There were more than 50,000 mergers and acquisition deals worldwide in 2022. While some will go smoothly and create highly-profitable companies, history tells us that between 70% and 90% of M&A deals fail over time.

Blending and integrating systems and cultures is not easy or simple.

Setting the Stage for IT Consolidation Post Merger

The key to any M&A strategy is planning. Often, the benefits of mergers and acquisitions lie in the synergies created.

Without a clear road map, these synergies may never be realized.

Understanding the Challenges of Post-Merger IT Consolidation

Deals can quickly get sidetracked when navigating complex infrastructure and inherent challenges in integrating multiple systems. Common challenges include:

  • Integrating disparate systems using different hardware, software, and platforms
  • Migrating and consolidating data while maintaining operations and data integrity
  • Removing redundancies without impacting workflow
  • Managing regulatory compliance across the new environment

Following best practices for M&A IT consolidation post-merger can help you mitigate these challenges and streamline integration.

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6 Best Practices for Post-Merger IT Consolidation

Early Planning and Due Diligence

The earlier — and more detailed — your due diligence, the more effective your consolidation will be. Rarely does pre-M&A due diligence uncover the nuance of IT infrastructure to fully detail the scope of work that has to be done.

Developing the game plan will include:

  • Documentation of core systems and applications
  • Evaluating key infrastructure assets
  • Reviewing utilization, resources, and capacity
  • Assessing contractual obligations
  • Identifying redundancies and compatibilities

Developing a plan requires a holistic view for a successful technology transition.

Effective Communication and Collaboration

Communication and collaboration are key to a successful transition.

Post-merger planning should detail objectives, timelines, responsibilities, and risks to keep everyone informed and on track. You’ll need cooperation across the organization, even during stressful times when team members may be worried about their job security. How your combined team will collaborate post-merger will depend, in large part, on how effectively you communicate your plan. 

Getting buy-in from leadership is a good start, but keeping frontline workers and key team members in the loop will help foster a more inclusive culture.

Prioritizing Systems and Applications

You will need a structured approach to evaluating systems and applications for migration and integration. A business impact analysis can help identify how the actions you take will affect operational and financial performance, helping you prioritize your approach.

The timing and duration of any disruption will impact operations, so you want to make sure you limit both while creating the IT infrastructure you need for the future. By focusing first on the mission-critical elements, you can prioritize the systems that have the highest potential impact from downtime and develop sequencing for consolidation based on priority levels.

Data Migration and Integration

Best practices for data migration and integration include a structured approach to unifying databases and data sets. Strong data governance, such as naming conventions, metadata, access controls, and security will underpin your integration.

It’s also a good time to review data to ensure it has been validated and cleansed to maintain data integrity and is consistent in the consolidated environment. Data integrity and security are crucial, and it’s easy for both to lapse without careful planning and execution.

Infrastructure Rationalization

Infrastructure rationalization takes an objective look at the current environment to eliminate redundant resources and rightsizing capacity.

Standardizing platforms, technology, and vendors simplifies management. This is a key step to uncover synergies and ways to reduce costs while maintaining or improving operations. While you need to future-proof your IT environment, you also need to focus on eliminating duplication and streamline a combined workflow.

There’s a direct correlation between the cost of post-merger IT consolidation and the degree of change that’s needed. Companies should carefully analyze every decision with a view toward the financial and operational impact.

Risk Management and Compliance

Integration introduces additional risk. System downtime, data loss, regulatory non-compliance, and lapsed security can all occur with proactive planning and implementation. Best practices include defining risk mitigation strategies for high-priority risks and ensuring redundancy and effective controls to ensure compliance.

The implementation plan needs to account for risk at each phase, performing risk assessments to identify vulnerabilities and create mitigation strategies.

Un-complicating Post-Merger IT Consolidation

IT consolidation is crucial when leveraging assets in a merger or acquisition. You need a rapid integration to enable employees to continue to work at peak efficiency and you simply cannot afford to make mistakes.

Following these best practices can help.

Working with an experienced partner with significant M&A expertise can significantly accelerate the process and ensure a seamless transition. Yorktel is a trusted partner in post-merger IT consolidation, leveraging the power of Azure Virtual Desktop for Merger & Acquisitions to streamline legacy system integration and consolidate IT environments for a smoother transition.

Contact the M&A merger IT solutions experts at Yorktel today to discuss your IT consolidation strategy.