Our last two pieces have focussed on the pre-deal importance of technology considerations, and in this third article we turn our attention to what happens next. The deal is done, the dotted lines are signed – so how do you mobilise and get the technology work done that will help integrate a newly acquired business?
1. Manage issues identified in due diligence.
The priority will be to keep the critical business functions operating. Those areas identified as being unable to fail must be carefully managed. This may mean building a team to cover technology which has been adopted from a former parent who previously managed it. It may mean upgrading, migrating or replacing existing infrastructure or systems; and it may mean re-engineering processes to operate effectively without technology that was previously available. Some things are certain; strong leadership, willingness to change, and adaptability to cope with ambiguity will be critical to success.
2. Manage issues the due diligence process may have missed.
There will always be areas which either were not examined at all or in insufficient detail during the due diligence process. These areas will, typically, be more minor in importance; but that doesn’t mean they can be ignored. During the early integration period, take the opportunity to look again, in detail, at the entirety of the technology estate. Where unknowns or uncertainties are found, establish mitigations for the risks they present, and work methodically and logically through until all risks are covered. Focus not on the fact that things were missed – rarely will they be significant enough to put the business at risk. Instead, focus on addressing them and taking the opportunity to make changes to operations where it exists. You may be surprised how many technologies and systems are in place unnecessarily.
3. Manage the Transitional Services Agreement (TSA) and third parties.
It is not uncommon for a TSA or similar arrangement to be in place post-deal. The TSA will be time-limited and your goal should be to minimise reliance on third parties or a previous parent and be able to terminate the agreement on a timely basis. However, corners cannot be cut – and the importance of the TSA should not be underestimated. During the period of the agreement, exceptional stakeholder management, contract management and negotiation skills will be hugely valuable. Make sure your team are capable, supported and empowered to have difficult conversations with third parties. A TSA is, after all, mutually agreed – both parties have to co-operate in order to ensure a smooth integration and transition process. Having a lead contact person in each organisation can help; so can having a scheduled weekly catch-up call. Where possible, deal with issues before they become problems.
4. Manage other systems and technologies outside the core.
We often refer to these other systems as ‘the 76’ – a throwback to a complex transition we undertook on behalf of a client in which 76 additional systems were identified besides the main line-of-business systems. For Waterstons, it’s become an indicator and reminder that there may be large numbers of other systems in use which each play a part in the business operations. It may be small or it may be significant – but each of the ‘fringe’ systems in place will need a plan to mitigate risk, migrate, replace, retire or consolidate. It may well be a full time programme management job in itself – interim or internal resource will be needed. Using the information from due diligence and the post-deal review of technology, look for opportunities to simplify and re-engineer the processes supported, and to reduce the complexity of the estate. The 76 reduced to around 25!
5. Look after the people and they’ll look after you.
We have previously discussed the balance between hiring interims and looking for internal stars – putting the right team in place helps deliver results. Having good people, though, means nothing without clarity around responsibility, accountability, and capability. Ensure everyone, whether internal, interim, or third party; vendor, consultant or staff, has a defined role and is clear on who is responsible for what. It will make everyone’s lives easier, the working environment less pressured, and the transition smoother. Make sure third parties are managed, with clear lines of communication and escalation. Ensure progress on transitional issues is documented and communicated to all involved and the wider business. Give people responsibility and the right level of freedom to make decisions, push the business, and drive change.
To read the other articles in the series, follow the links below:
Article 1 - Why do I need to be bothered about technology in my deal?
Article 2 - IT in Mergers and Acquisitions – what should you concentrate on?
Article 4 - Tips for successful Business As Usual