researchHQ’s Key Takeaways:
- Modern Identity and Access Management (IAM) solutions allow quick, secure access to employees during and after the M&A process.
- A holistic, planned approach to integration can improve adaptability and offer financial savings.
- Centralised identity management allows companies to consolidate their directories with ease.
- In order to avoid further down the line, security must be maintained as a key priority for organisations during the M&A process.
In recent years, mergers and acquisitions have seen a record number of transactions and continue to draw staggering figures. According to a recent IMAA report, 2018 saw about 49,000 global M&As with a combined enterprise value of $3.8 trillion. This year is projected to have similar or greater numbers.
As CEO of a technology company that has experienced multiple acquisitions and someone who has worked for multiple large corporations as they went through M&A integration, I not only have firsthand M&A experience but also expertise from an IT integration perspective. M&As are incredibly complex and present numerous challenges that can derail post-merger integration success. Financial and employee records, security protocols, management solutions and compliance obligations must seamlessly integrate for the sake of the customer and shareholder satisfaction and profitability. In my experience, the key to integration success is taking as much complexity out of the process as possible.
In fact, 63% of companies go beyond spreadsheets and use technology tools that help reduce integration conflicts, costs and time. I’ve seen firsthand how Identity and Access Management (IAM) solutions help organizations with IT integration and centralizing identity management following an M&A and have identified the top four integration challenges and recommended best practices:
1. Expediting Onboarding And Access
When an M&A transaction is completed, the newly merged company must ensure employees have access to the applications and software specific to their roles. However, managing hundreds or even thousands of new employee user identities creates time-consuming hurdles for IT staff. The longer onboarding takes, the higher the chance of downtime and quality of service impacts. Delayed access to critical systems can increase employee frustration and decrease customer satisfaction, leading to higher churn on both accounts.
Modern IAM solutions can connect to the directory of an acquired company, enabling day-one access for both the parent or acquired company’s systems and applications. IAM enables fully automated account creation and management through workflow-driven user provisioning and multi-directory identity and resource administration.
2. Integrating Systems And Technologies
A merger brings together two distinct technology stacks — including software, hardware, network systems and applications — which may have inconsistent customer-facing technologies. When properly executed, IT integration can deliver an additional 10-15% in cost savings through resource consolidation and the elimination of redundancies. Companies must gain control of data assets as quickly as possible to mesh efficiently.
Two major areas tech leaders should consider to fast-track M&A success are operational integration — including finance, HR, administration and logistics — and technical integration. It’s important to take a distinctive approach to these integrations while completing them in a parallel fashion. If you wait to complete operational integration before technical, you could be a year into the acquisition before the two companies’ technologies integrate. Furthermore, if your goal is to use the acquired company’s systems, ensure you have a holistic, comprehensive plan that is frequently communicated to user communities, rather than integrating one system at a time.