Making the move to complete a merger & acquisition is a big step toward greater profitability and brand success. However, without a post-M&A integration plan, a company could fumble and not achieve its goals. Technology plays a big role in every aspect of a business, so, it’s vital that company leaders implement a technology integration plan. This piece of the process will help ensure that the organization has a smooth and seamless transition.
The Complexity of Tech Integration in the M&A Landscape
Since technology is at the forefront of nearly every business, it poses an immediate challenge when navigating post-M&A integration. Keep in mind that an organization that has undergone a merger or acquisition process will need to combine the two businesses in an efficient manner. This includes tech integration. The two companies coming together may not be on the same page when it comes to technology.
Identifying Top Tech Post-Merger Challenges
Wondering how long an acquisition will take is probably at the top of leadership’s mind. However, the process can be cumbersome because it involves uniting two companies. One part of the integration plan involves consolidating IT systems or completely integrating a new company into existing technology. This can present challenges about which company leaders should be aware. It’s helpful to know how to address common acquisition concerns upfront.
Aligning Disparate IT Systems and Infrastructure
Both the acquiring and acquired company will have IT systems, processes, and tools that differ from each other. These separate IT systems operate independently and may have compatibility issues. It’s critical that the systems can share information and data with each other. The infrastructures of each business’s technology must be made compatible with the other in order to have successful post-acquisition technology integration.
The use of legacy systems and infrastructures by one company is a big issue that can hinder seamless tech integration. Legacy systems are outdated and do not integrate well with modern updated equipment. In fact, personal lines insurance acquisitions drive innovation, making being acquired a good choice for some companies who rely on old tech.
A way to resolve this problem is to be proactive. Before securing an M&A deal, be sure to do an exhaustive IT evaluation. This review should check for compatibility issues and other post-acquisition risks and challenges. Once identified, an organization can determine if a solution is readily available.
Ensuring Data Consistency and Quality During Integration
Another post-acquisition challenge involves maintaining consistency in information. Since the details are coming from two different sources, there may be variations in structures and formats. When merging into one entity, it’s critical to ensure accuracy and uniformity. Any corruption or discrepancies can result in inefficiencies across the organization. Additionally, inaccurate information could lead to non-compliance with regulations.
To resolve the problem, set up an integration plan that includes defining the framework for data governance. The framework should include issues such as validation processes, mapping, and more. Organizations can leverage integration tools to make the process more streamlined.
Cultural Differences in Technology Use and Expectations
When one organization acquired another, there is a coming together of two distinct work cultures. These corporate cultures may operate differently, leading to issues. However, a post-acquisition plan that addresses cultural differences will aid in a successful acquisition.
Some of the specific issues companies may face with a cultural clash are people’s resistance to change and anxieties about new technologies. This can potentially hinder the progress of integrating smoothly.
Part of the integration plan should include strategies that address cultural differences and ways to encourage a positive attitude toward new or different technology.
Maintaining Operational Continuity Amidst Tech Integration
During a merger, it’s crucial to keep operational continuity. Most companies can’t afford to shut down while they transition to the new business. Keeping the current business up and running can be a challenge but is necessary for continued profitability. Create a change management plan that can be implemented as the business goes through the many transformations that come with an M&A. Be sure that the plan is communicated with all employees, and that everyone is on the same page in regard to expectations.
Strategic Approaches to Overcome Tech Integration Hurdles
Any type of transition that a company needs to go through requires a strategy to be successful. Tech integration is no different. A thorough tech integration plan consists of strategies to overcome various hurdles. With a strategic approach, organization leaders will be successful in seamless transitioning. The role of leadership in cultivating a culture of innovation in insurance has never been more important.
Developing a Comprehensive Tech Transition Plan
The first step in any large-scale operation involves developing a transition plan that is comprehensive in scope but simple enough to execute successfully. The tech integration plan should highlight the steps that will be taken during the transition. The following should be included in the plan:
- A list of tools and systems that need to be replaced
- A timeframe for completing the replacement of tech
- A plan to train employees on new systems
- Clear communication with all staff about the upcoming changes
Creating a clear and thorough plan with these steps can increase the ease of the transition and decrease the number of problems a company will encounter during the process.
Employing Best Practices in Data Migration
When migrating data from one system to another, it’s important to use the following best practices:
- Have a clear understanding of all data sources and formats before proceeding
- Prepare a comprehensive map that clearly outlines how data will go from one system to another
- Make sure security measures are put in place to prevent data theft or identity exposure
- Test small bits of data migration at a time to ensure nothing is lost or corrupted
Prioritizing Cybersecurity Throughout the Merge Process
As briefly mentioned above, security is a major concern. Transferring information requires utmost care to ensure privacy compliance. This complex process can have serious consequences if mishandled. When dealing with sensitive customer details or regulatory matters, robust cybersecurity protocols must be in place to prevent breaches or errors during migration.
Learn About Confie’s Acquisition Process
Being acquired is often the most profitable course of action for a business. Since technology is at the forefront of every business, it plays a large role in the post-acquisition process. It is crucial to establish a strong post-acquisition tech integration plan to ensure a seamless transition. This involves identifying the technological challenges that come with merging two business entities. A review of each company’s technology systems will be a critical starting point as you prepare to consolidate all your information into a single infrastructure. Given the seriousness of security breaches and the confidentiality of customer details, robust cybersecurity measures are essential for a successful merger.
If you’re considering an acquisition, Confie’s team is here to guide you through the process. If you need thought leadership on this topic, you can consult with an advisor at Confie. We welcome people to discuss leadership opportunities within our organization. Our strong record in M&A transitions will give you peace of mind. Contact us today or call us at (714) 252-2500 for more information.
