Technology Integration for Merging or Divesting Firms

mergers divestitures

How WCA Technologies Supports Merging or Divesting Firms with Technology Integration

Mergers and acquisitions (M&A) and divestitures are common in the modern business landscape. In recent years, many companies have engaged in M&A deals or announced plans to divest one or more of their businesses.

Companies typically merge with or acquire other companies to expand the business, capture operational or revenue synergies, acquire new assets, or boost stakeholder value. Similarly, they engage in divestitures to restructure their operations, improve operational efficiency, or free up cash to fund growth.

These potential benefits notwithstanding, M&As and divestitures often create multiple challenges for firms, particularly from a technology standpoint. An experienced and reliable tech partner like WCA Technologies can help resolve these challenges and create value from such deals.

Common Technology Challenges Created During M&A and Divestiture Deals

Per one Harvard Business Review (HBR) article, 70-90% of M&A transactions fail. Divestiture deals can also fail to create the expected value for the divesting organization. Increasingly, technology, or rather poor technology integration, is emerging as one of the biggest risk factors for M&A (or divestiture) failures.

Some of the most common technology challenges created during M&A and divestiture deals are:

  • Lack of visibility into IT estates makes it difficult to integrate them.
  • Over- or under-provisioning of software licenses increase IT costs and limit business output.
  • Poor unification of tech stacks and data environments disrupt operations and hinder employee productivity.
  • Non-standardized hardware are hard to migrate and causes performance issues that take time to resolve.
  • Different compliance and security standards and practices create non-compliance and security risks for the new business entity.

In addition to the above challenges, unrealistic human expectations also contribute to problems during mergers and divestitures. During such deals, IT teams are under a lot of pressure to integrate and standardize disparate environments quickly. But when they move too fast, they end up making costly mistakes. Further, many don’t use the right tools or the services of experts like WCA Technologies, which prevents them from ensuring effective technology integration.

How WCA Technologies Streamlines Technology Integration During M&As and Divestitures

Previously we saw how technology-related challenges can make or break an M&A or divestiture deal. These challenges show that technology integration is a critical element of any such deal. And since 70% of technology integrations fail in the beginning of the deal rather than the end, it’s vital to bring on a technology partner as early in the integration effort as possible.

A partner like WCA Technologies enables firms undertaking M&A or divestiture deals to avoid common tech-related roadblocks, set critical technology priorities, support the deal thesis, and achieve target state on time and within budget.

Here are some key areas where we provide support during M&A/divestiture technology transitions and integrations:

  1. Email Integration

Email remains a vital communication and collaboration channel for enterprise teams, especially teams in newly joined or divested entities. For this reason, it’s essential to get disparate email systems to work together seamlessly. This means integrating various email and calendar systems (M&A) or splitting a single email system into two different mailbox systems (divestiture).

Either way, the effort can quickly become very complex, usually because i) use different applications (e.g., Microsoft Exchange vs. Zoho) or ii) use different incompatible versions of the same applications (e.g., Exchange 2013 vs. Exchange 2019). In addition, a lack of visibility into individual network and email application topologies create integration or separation roadblocks. Finally, the involvement of multiple stakeholders in M&A and divestiture projects add delays so the email migration takes longer than anticipated.

WCA Technologies specializes in reducing the complexities associated with email migration during M&As and divestitures. We integrate email systems and infrastructures, and enable users from merging or divesting organizations to seamlessly collaborate with minimal disruptions or downtime. We also plan the migration effort and strengthen email security controls to keep email-related threats out and prevent data losses.

  1. Tech stack integration

When companies merge or when a company divests one of its businesses, it’s essential to create a technology integration (or divestiture) strategy and identify the new technology priorities for the new company or companies.

A failure to create such a strategy and carefully plan the new technological ecosystem can create unnecessary disruptions during and after the M&A or divestiture deal. It can also prevent the new company or companies from working effectively. In the worst cases, it can cause a complete breakdown or failure of the deal.

WCA Technologies enables merging and divesting firms to create a robust integration strategy to ensure a smooth transition. We also help them identify and execute the most critical technology priorities across processes and functions and improve steady-state performance post-merger or post-divestiture.

  1. Technology standardization, consolidation, and rationalization

Effective technology integration before and after an M&A (or divestiture) requires a workable plan for long-term standardization and rationalization. Standardization is important because operating with multiple tools or platforms can create inefficiencies and introduce many security risks. Non-standardized tools also increase employee training costs, customer onboarding costs, and IT maintenance costs.

WCA Technologies enables firms to create a workable plan for long-term technology integration and rationalization. We also help them to:

  • Streamline newly-expanded software and application portfolios
  • Standardize the application architecture
  • Retire old applications and legacy tools
  • Adopt suitable new tools
  • Optimize software licenses
  • Optimize hardware utilization
  • Optimize data storage
  • Consolidate servers (and other technologies or hardware)

Seamless Technology Integration During Your Next M&A or Divestiture Deal

Technology integration can be an overwhelming prospect during any M&A or divestiture deal. But as we have already seen, it is also a critical element of such deals. WCA Technologies can reduce the stress and transform tech integration into a source of tangible deal value. Contact us to know how we can help you meet your technology integration goals during a merger or divestiture.