and costs. And with accelerated integration and decision-making, the merged company can get back to business at a higher velocity to drive further growth.
Improving the M&A experience
Achieving seamless unification in any M&A is no easy task, and is heavily dependent on the technology involved. Before the process even starts, the compatibility and digital strength of individual IT platforms must be ruthlessly assessed to ensure the most effective post-deal integration.
With a strategic technology integration plan, organisations can speed their mergers and acquisitions and gain the accelerated agility they need for their high-velocity, high-growth business plan pursuits. Using an innovative integration platform will shore up their profitability, and help them capture deal values at full tilt.
