Mergers are pivotal moments in a company’s lifecycle, but alongside the benefits come the challenges of transforming two separate entities into a stronger single organization. From a technical standpoint, business and IT leaders need to meticulously review which systems and procedures are most effective for supporting the future vision for the combined organization. Some companies have technical deficiencies or implement work-arounds because the appropriate solution would be too costly and disruptive, which leads to suboptimal performance and unnecessary risks.
Mergers present the perfect opportunity to revisit these issues because:
- If these issues are not addressed during a merger, additional complexity could exacerbate current issues, like stacking two unstable Jenga sets on top of one another.
- Mergers scale your company quickly, so any technical upgrades would have a compounding impact on the combined entity. The ROI formula changes, making additional costs more appealing.
- Mergers are disruptive by nature. Companies are required to dig deep and rethink their foundations, so large, impactful undertakings are easier to prioritize during these periods.
Customer experiences, inventory management, logistics and employee operations all have one thing in common: They’ve become more reliant on digital ecosystems. Concerns that were traditionally limited to the confines of the IT department—such as network capacity, software compatibility, cybersecurity protocols and data management strategies—are now being discussed across every corner of the business. If leaders navigate a merger well, the resulting company can confidently move forward with a robust, secure and scalable technical foundation to pave the way for sustained innovation and success.
This piece provides a blueprint of the major technical considerations to navigate during a merger.
Take A Hard Look At Your Technical Systems
Each entity is approaching the merger with their own technical environments, work-arounds and issues. Plus, solutions that work perfectly for one company may not work well for the other. It is critical to address the discrepancies between the following common pieces of each company’s technological puzzle.
1. Reviewing data storage and transfer systems
If a pipeline flows from one river into a reservoir, then connecting a second river via the pipeline requires the pipes to be widened and the reservoir to be expanded. Otherwise, the pipes would become too congested from the increased water flow and the reservoir would overflow from the additional volume.
Similarly, leaders of both organizations need to ensure that the data storage capacity and network bandwidth are sufficient for the combined volume of data. Neglecting data transfer capacity often causes slow application performance, which could lead to inefficient operations and frustrated users. Analyzing latency and packet loss across common geographic points and critical assets (like office locations, popular user markets and data center locations) will help identify bottlenecks that exist in your network ecosystem. Utilizing the Network-as-a-Service model enables scalable bandwidth so you can adjust your capacity on demand with the click of a button, plus usage-based billing that enables flexibility as you address technical uncertainties.
To achieve optimized data flow and reliable performance, careful planning is needed so that systems can distribute data throughout your entire network. Employing multiple network providers or highly distributed solutions, such as edge computing, further increases the likelihood of complications because data can quickly become too siloed to be functional. Moving to a network with an expansive footprint and breadth of product offerings can alleviate many of the performance and reliability issues that arise with stitched-together solutions.
Inadequate data storage capacity can hinder processes that are critical to security and effective utilization. Extra storage space is required to regularly back up your data to help ensure business continuity, and to migrate data to provide your technical infrastructure with the flexibility to evolve. Overcrowded data storage or siloed data can also limit or slow the utilization of large data sets, often causing crashes. To avoid these risks, it’s important to calculate the amount of data you have, establish retention periods and account for data backup needs.
2. Reconciling system incompatibilities
Merging entities often brings together a diverse ecosystem of hardware and software. Incompatibility issues can arise based on how the various levels of technical infrastructure interact, such as network hardware and protocols, operating systems and applications. These discrepancies can lead to suboptimal performance and crashes for tasks that had previously worked well, creating unpredictability throughout your business. IT teams must develop a strategic roadmap to address foreseeable issues and consistently monitor and resolve unforeseen incidents by establishing aligned diagnostic and resolution processes.
Many companies hire managed IT services companies to act as an extension of their teams during pivotal times like mergers, tailoring their roles toward anything from consultative planning to execution. These companies benefit from economies of scale to hire teams of experts and employ cutting-edge tools that could cause delays and overspending if companies tried to replicate those resources themselves.
3. Unraveling overlapping pieces of your systems
Most mergers will involve identifying overlapping systems and deciding whether to maintain, integrate or decommission them. An effective approach can lead to significant cost savings, but comprehensive assessments are needed to ensure that systems don’t break and users aren’t left frustrated from overcomplicated changes.
Shield Your Combined Organization With A Wider Cybersecurity Umbrella
Creating a technical system that serves two previously separate entities will be more expansive than each company’s prior system, increasing the potential entry points for malicious actors. IT teams need to create a cybersecurity umbrella that covers both companies by reviewing policies and procedures, along with aligning security standards for digital tools.
Below are examples of common policies and procedures towards which IT teams should have a keen eye:
- Establish system policies (e.g., firewall rules and endpoint security rules)
- Align system maintenance (e.g., data backup schedule and stress test schedule)
- Iron out team processes (e.g., incident response plans)
- Unify communication strategies between business and IT leaders (e.g., Cyber Risk Quantification)
- Establish employee policies (e.g., cybersecurity training and remote access policies)
Each entity likely integrates tools that contain their own vulnerabilities, so it’s important for the IT team to review the security standards of each tool in common use cases, like:
- Data transmission security (e.g., decide when dedicated internet may be beneficial)
- Data + model storage security (e.g., private clouds vs. public clouds vs. on-prem storage)
- Cybersecurity monitoring tools like Lumen Defender℠, which provides real-time cyberthreat insights, alerts and reporting
- Backup systems need to cover both entities for disaster recovery before integration because, once intertwined, a failure in one can cause a failure across both organizations
For a comprehensive overview of establishing a strong cybersecurity posture (with a cool castle metaphor), read our cybersecurity best practices guide.
Come Out Of Your Merger Stronger
The integration of technical systems during a merger requires both meticulous planning and execution to avoid common pitfalls and emerge with a stronger organization. This presents an opportunity to rewrite your company’s technical approach, upgrade outdated systems and simplify complexities to prepare for the future.
As the foundation for your technical ecosystem, your network plays a pivotal role in the ability to integrate systems and improve performance and security across the entire organization. Lumen is a global leader in networking, including a breadth of offerings under one roof that can serve the needs of merging organizations.
Help ensure a smooth merger with the right networking partner.
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