I Just Bought a Company - Now What?

6/29/2024 • Scott Love

We recently completed a technology audit of a company during the due-diligence stage of an acquisition. Documents were signed, congratulations were shared, and a sincere sense of optimism pervaded what looked like a great match. In a lot of ways, it was - but the Director of IT of the acquired company turned to one of us in a moment and said, “Now it’s going to get real.”

One of the more challenging aspects of merging two businesses is the integration of technology systems and IT teams. Allow us to share some perspective.

Knowing the Landscape

During the acquisition we completed three critical tasks:

1. Technology Audit: We reviewed hardware, software, data management systems, and security protocols in both organizations. We assessed not only IT-centric issues such as scalability, technical debt, and risk, but we also looked at team-centric concerns for adaptability, user experience, and existing frictions.

2. Team Assessment: We gauged the skills, strengths, and weaknesses of team members from, again, both companies. We reviewed leadership capabilities as well as identified natural catalyst contributors in teams. Know the people.

3. Data Valuation: In addition to a data audit, where we evaluated the quality, reliability, maintenance and structure of each company’s data, we supported efforts to objectively measure the value of the information in question. (One company had a poorly maintained CRM of 14,000 contacts; the other had more than 40,000+ contacts that were clean and current.)

Practical Tips for Merging IT Systems

The work above establishes a baseline of where tech sits today. The next step is naturally to work through the interweaving of internal systems - a significant change management and project management effort. While the following outline is cursory at best, it’s the path we follow in almost every case.

• Develop a Unified IT Roadmap

  • Create a detailed plan that clearly outlines the integration process, including key timelines and milestones.

  • Focus on business continuity first: integrate critical systems and services the business can operate through the transition.

• Standardize Systems and Processes

  • Identify and implement the best practices from both organizations. Document processes to address confusion or unspoken habits.

  • Transition to standardized platforms and tools to simplify operations and boost efficiency.

• Leverage Data Migration Tools

  • Use specialized software to facilitate smooth and accurate data migration.

  • Perform thorough testing before finalizing the migration to avoid data loss or corruption. Keep accessible backups.

• Implement a Phased Approach

  • Divide the integration process into manageable phases.

  • Continuously monitor progress and address issues in real-time.

Don’t Stop at a Merger’s End

While the immediate crunch of bringing two sets of systems and people together is very much a big deal and worth lots of good thinking - when things really do “get real”, - in our view this stage is not actually the most interesting or even most critical.

Consider: IT can often devolve into a reactive endeavor where the problem of the day becomes its sole focus. In many regards, the teams of merging companies simply want to survive the process. They want disruption to be managed and to return to equilibrium.

The tactical combining of technology in a merger is absolutely essential; and, additionally we believe that stopping at the water’s edge of commingling two current portfolios of technologies misses the big picture. Owners merge companies for lots of reasons (some simply want to retire) but often there’s a clear aspiration for a better combined organization. Sum of the parts needs to become greater than the whole.

We believe there’s a “stage three” beyond returning to equilibrium.

Implementing Vision

Following an acquisition, give thought to future process. How will a newly combined team take “v 1.0” of a newly combined IT landscape and work toward v2?

Tech and operations following a merger will be imperfect. Merging is often a triage process of juggling priorities, time and resources and you end up with, hopefully, a workable if incomplete and imperfect result.

Here’s our point: build an ongoing system of improvement following the merger that sets the new organization up for evolving success over time.

Tips for Fostering Ongoing Improvement

1. Stakeholder Engagement: Set regular communication with key stakeholders (if the practice wasn’t already in place). Make sure clear goals are defined and reported upon.

2. Tech “Steering Committee”: Establish a steering committee of IT team members, from both original teams, as well as representative users from both original companies. Reinforce culture and progress by having the committee identify future improvements and priorities from the user level (bottom-up).

3. Ongoing Process and Standards Documentation: Create an ongoing discipline for flowcharting processes, identifying roles, documenting standards, and capturing organizational knowledge that can then be both communicated and refined.

4. Ongoing KPIs: Measure the degree to which integrated systems position the company for scalability, reduce cost, reduce risk, improve user engagement, and meet company goals

5. Six-Month Audits: review your progress against the original baseline technology audit.

Fundamentally these practices are good habits for any organization, and if followed regularly, measurably improve the value of a business.

Need Assistance with Your New Acquisition?

At Blue Raven, we specialize in guiding businesses through technology transitions. Our expert consultants are here to ensure your IT systems and teams merge smoothly, minimizing disruption and maximizing efficiency.