M&A is a significant high-level strategic initiative. In any organizations, the strategic initiatives are usually around new markets, competitors, new products and services, technology, disruptive models and happenings, increasing market share, consolidations and divestitures, cost optimizations, operational excellence and possibly any deemed force majeure.
Like the old saying, there may be a method in the madness, there may be certainly a template to handle M&As. Having said that, I would like the managements targeting a M&A exercise, to consider separating the strategic M&A projects related to core business from the strategic IT projects aiming for IT systems integration and consolidation.
Let us consider a fictitious situation involving Company A and Company B aiming for complete M&A. Let us assume that both the companies have similar business and operating models. Let us also consider that both the companies are major global companies.
While the core business operations are being considered for M&A, the IT systems integration and consolidation (let us call it using the acronym ITSIC) should be treated as a next level phased strategic exercise. This ITSIC exercise should derive its plan from the strategic M&A plan and should be mindful on the timelines/cost etc., aspects.
M&A exercises may take considerable time to plan before the actual execution. The same may be true for the ITSIC exercise too.
Even before the ITSIC exercise, I would expect the IT environments of the both the companies, A&B to come to a common ground. They are as follows:
1.     Investing and taking steps to consolidate with the same cloud vendor.
2.    Clearly identifying the on-prem deployments and cloud deployments and adopting common mechanisms/tools for integration and other auxiliary services. This may mean that both companies will use the same vendor or mechanism for AD tool, API Gateway/management tool, ESB, databases, cache systems, other storage technologies, VPN, ISPs, DNS, Email servers, Httpd servers, CDN, ELBs, IDS, ETL tools, HSMs, IPS, Messaging systems, Notifications systems, Firewalls etc., Ideally the deployment architectures should be aligned to be the same if different or wildly varying.
3.    Common methods to egress and ingress data in batch and in real time should be agreed and implemented at both sides. Suitable high-capacity persistent Kafka or other cluster (or messaging systems) should be deployed as mainstay data pumping technology and an easy and streamlined process to add additional loads into this cluster should be agreed and implemented on both sides.
4.     Data dictionaries should be prepared on both sides for applications supporting core business operations and the data migration strategy should be discussed and agreed.
5.     Approaches to DW/BI storage using data lakes, data marts, visualization tools etc., should be synched.
6.     SIEM tools and integration should be aligned.
7.     There can be discussion between the 2 IT teams on SOC/NOC operations and network design. At least the core principles of network design, use of VPN, redundancy etc., should be openly discussed and aligned to a point that will make systems integration easier.
8.     Ideas around Digital Asset Management and Information security policies should be exchanged and aligned.
9.    Variations and outliers’ systems should be flagged and a plan to replace them should be discussed and agreed.
10. Upgrade the common tools to the latest versions as a baseline, on both sides.
11. Investing in the same, best in technology and capabilities for IAM (Identity and Access Management) capabilities and tools.
12. Aligning to the same SOP (Standard Operating Procedures) for backup and restoration services
13. Aligning to the same SOP for key management services for various assets.
14. Aligning to the same SOP for ITSM and SLA management.
15. Aligning to the same SOP for user onboarding and retiring.
16. Aligning to the same SOP for development projects leveraging SDLC, Agile etc.,
17. Aligning to the same SOP and tools with respect to project management, contracts management, software testing and in adopting DevSecOps.
18. Alignment on OT should be discussed and agreed.
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Once the M&A has started, if both teams has taken care of the above points in a well-rounded manner, it will be easy to do the ITSIC exercise since both teams are aligned already on the cross-cutting concerns.
Initially we may have both teams using different applications supporting core business operations at their end. Since the tools and technologies for the enabling eco systems are the same now, it will be easy now to focus on just application consolidation and data migration.
To identify which IT service model (of the 2 companies) can be adopted as a starting point, we may use a well-defined CMM (capability maturity model to assess the IT business units and its SM (Service Management) functions of the 2 companies.
The next stage of IT consolidation can be as follows:
1.     Merging of both systems in the same cloud and possibly on-prem too in a planned and phased manner.
2.    Applications and tools consolidation/movement/net-working for the aligned and agreed 18 points as above in a planned and phased manner.
3.     Data migrations for the above enabling systems in a planned and phased manner.
4.     Application re-engineering for the applications that will replace the similar other applications in a planned and phased manner.
5.     Data migrations for above point using point 3 & 4 in the list above.
6. For scenarios where application integrations are expected, once the application re-engineering is successful, technologies like REST APIs with versions can be used to supply data to legacy systems in old formats and also to newer systems in the new formats.
6.     Retiring of de-commissioned applications using a SOP.
7.     Ensuring necessary stand-by , archival of deactivated applications.
8.     Ensuring that all SPOFs are taken care of and redundancies are in place.
9.     Performing adequate testing and releases.
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Thus, we can see that the strategic IT systems merger (ITSIC) will take much longer time to achieve than the actual event of the M&A of the 2 companies! Â But if we handle the ITSIC in a careful and planned manner, it can be definitely taken to a fantastic successful conclusion that can lead to all lean benefits of such a grand exercise.