Combine, migrate or separate? The right way to get probably the most out of an acquired firm’s know-how

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This text was written by Jeff Highley, Vice President of Resolution Engineering at Rackspace Know-how.

2021 has been a record-breaking year for mergers and acquisitions, with $2.4 trillion in deals on the books as of early June, however getting full worth out of an acquisition takes extra than simply inking a contract — it includes cautious desirous about obtain your strategic targets.

Amongst these concerns is creating an in depth plan for combine the acquired firm’s know-how, together with advertising/gross sales instruments, finance and billing programs, and third-party communication, and collaboration software program. For each piece of tech, you should determine between three programs of motion:

  1. Totally combine it into your individual stack.
  2. Sundown it and migrate its processes and information to a different platform.
  3. Let it run parallel to present programs.

To do it proper, you’ll want to contemplate each big-picture considerations and granular particulars. In the end the time funding is price it to make sure you’re getting full worth from the acquisition.

7 steps to tech integration

You’ll get the best results out of the integration process when you deal with it like a structured program, with clear milestones, timelines, and reporting. Many firms arrange an integration administration workplace (IMO) to handle the transition — from know-how to onboarding the acquired firm’s workers and clients into the brand new model.

Integration plan milestones and key decision-making needs to be recognized on the 30-, 60-, and 90-day marks, with outcomes monitored carefully for no less than 12 months after the acquisition. To make sure the tech aspect of integration proceeds as easily as potential, be certain the next steps are part of your course of.

  1. Outline your targets.
    Earlier than you determine what to do with the acquired firm’s know-how, you want an understanding of the final word function of the connection. If the acquisition is concentrated on absorbing expertise, it might not be essential to combine their know-how in any respect. But when your aim is to consolidate with a competitor and cross-sell, integration of their merchandise and infrastructure is likely to be key to success.
  2. Develop a transparent plan for every services or products.
    Decide which of the acquired firm’s services and products have the best worth to you, both as a result of they fill a spot in your individual portfolio or as a result of they provide excessive margins or robust income. Know-how associated to these services and products is price investing in for the long-term, whether or not meaning sustaining it in parallel along with your programs or integrating it along with your present infrastructure. In contrast, know-how associated to lower-value choices can doubtless be phased out, with information and processes migrated to your programs.
  3. Be prepared to vary.
    Don’t put the burden solely on the acquired firm to adapt to your processes and instruments. An acquisition is a chance to make each firms higher. Have a look at programs in foundational classes resembling gross sales and advertising, finance, and billing. Are there areas the place you’d welcome enchancment? The acquisition may very well be the catalyst to interrupt by way of inertia.
  4. Take a list of their know-how.
    Start with a discovery part the place the acquired firm teaches your group how they run their enterprise. Your aim needs to be to grasp their course of for producing income, from figuring out results in receiving fee on invoices, so that you don’t unintentionally disrupt it.
  5. Contemplate working helpful know-how in parallel.
    Generally there are good causes to not migrate programs. If the acquired firm has a robust model in an space the place the acquirer’s present choices are nonetheless rising, it would make sense to keep up that separate model and a few of its related gross sales and advertising infrastructure. By conserving the highest of the gross sales funnel separate, you would possibly be capable to seize extra income from clients in the long term.
  6. Determine deal with information.
    The acquired firm’s information will be one of the crucial precious beneficial properties from an acquisition — however it may be a problem to combine it in a approach that produces helpful analysis. If the acquired firm makes use of a special cloud supplier, you might must construct a multi-cloud technique to realize insights from merged datasets.
  7. Align contracts and licensing.
    After getting the bigger integration plan hammered out, it’s time to dive in on the small print. If your organization and the acquired firm license the identical software program, you’ll need to line up contract renewal dates, phrases and circumstances, and subscription plans. If the acquired firm is getting a greater deal, you might be able to discover extra financial savings.

Taking a long-term view

Don’t make the error of pondering that integration ends the day you welcome the acquired firm’s workers to your group. Integrating individuals, processes and know-how takes time — and a lot of thought. By laying the groundwork on the know-how aspect from the start you possibly can set the mixing up for fulfillment — and derive most worth out of your acquisition.

Jeff Highley is at present the Vice President of Resolution Engineering at Rackspace Know-how, main a group of technical pre-sales consultants within the Americas area.  Jeff has over 20 years of know-how management working throughout a number of industries and corporations.

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