Mergers and acquisitions (M&A) are some of the most complex processes that any organization can go through. Although business outcomes are always couched in words like synergy, it’s all about making a new company that is stronger and more profitable from the merger of two companies. That is usually based on intellectual property,
processes, products, services, or all the above. But the real foundation of leveraging all those assets is the ability for the people to work via integrated IT systems and applications.
Our latest eBook titled “M&A Application Management in a Hybrid World” shows how application and workspace management can be the foundation for a successful M&A process. That’s because stakeholders expect evidence of post-merger business outcomes from the beginning of the merger process and not just after the average 24-month period.
Other Liquit blog posts have discussed the big challenges of achieving end-to-end application management in a hybrid cloud and workforce world. These challenges and the importance of the business outcome goals get decidedly more complex during M&A. That’s why the eBook looks at the entire process from pre to post merger and breaks down how IT is the foundation of a successful merger. This provides the understanding of how application management is the most useful tool in their toolbox to achieving that success.
Why IT and application management are a major key to M&A success
IT is often on the hook for ensuring operational integration and cost savings that lead to revenue building. That last part is what PE firms, stakeholders and the board of directors are looking for so they can create new value through products, services, and market expansion. Most of these executives expect those new products, services, and business to deliver 30 percent of their revenue by 2027, according to the McKinsey New Business Building Survey.
If your business has good people, good products/services, good processes, good market penetration, good market value, or any combination of these, you’re likely to be approached about M&A. The reasons and players across M&A are driven by diverse business outcomes that go beyond economies of scale and capturing cost synergies and the buy and scale approaches
There has been a recent settling in the M&A deal highs of 2022 along with some fears of future economic downturn possibilities, but M&A will still be strong in 2023. The buy and scale approach of engaging in multiple deals per year has become a winning recipe in 2023 for some businesses. These companies that engage in more than five deals per year reportedly grow at double the rate of companies that only selectively pursue M&A, and spend 38 percent less on each acquisition deal, according to McKinsey and Company.
Regardless of your organization’s M&A track, this eBook explains why IT is at the center of that process. The focus for IT is on the major importance of end user integration across the two companies. These two themes are always present throughout the eBook as it shows the importance of IT and application management through the lens of the M&A process. IT leaders must quickly merge communication and collaboration access via large and separate application stacks with changing access needs. This is vital to creating immediate integration across process fulfillment via end users.
The average organization uses dozens to hundreds of applications, and IT must manage them while delivering countless IT projects when things are normal. Many organizations use over a thousand applications while IT is expected to see a 42 percent increase in IT projects in 2023, according to a joint MuleSoft and Deloitte report survey. (Page 20 and 9). Those stats become even more relevant during M&A where IT integration and application management are vital to operational consistency, business viability, profitability, and other business outcomes in a changing hybrid cloud world.
In a typical 12–24-month M&A process, IT will need to evaluate, move, and change access parameters for hundreds to thousands of applications and end users. In the big picture, that can include:
- Merging duplicate applications
- Replicating applications to new user groups
- Lower licensing cost for SaaS and VDI (Virtual Desktop Infrastructure) platform use through efficient consolidation
- Quickly streamline the application provisioning, access, and update process to save time and money
- Decommissioning some legacy on premise apps that can be replaced with SaaS.
All the different end user application and platform needs (like VDI) and remote access on any device that are constantly changing during the M&A process are not just a secondary nightmare for IT. The IT organizations of both companies must look at IT integration on a fundamental scale (usually with the use of APIs) but also on an ongoing daily scale for end users.
That means ensuring that every end user can communicate, collaborate, and stay informed about the M&A changes every day. This is where the eBook breaks it down to show how Liquit can support both processes in ways that save an enormous amount of time, and a significant amount of money and confusion from the pre- to post-merger lifecycle.
Reaching this goal starts by gaining visibility into the current application stack through a comprehensive application discovery and mapping solution. IT can then see what business apps are being used, their location, purpose, workload/service dependencies and connectivity requirements for both organizations. This becomes the foundation for creating consistency that delivers the same structure, best practices, and services to each business process.
How application management increases end user productivity during and after M&A
The reality that IT and end users from both companies are at the center of the successful merger or acquisition is what takes the reader through the M&A process from the transitional service agreement to Day 100 and post integration development. Along the way we take a closer look at application management through the M&A lens.
This shows how it enables IT and stakeholders to balance risk, costs, value, and speed through pre-, mid-, and post-merger application management. With a benefits and process understanding of the benefits of application management during M&A, it’s easy to see how an end-to-end application management solution like Liquit can bring a mountain of benefits including:
- IT time and cost savings
- End user time savings
- Faster integration
- Greater productivity
- Smoother change management
- Better operational and merger communication
- Anywhere operations for hybrid work and distributed and disparate M&A organizations
These are all ongoing goals of every organization that take on greater importance during M&A with during and after M&A. IT must quickly develop an integrated and agile structure. This is the only way to deliver the post-merger business outcomes that make the board of directors and stakeholders happy.
The challenge of managing multiple teams during acquisitions can mean different users and groups logging into systems with different accounts. This becomes a nightmare for IT as new user access and restrictions become highly changeable due to the nature of the M&A process. The ideal scenario is to have centralized authentication and single sign on process that can be easily scaled and changed across all users and applications from a central location.
Regardless of the business motivation for M&A, the business outcomes must serve the client and customer base by:
- Maintaining customer experience continuity
- Smoothly expanding the customer base
- Delivering the same or better services
- Smoothly integrating new services, products, or markets
This makes end user productivity, collaboration, and communication via application access just as important as Integration of other major IT systems and platforms. IT is on the hook for quickly and cost effectively achieving these goals that enable a seamless customer experience. That must happen during the transition, even while you’re consolidating operations behind the scenes.
The ultimate goal is to quickly and cost effectively create an easier and more unified application and workspace experience on the front end and a simple, fast, and automated IT experience on the back end. When IT has Liquit in their M&A toolbox, they can deliver the ideal user experience from pre- to post-merger while enabling IT to focus on other major IT integration projects.
To access and download the eBook “M&A Application Management in a Hybrid World,” click here
Join our live session “Making IT the hero of M&A Integration Success” on June 20th. Register here.