Overcoming IT Complexity During Mergers and Acquisitions

When two people get married and buy a house, they have to figure out which furniture to move in, what items to keep, what things to get rid of, and what needs upgrading. They may need to do whole replacements, some light remodeling or move a wall.

Mergers and acquisitions work like that but are significantly more complicated. When you’re marrying two organizations or folding another one into your business, figuring out what IT assets to keep and how to manage them can be complex.

The 2023 M&A Trends Survey by Deloitte shows just how important it is to handle mergers and acquisitions properly, especially when it comes to merging technology and cultures. 90% of corporations and 93% of private equity firms believe outcomes are highly dependent on effective transformation planning and execution.

Partnering with a managed service provider (MSP) can make for a much smoother M&A transition and significantly reduce your risk.

Challenges of IT during M&A

Combining or separating networks, systems, data centers and applications across two previously distinct companies is an enormous IT undertaking. Without careful planning and execution, it can cause major headaches during the pre-and post-merger phases, especially if you’re dealing with a mix of public, private, or hybrid clouds, multiple cloud service providers, or on-premises resources.

Major challenges include:

· Integration of business systems, accounting systems, CRMs, ERPs and other platforms.

· Managing single-tenant and multi-tenant mail or Microsoft 365 accounts.

· Blending network infrastructure and data centers.

· Managing cybersecurity across systems, including access control, authentication and administration.

· Combining data and databases without loss of data.

· Optimizing license management, subscriptions and cloud resources.

· Maintaining business continuity during technology transitions.

These are just a few of the headaches of mergers, acquisitions or divestitures.

50% to 90% of M&A deals fail to achieve the expected value. An analysis by business consulting firm Bain & Company reveals a lack of value creation that benefits both parties and failure to establish clear strategy and objectives are reasons M&A activities fall short.

Bringing in a third party early in the M&A due diligence process can provide significant dividends and help you avoid making costly mistakes. MSPs are uniquely positioned to help you manage the complexity of merging hardware, software, and IT resources with objectivity for a smooth transition.

How a Managed Service Provider can help with mergers and acquisitions

The best MSPs have the experience and resources to find the best-fit solutions for your organization and deploy best practices.

Integrating IT systems requires significant planning before, during and after M&A activity takes place.

Pre-Merger

MSPs can provide pre-merge planning to help you determine the best path forward, including:

· Mapping technology portfolios: Mapping all systems, infrastructure, contracts, resources and staffing.

· Finding best-fit solutions: Uncovering duplication or services and finding best-fit solutions for a combined company that are cost-efficient.

· Assessing risks: Evaluating the risks of IT investments in line with security and compliance needs.

· Providing a technology roadmap: Developing an action plan for transition, including integration priorities, timelines and budgets.

During Mergers

With the planning stage complete, MSPs can help with procurement of equipment, negotiating vendor contracts, and handling installation and integration. Typically, projects include:

· Combining networks and data centers: Architecting connections and reconfiguring resources, while handling data migration and integration.

· Migrating and consolidating systems: Transitioning systems, decommissioning unneeded equipment or applications and managing integration.

· Providing hands-on support: Augmenting IT staff needs and filling gaps in resource capacity or expertise.

· Outsourcing management: Providing managed IT, managed cloud, and managed security services.

Many organizations going through a merger or acquisition find that outsourcing part or all of their IT management produces significant cost savings and helps merge cultures more successfully.

With IT talent increasingly difficult to hire and retain, working with an MSP to augment your staff can help you fill in knowledge gaps and ensure systems and networks work efficiently. The Manpower 2023 report notes that the global talent shortage is at a 17-year high. Despite layoffs in the tech industry, there are hundreds of thousands of IT jobs that are unfilled.

Post-Merger

Even after the merger is complete and the initial integration priorities are completed, there is still work to do.

MSPs can help by:

· Updating policies and processes: Helping establish the right policies, controls and tools to manage the new risk environments.

· Managing IT roadmaps: Ensuring IT planning accounts for future spending and evolving as business needs change.

· Providing ongoing support: From training to cloud, security and IT management.

· Managing new technology rollouts: Deployment and integration of new hardware, software or cloud resources.

Finding an MSP with mergers, acquisition, and divestiture experience

That couple moving into a house can likely manage the process on their own, but integrating already complex IT systems and resources during a merger or acquisition is not so easy. With all of the financial details involved in making a deal work, it helps to get outside help from experienced and proven experts.

Sagiss has the MSP experience you need to help manage your transition smoothly. Whether you are acquiring other businesses, divesting business from large organizations, or are part of a private equity portfolio looking to grow, we’re here to help.

Contact Sagiss today and let’s discuss your IT management needs.