Mergers are an important part of enterprise growth, but they present a number of challenges for IT departments in particular. CIOs must be sure to support their IT teams during these difficult transitions.
In 2005, eBay bought Skype for $2.6 billion. The motivation behind the purchase seemed excellent — eBay wanted to eliminate the friction of ecommerce interactions by offering their customers more personal communication channels. Skype appeared to be the perfect partner for them.
Four years later, however, eBay sold Skype for $1.9 billion. Onlookers called the merger an “epic failure,” arguing that eBay failed — from a technological standpoint — to integrate Skype into their company's mission and strategy. Although we can easily be critical of eBay for their subpar efforts, this scenario is surprisingly common. Mergers and acquisitions are an important part of growth for any enterprise, but unfortunately, 70 to 90 percent of them fail — and IT is one of the main reasons why.
Of course, a great many factors are responsible for such failures. Sometimes company leaders underestimate incompatibilities between organizational growth models, which can lead to gridlock in strategic initiatives. Other times, merging organizations have different core values regarding customer engagement, or business and marketing executives clash in unforeseen ways when beginning to collaborate.
Regardless of the specific challenges your organization may face when undergoing a merger, it’s critical that enterprise leaders do their best to mitigate potential issues by creating a concrete plan before joining organizations. Using the eBay and Skype fiasco as a roadmap, an advisable first step for merging enterprises is to synergize IT infrastructures at the earliest possible stages. After all, IT teams are often the lifeblood of daily operations. Without a well-oiled technical support team, CIOs may fail to set their companies up for success.
Avoiding Insufficient IT Infrastructures
When undergoing a merger, many existing processes and components must be addressed. Databases need to be migrated and combined, employees need to be onboarded to often unfamiliar systems, and new applications need to be rolled out. It falls to CIOs and IT teams to make sure these are all completed with ease.
What’s more, IT teams must be able to do more than just take care of daily operations — they are also charged with providing IT support to integrate the complex processes of various teams — HR, finance, CRM, ERP, sales, marketing. This IT support in a period of transition is critical to ensure that every department is set up for success in their new roles.
It’s also advisable that IT departments develop a thorough understanding of the merger’s long-term objectives. Establishing these long-term goals early on in the process will help avoid any unnecessary planning and wasted resources.
Of course, a few growing pains are natural, but if IT infrastructures between enterprises are not synchronized, it will become very easy for these growing pains to persist longer than anticipated. As such, IT decision-makers from both companies should be sure to work collaboratively, transparently, and as early as possible to preemptively create a new set of standards. This way, technologies and business processes can be rolled out with as few issues as possible.
Define Core IT Leaders
As important as managing technology and business assets are, successful mergers require employers to dedicate significant attention to the workers themselves. After all, transitions are stressful, and employees often feel unsettled when their status-quo is disrupted. In fact, a recent study of U.S workers found that roughly 20 percent of employees voluntarily leave the company after the announcement of a merger.
As such, an effective merger requires that CIOs identify key IT workers who are most able to aid in the technical merging process. Once identified, CIOs must ensure those workers buy into the overarching plans of the company. This is particularly important these days, given the increasing difficulty of filling out IT rosters. Losing even just one or two important members of your IT team could prove incredibly costly.
To execute proper IT due diligence, it’s important to carry out a thorough review of your technical staff. With up-to-date insights into how your IT team(s) are functioning, CIOs can better determine how to structure their new IT department as they turn the page on a former era.
Receiving IT Support During A Merger
Regardless of the industry, most successful mergers are made possible by fostering a culture of complete employee buy-in. This is particularly true for IT teams, who are tasked with ensuring that operations continue to run smoothly while simultaneously combining IT systems and teams from two organizations.
To help enable a seamless transition and ease some of the burden from IT, it’s a great idea for CIOs to seek out third-party IT support when undergoing any enterprise-wide change. That’s where Turn-key Technologies, Inc. (TTI) can be of particular help. With nearly thirty years of experience helping enterprises navigate challenging transitions, we have the necessary expertise to help your organization succeed. TTI’s networking experts are here to support your IT teams during your enterprise merger. With an a la carte menu of managed services, the award-winning engineers at TTI understand what it takes to keep enterprise network infrastructure strong and reliable — no matter what the future holds.