A decade ago, fewer than one in four acquisitions were motivated by the desire to acquire innovative technology. By 2021, it rose to 36% and continues to do so. This growing interest comes as no surprise given that technology and platform-based businesses are disrupting industries everywhere.

What is surprising is how companies don’t make technology integration a priority. Companies that put early and significant emphasis on technology as part of their transaction strategy are in the best position to recoup their investment. According to Accenture, 80% of transactions that beat sector return on investment (ROI) averages put significant emphasis on technology during the transaction.

Yet, time and again, technology and security integration is overlooked when it could help drive strategy, value and growth, as well as support employee retention post-acquisition.

Why things go wrong
The short answer: lack of detailed planning

While due diligence is an essential part of the merger and acquisitions (M&A) process, it often doesn’t include detail on the systems or people a company is acquiring. It’s important not to underestimate the scale of the challenge. Take data transfer for example. Even small companies generate an awful lot of data. It can take a great deal of time to move petabytes of data. IT needs to know well in advance of the acquisition just how long the data transfer from one company to another will take.

Building on the M&A strategy issues outlined in my previous article, technology integration is much more complicated than just transferring the workplace systems, mission critical applications and intellectual property. And it’s rarely a 1 to 1 transition. Don’t get it right, and it could take years.

We’ve seen it happen when clients engage us post-acquisition. They fail to plan sufficiently for any workplace integration, and in some cases, years pass and there is still no integration in workplace technology or culture. They are effectively running two separate companies. A merger in name only. This lack of planning can seriously impact the growth strategy and ROI that triggered the acquisition in the first place.

Timing is critical
Once a deal is announced, regulatory approvals aside, companies typically have less than a year to make the acquisition. Because IT is the engine that keeps the lights on, CIOs and CISOs need to come to the table as early as possible to understand the target company and what’s being acquired or merged. That includes critical business systems like ERP and CRM, the workplace dynamics of the incoming entity (e.g., who works from where?) and the risk profile of the acquired systems and employees. And given the typical two-year retention clauses for acquired company employees, focus needs to remain on talent retention and the use of workplace analytics to ensure the two merged entities are operating as one.

Nail down the basics
For a seamless transition, IT should have a foundational plan in place to address essential operations, including:

• Security – The first step is to put a security wrapper around the systems and employees being acquired. You can’t know everything, but the more you can mitigate risk, the better you can prevent unintentional (read: malicious) access to systems.
• Telephony – Do phone numbers stay the same? Should the telephony system be switched off or merged? When is it time to adopt a converged communications approach with Microsoft Teams and eliminate the duplications of phone and conference systems, remove legacy telephony technology and reduce costs?
• Email and collaboration – On day one post-M&A, will everyone still be able to use the collaboration tools they rely on? Mailboxes can be migrated quickly. (Avanade can help move thousands of mailboxes overnight.) But the behaviors and preferences associated with mail, communications and collaboration should be factored into the future employee operating model.
• Employee onboarding – Communication is critical during employee onboarding. Equally important is a change management program to address the secure migration of people, processes and procedures that help ensure expected productivity gains and ROI aspirations are achieved within the first year.

Further reach, deeper benefits
Beyond the basics, there is more value to be realized through technology integration and adoption.

For example, enabling technologies like Microsoft Dynamics 365 and Power Platform can ensure your operations run smoothly well beyond day 100. Microsoft Azure cloud services allow employees to use a non-corporate laptop from an acquired company and get immediate access to their essential work processes like payroll. And using an always-on workforce analytics tool like Microsoft Viva Insights, IT can collect data to measure the effectiveness of the integration and the ongoing operation of the company through a data-driven change management program

With an advisory-led approach, Avanade links the needs of the business to the delivery of IT and the successful onboarding of new employees. Our experience across the full Microsoft technology stack streamlines the process through tried-and-tested checklists, accelerators and a transformation framework that supports the planning, design and execution across all elements of the technology and workforce strategy. We focus on the challenges around data, security, apps and more as well as on how technology can and should support the evolution of the business and the workforce post-M&A.

Got a merger or acquisition on the horizon? Register for our envisioning workshop and discover how our proven workplace migration roadmap can support your CIO and CISO in accelerating your journey to M&A success.

Look out for the final blog in our M&A series, where we’ll more thoroughly examine the human element of successful M&A: employee onboarding.