Combine, migrate or separate? Learn how to get essentially the most out of an acquired firm’s know-how

This text was written by Jeff Highley, Vice President of Answer Engineering at Rackspace Expertise.

2021 has been a record-breaking 12 months for mergers and acquisitions, with $2.4 trillion in offers on the books as of early June, however getting full worth out of an acquisition takes extra than simply inking a contract — it entails cautious excited about the way to obtain your strategic targets.

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

1. Absolutely combine it into your individual stack.
2. Sundown it and migrate its processes and knowledge to a different platform.
3. Let it run parallel to present techniques.

To do it proper, you’ll want to contemplate each big-picture issues and granular particulars. Finally 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 very best outcomes out of the mixing course of should you deal with it like a structured program, with clear milestones, timelines, and reporting. Many corporations 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 must be recognized on the 30-, 60-, and 90-day marks, with outcomes monitored carefully for at the least 12 months after the acquisition. To make sure the tech aspect of integration proceeds as easily as potential, be sure that the next steps are part of your course of.

1. Outline your targets.
   Earlier than you resolve what to do with the acquired firm’s know-how, you want an understanding of the final word objective of the connection. If the acquisition is targeted on absorbing expertise, it might not be essential to combine their know-how in any respect. But when your purpose 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 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 sturdy income. Expertise associated to these services is price investing in for the long-term, whether or not which means sustaining it in parallel together with your techniques or integrating it together with your present infrastructure. Against this, know-how associated to lower-value choices can probably be phased out, with knowledge and processes migrated to your techniques.
3. Be prepared to alter.
   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 corporations higher. Take a look at techniques in foundational classes akin to 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 inertia.
4. Take a listing of their know-how.
   Start with a discovery section the place the acquired firm teaches your crew how they run their enterprise. Your purpose must be to grasp their course of for producing income, from figuring out results in receiving cost 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 techniques. If the acquired firm has a powerful model in an space the place the acquirer’s present choices are nonetheless rising, it’d make sense to take care of that separate model and a few of its related gross sales and advertising infrastructure. By protecting the highest of the gross sales funnel separate, you would possibly be capable of seize extra income from clients in the long term.
6. Resolve the way to deal with knowledge.
   The acquired firm’s knowledge could be some of the worthwhile good points from an acquisition — however it may be a problem to combine it in a means that produces helpful analysis. If the acquired firm makes use of a unique cloud supplier, you could must construct a multi-cloud technique to achieve insights from merged datasets.
7. Align contracts and licensing.
   After you have 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 wish to line up contract renewal dates, phrases and situations, and subscription plans. If the acquired firm is getting a greater deal, you could possibly discover further 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 folks, processes and know-how takes time — and lots of thought. By laying the groundwork on the know-how aspect from the start you’ll be able to set the mixing up for fulfillment — and derive most worth out of your acquisition.

Jeff Highley is presently the Vice President of Answer Engineering at Rackspace Expertise, main a crew of technical pre-sales specialists within the Americas area.  Jeff has over 20 years of know-how management working throughout a number of industries and corporations.