According to Harvard Business Review research, 70 to 90 percent of merger and acquisition initiatives fail. One of the causes is a failure to develop a good IT integration plan for mergers and acquisitions, which is a critical step for any company to ensure a smooth transition. Planning ahead of time for IT integration reduces the risk of downtime and disruption to business activities, guarantees data integrity throughout the process, and provides for a more seamless transition. Unfortunately, many businesses do not plan appropriately.
Due diligence and preparatory stages prior to a merger or acquisition
Before you begin an M&A, there are a few procedures you should take to ensure that you get started on the right foot. The following are some of the phases you should follow to get your merger and acquisition off on the right foot. Gather as much information as possible.
It’s time to explore behind the hood of technology. This may entail gathering data about apps, infrastructure, suppliers, and IT operations, among other things. Exploring a technical due diligence process is vital for both the seller and the buyer, as it allows them to detect difficulties that may influence the purchase.
Investigate the problem
In terms of technology, where do you stand? At this point, you should make a list of your present resources and systems. What more has to happen in order for this integration to be successful? You don’t need a thorough integration strategy; all you need is a fundamental understanding of the following stages. Consider whether any adjustments to your systems are required to get them ready. Consider whether you’ll require any more resources to complete your M & A move successfully. Consider whether you have adequate internal resources or whether you need to enlist the assistance of an outsourcing company.
Be open and honest
By being open about the present risks, circumstances, and anticipated issues, your team and others engaged in your M & A will be better able to solve them. An M&A might be jeopardized before it even gets off the ground if there is hidden or undeclared information.
Consider the dangers
Risks are an inevitable component of every business process; by anticipating them, you will be better prepared to address issues before they arise. One of the most important aspects of effective M&A integrated solutions is an open and transparent risk assessment. However, many firms fail to appropriately handle these risks, resulting in unforeseen difficulties. This can be caused by anything from mismatched software to PC/Mac problems, tech debt, or even human issues.
Take inventory of your possessions
Knowing your assets, from human resources to funds to expertise, can help you map out your integration plan and identify any areas of weakness that may require external assistance. For example, you may find that throughout the integration process, a system that is critical to the integration was skipped at the inventory step. This might delay the entire process or possibly affect the integration’s course. Taking inventory and accounting for assets ahead of time puts you in the best position to get started while reducing risk.
While you may have described them at an earlier stage, it’s critical that your M&A’s duties and responsibilities are well defined. Any M&A is a moment of transition, and your team is no exception.