The business landscape is shifting rapidly, and the pace of this year’s M&A activity will surpass 2016 and 2017 full-year levels, according to 451 Research. This presents some serious challenges for IT, but M&A also provides an ideal opportunity to take a hard look across the two organizations, and assess the applications, infrastructure and plan for the future. Strategic IT leaders can use this process to standardize, streamline and simplify their environment so that it not only aligns with the merger/acquisition strategy, but also serve the business goals in the future.
When planning for an M&A event that involves combining two highly complex IT infrastructures and organizations, it’s important to start by considering how you are going to manage the following:
- Meshing of cultures and coordinating efforts between departments and staff that may feel that they’re competing for their jobs or to maintain their status
- Consolidation of hardware and other resources, including consideration of which systems can be decommissioned
- Merging of systems of record, business process management software and customer-facing applications
- Gaining control over disparate infrastructure, including software and systems running on hardware residing in geographically separated data centers, multiple cloud services, and virtualized environments, so that it can be centrally governed
Starting with application rationalization
To be certain, this can be a gargantuan undertaking, so it’s important to pick the right starting point for understanding how all of the ‘bits and pieces’ fit together. Application rationalization is a review and analysis of your application portfolio and it can generate meaningful results:
- Decreased complexity
- Cost savings
- Confidence that your IT environment is built to align with new company values and goals
As such, application rationalization is a critical part of taking control of your expanded portfolio, including everything that you are inheriting from the company that you’re merging with. It is the process of assessing IT applications across the organization to identify those that should be eliminated, consolidated, or replaced.
Although app rationalization is only a first step to optimizing your application portfolio, it forms the foundation for a highly scalable and agile IT organization, and is an important precursor to the next phase: discovery and analysis. By creating a comprehensive list of IT applications and evaluating their role within the organization, you’re able to create a roadmap for transformation to a more efficient, lean IT enterprise.
Discovering and analyzing the intricacies and quirks of your IT environments
With a comprehensive list of your company’s applications and their roles in hand, you are ready to dig in and find out how it all fits together. Here are a few tips to making this an effective process:
- Get in early. Thoroughly map all assets, IT/data integration, data migration, and regulatory compliance requirements of the entire IT landscape during due diligence. If you wait until later, you’re going to be continually playing catch up, and will miss opportunities to create new efficiencies.
- Rise above silos. Unify information from siloed sources such as CMDBs and DCIMs to create a single map of all servers, storage, networks, applications, and other elements of your infrastructures and their various interdependencies, pinpointing gaps and areas that raise questions.
- Talk to the business team. Meet with all business colleagues to understand their goals for consolidation and growth of the new organization and expected current/future processes which require IT support.
- Consult with the SMEs. Build their knowledge into your plans so that you understand the applications not just from the technical standpoint, but also from the business standpoint.
- Create a universal map of your entire IT landscape. Make sure that this single source of truth can be accessed by every person who needs to be involved, in real time. This can only be done with collaborative software–you can’t use Excel spreadsheets.
Planning for a successful merging of IT organizations
Now that you have a good understanding of what the organization needs, what assets the companies have today, and how they are all connected to each other, consider the Gartner recommendations for evaluating your assets and making decisions as you shape the transformation of your IT portfolio, bucketing applications into “rehost, refactor, revise, rebuild or replace”.
Finally, before you start actually moving or consolidating anything, it is crucial to:
- Build flexibility into your transformation process. As you are building out your runbook, sequencing each step in the right order is going to be critical to ensuring that applications don’t go down. Your plans should be able to adjust to changes that may happen on the ground, without having to completely rewrite your runbook.
- Coordinate the activities of humans and machines. Some activities will be automated, some must be carried out by humans, and some may involve a combination of the two. Careful coordination will also help mitigate some of the turf-battles that may be going on.
Using M&A to plan for ongoing change and growth
While merging your IT infrastructure during M&A activity is indeed a tremendous undertaking, companies should look at it as an opportunity. The exercise of completely understanding the intricacies of the entire IT landscape will help you understand where improvements need to be made. Organizations have the opportunity to build much more efficiency into their operations. More importantly, the entire exercise provides a blueprint for building an organization that is resilient in the face of future change–because you already have accounted for how everything “works together”, you can more easily flex to the needs of the business without causing disruptions in critical business services.