8 Important Questions to Consider Before a Technology Merge of Two Companies
Before two companies can merge, careful evaluation of all facets of each business needs to be performed, especially when it comes to Information Technology (IT). Not only do you need to know the IT capabilities of each company, but also how they can be integrated into one working IT infrastructure. Additionally, if one company has vulnerabilities in its IT system, it could cause serious problems once the merger has been completed. Because so much is riding on the effectiveness of a company’s IT, it’s essential that you ask the following eight technology questions before the decision to merge takes place.
1. Are You Putting Adequate Importance on Developing a new IT Infrastructure?
If you’re acquiring a smaller company that has a significantly smaller IT infrastructure, you may be able to just absorb them into your IT systems, meaning that they will have to migrate to your IT infrastructure. Obviously, this requires a lot of planning and work, but it’s less of a challenge than when two equally sized companies with different IT infrastructures merge.
In such a case, you’re going to have to decide whose infrastructure will be best suited to handle the IT needs of both companies once they merge. It’s one of the reasons why there’s never true equality when two companies merge, since one company will inevitably have to completely revamp their IT infrastructure to merge with the other unless their systems are very similar. Unfortunately, it’s not generally as simple as having one company switch their entire system and processes over. You have to take into consideration scalability.
Even if your IT infrastructure is more sound and larger than the company’s you’re merging with, your system may not be able to handle that company’s users and needs. As a result, you may have to develop a new IT infrastructure that can handle the IT needs of everyone — something that will require a lot of planning beforehand.
2. What Systems are Currently in Place?
You need to do a thorough audit of your IT systems as well as the other company’s IT systems to identify the processes, software, and hardware that are essential to the operation of both businesses. It may not be as simple as getting one company to migrate their operations to your IT infrastructure (or vice versa), after all. This way, when you do begin building one single IT infrastructure, you can focus on integrating those particular processes, software, and hardware to ensure that operations don’t come to a screeching halt as a result of the merger. Additionally, understanding the technological infrastructure of the company you’re merging with is important since a part of the reason you are merging with them is to obtain their intellectual assets, which are often tied to the IT infrastructure of a business. If they have valuable data tied up in their systems, the last thing you’ll want to do is risk losing it by forcing them to migrate to a new IT infrastructure where they will have to adapt to new software and hardware applications.
3. How Well Can Those Systems Integrate to Form a New Technology Infrastructure?
Once you’ve performed an audit on both companies’ IT infrastructures, you’ll need to decide how to integrate all of the essential IT systems together into one new technology infrastructure. This can be incredibly challenging and may require you to revamp the newly formed company’s entire systems in order to accommodate the software and processes of both businesses.
For example, one company may have much more extensive hardware capabilities that will make it easy for a smaller company to migrate to; however, that smaller company may be using software essential to their operations that does not run on that hardware. You’re going to have to figure out how to integrate their software into your IT infrastructure.
4. What Systems Need to Be Let Go?
Outside of the systems that drive the operations of each company, there will likely be systems that overlap and that can be let go to help make your new IT infrastructure more streamlined and efficient to use. You don’t want different users using different software applications that do the same thing, after all. Not only is this not very efficient and a waste of resources, it could pose challenges in the future in terms of in-company collaboration and could result in disparate silos of disorganized data.
For example, once your companies merge, one company will most likely absorb the other’s accounting department. If each company was using different accounting software for their employees, you’ll want to consolidate so that everyone in your newly formed accounting department will be on the same page.
5. Are There Opportunities to Upgrade Information Systems?
Besides just attempting to consolidate two IT infrastructures into one and implementing new hardware or systems in order to accommodate certain processes, you should strongly consider looking for ways to upgrade your IT systems as well. For example, maybe the computer systems being used by one of the companies is outdated. You may need to upgrade those computers, especially if your company doesn’t have the hardware at the moment to allocate to all of the new employees that will be coming aboard.
Of course, this is just an example of what you may have to upgrade. There are other things that you may want to consider upgrading just as a way to improve the potential flexibility of your IT infrastructure in the future. For example, you may currently rely primarily on on-premise servers, but could use the merger to begin migrating the IT infrastructure to a more strategic cloud model. Doing this could improve flexibility and control as well as help increase the security of your data.
6. What Security Measures are in Place and are There New Security Risks Posed?
In addition to evaluating the IT systems being used as a whole, you’ll also need to look at each company’s security measures. The last thing you want to do is integrate software into your IT infrastructure that presents security vulnerabilities because of one company’s poor security protocols.
Vulnerabilities in one company’s IT security can expose your entire infrastructure to potential data loss or cyber attacks if they’re not identified and addressed. As a result, you should look into each company’s disaster recovery plan, perimeter security, anti-virus solutions, network authentication methods and more.
You’ll want to address security concerns before you begin integrating and consolidating IT systems. You should also consider any potential security risks that might be involved in the migration or integration process. Once this has been done, you’ll want to reassess your security protocols and put into place new security measures to ensure that your final IT infrastructure is not only without vulnerabilities, but that all new employees will know how to use your systems safely and securely.
7. How Does Company Culture Affect the Way Technology is Used?
Mergers often involve the need to lay off numerous employees, which can make things a little tense throughout the company. In fact, removing certain systems from your final IT infrastructure might mean having to let go some of the employees in your IT department. In any case, employees are going to have a challenging time adapting to the merger, which means that the transition to a new IT infrastructure needs to be made as smoothly as possible.
Because many of your new employees will be forced to use new software, new hardware, and new processes, you’ll want to make sure you address the issue of onboarding them as quickly as possible. If you don’t address your employees during the rebuilding of your IT infrastructure, it could severely hurt their productivity, making it difficult for your new company to hit the ground running following the merger.
Make sure that once you begin implementing new technology all of your employees are properly trained to follow new processes and use new hardware and software. Keep them in the loop to prevent a lack of cohesion and general confusion about what they need to be doing.
8. How Quickly Does the Merge Need to Happen?
The time it takes to integrate or consolidate IT systems will vary depending on numerous factors. If you’re just extracting data from one system and porting it over to another and the smaller of the two companies is simply switching over to the new IT infrastructure, it may not take that long to complete.
However, if you’re overhauling your IT infrastructure in order to accommodate different systems and processes, it could take months. In cases where the businesses that are merging are on the larger side and the IT infrastructure for both is complex, it could even take a few years.
Either way, once talks are underway concerning a merger, it’s important to begin planning how it will affect the IT infrastructure. Ideally, you’ll have done a thorough evaluation of both company’s IT infrastructures and determined the best course of action regarding the upgrading, integration, consolidation, and elimination of different systems. This way, once the merger is complete, the process of merging the IT into one infrastructure can begin and will hopefully go as smoothly and efficiently as possible. Without such planning, disorganization will run rampant and it could have damaging effects on your new company’s ability to operate effectively.
Ask the Right Questions and Make Sure the Right People are in Charge of Technology Integration During a Merger
There’s a lot to consider when it comes to IT integration that will occur once two businesses merge. Because your company’s security and operations will be heavily dependent on your IT infrastructure, it’s vital that you ask the right questions and that you put the right people in charge of the IT integration and migration process.