Whether you are merging two roughly equally companies, or acquiring a smaller company, you will need to develop a solid strategy for how to integrate the IT departments. Every situation is unique and comes with its own set of challenges, but there are a few keys that every decision maker should be aware of.
1. Evaluate Both Companies’ Current IT Infrastructures
Your CIO or IT Director will need to create a detailed analysis which clearly outlines the people, roles, processes, and equipment for each company. This is the step where your team will want to document what aspects of your infrastructure work well, in addition to what is lacking. For those systems that do work well, you must also determine whether they will be scalable to accommodate the needs of the new larger company. For example, you may have inventory management software that works fine for one warehouse, but if you are expanding to multiple locations with their own supply chains, you might need an entirely new solution which is capable of handling
2. Find and Eliminate Redundancies
Much of the benefits of a merger or acquisition are due to cost efficiencies made possible by reducing staff and creating economies of scale. Based on your evaluation of each companies’ IT systems, you will want to choose the components of each that will scale best for the new company. If each company currently employs 5 technicians and help desk personnel, you may find the new company would be well-served with only 8 total. Similarly, if each company uses a different email system, you will likely need to choose one going forward.
3. Consider Outsourcing Some Functions
Particularly if technology is not a major focus of your company, a merger or acquisition might be the right time to rethink whether certain functions of your IT department might be better served by a third party. For instance, up until this point, you’ve operated out of one location, and have had all your computers networked on a local intranet. Now that you are expanding to several smaller locations across a region, it might make sense to contract that function out to a company which can handle it securely and efficiently rather than bringing on the talent needed to do it in-house.
4. Retain Unique Technologies
Especially when acquiring a smaller company, you will likely keep most of the IT infrastructure of your larger company. But part of the reason you are acquiring the smaller one is because they have done well in what they do. If they have a specific technology or process that your company lacks, you will want to integrate this into your new company. If you are acquiring an oil and gas well servicing company, they might have a great system for tracking equipment in real-time in the field. By retaining this technology and integrating it into your own infrastructure, you will make your whole organization more efficient.
You might also consider using the capabilities of the company you acquire to insource some functions which you had previously contracted through a third party. If your company purchases web hosting and application development as a service, but your target company hosts and develops in-house, you can integrate this competency into your own IT department and eliminate the need for the the third-party service.
5. Implement Your Strategy Quickly
A strategy is only as good as it’s implementation, and a strategy that is only half-implemented or executed over the course of years will not only cost time and money, but will prevent your new IT department from accepting its new culture and identity. To this end, you will want to put one person in charge of the integration, who will have complete authority to make technical decision, but also complete responsibility to ensure deadlines are met and that all systems are operational during the transition period. This person should have the flexibility to deal the inevitable difficulties that arise, being able to implement temporary workarounds while developing long-term solutions.