Good preparation pays off in acquisitions – 5 ways to succeed in integration
A majority of mergers and acquisitions fail, and they don’t reach their goals. More often than not, the challenges lie in integrating the merging companies, especially when it comes to technology and culture. That’s why they deserve special attention and it’s also why preparation should start early.
Too often in planning a merger or an acquisition, too little weight is given to technology and culture, and the challenge of combining them. This almost inevitably leads to problems. In over half of the cases, it is the technology integration that fails, and cultural integration fares only slightly better.
The price for this can be high: time is wasted, IT systems don’t work together, and companies need to rely on costly, long-term transitional service agreements. Sometimes integration issues even prevent future deals and slow down growth.
What happens after the deal?
A merger or acquisition is almost always preceded by a thorough due diligence process. Markets and target companies are examined in detail, sometimes this even includes technology, but this doesn’t solve the integration challenges that follow.
Due diligence supports the decision to buy. But what happens afterwards is often overlooked. If the target is assessed in isolation, without comparing it to the acquiring company, the understanding of their compatibility remains superficial.
This changes when we focus on integration, particularly in terms of technology and culture. Identifying the key differences, we get clearer view on the likely challenges ahead. Overcoming these challenges requires careful, early planning.
Five ways for a successful integration
- Build readiness
Knowing your own organisation is the foundation for successful integration. Analyse your structure and culture, processes and operating models, and technology. Create a comprehensive, measurable model to apply to different M&A scenarios.
- Compare the target to yourself
Use the model you build to identify key differences and assess their impact on integration and future business. This is also the time to build an initial integration plan. - Plan the integration project early
Planning usually starts once the deal is confirmed. This is a sure way to lose valuable time. Planning the integration in detail should start immediately after the decision to buy has been made. - Act fast from day one
Delays in planning delay execution: instead of starting to work, time is spent searching for resources. Do the groundwork early so you can begin implementation in sprints from day one. You must also stick to the plan you have made, focus on what matters most and leave the rest for later. - Steer change after integration to gain benefits
Once the integration project ends, business takes the lead. This is when you need to prove the deal delivers results. Even a successful integration is just the beginning, only ongoing business development will bring the full benefits.
Interested? Download our guide for more detailed tips on successful integration. https://www.sofigate.com/materials/a-guide-to-running-a-successful-ma-integration/
About the author
Juho Nevalainen is the Executive CTO of Sofigate’s BT Integrator business, which provides end-to-end digital services, especially for growth companies. The integrated services include engineering services, management services, basic IT services and vendor network management services. Juho has long experience in IT management and business development consulting, concept development and commercialisation, and the use of artificial intelligence in business planning.
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