Even when businesses are functioning as usual, mergers and acquisitions are intense and demanding transitions for companies to pull off. From the constant communication required in the preparation phase, to the technical demands of integrating two teams, a merger or acquisition forces companies to exhaust resources in order to make the transition a smooth success.
Then the pandemic hit. Those standard M&A challenges were exacerbated by a new set of hurdles: the inability to conduct business in person, rapid changes to company technologies due to remote work, the added complexity of integrating teams through entirely virtual means, and more.
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As a result, the M&A market came to a screeching halt last March. Abandoned big-ticket acquisitions dominated headlines – like Boeing backing out of acquiring Embraer’s commercial jet business in a $4 billion deal. Left and right it seemed that companies of all sizes either hit “pause” or walked away entirely from major transformational deals due to the pandemic.
According to the Harvard Business Review, a staggering 70 to 90 percent of acquisitions fail, in most cases due to problems during the IT integration of two or more parties. And keep in mind: those alarming failure rates refer to pre-pandemic acquisitions.
So, IT teams are under more pressure than ever when it comes to integrating multiple end user population during a merger or acquisition.
Despite new challenges, businesses have found innovative ways to navigate M&A deals during the pandemic.
We’ve seen M&A deals suffer in the past due to outside forces. The economic recession of the mid-2000s, for example, caused many deals to fall through or fail as a result of market instability and financial roadblocks. But the pandemic presented a unique challenge, as it not only created financial hurdles but also forced businesses to reconfigure the communication methods with which M&A deals are developed and negotiated.
Now for some good news. As we moved into the fall of 2020, there was finally an uptick in M&A activity. According to Financial Times, the M&A market picked up by 88 percent during the second half of last year, with companies executing $2.3 trillion in deals globally since July. This was partially a result of opportunistic buyers with a surplus of investment capital – but the surge also points to how quickly companies embraced innovative methods and took an employee-centric IT approach to push those deals across the finish line.
How IT can influence M&A deals today
Given the difficulties of M&A transitions in regular times, it’s clear that IT has its work cut out for them when it comes to facilitating M&As during the pandemic. With the right tools and tactics, however, IT can still succeed in supporting these transitions, even when both parties are fully remote.
Let’s review the principal ways IT can enable an M&A deal and effectively facilitate the integration of disparate technology setups:
1. Increase visibility into application experience.
From an IT perspective, one of the biggest challenges of a merger or acquisition is understanding the relevancy of the apps and technologies being used by the organizations involved. When two or more organizations merge, the integration of technologies is one of the most volatile stages of the process.
When IT has holistic visibility into applications and how end users engage with them, they’ll be able to make more informed decisions regarding integration and migration deals. For starters, they need to understand what apps employees rely on and how they use them, as well as how these apps relate to the technologies being used by the other party in the merger or acquisition. Increased visibility also enables IT to compare and contrast functionality across both parties’ applications and track readiness for migration.
2. Optimize IT infrastructure for efficient migration.
Even with increased visibility, IT teams still face a major challenge when it comes to integrating applications, networks, and systems as fast as possible following a merger or acquisition. Fortunately, there are ways to optimize IT infrastructure to remove complexities from this process and reduce the time and cost to make the transformation.
For example, desktop virtualization is a strong option for companies looking to bring employees onto a consistent platform rapidly – which is particularly useful during a merger or acquisition.
Through virtualization, IT is able to make the shift of data and applications much more efficient and secure. By deploying cloud desktops to end users, IT can handle desktop provisioning from a centralized location, secure data more effectively, and provision users into their new environment with minimal overhead.
Learn more about the benefits and use cases of desktop virtualization here.
3. Prioritize end user feedback and sentiment data.
It’s essential for IT to track and measure end user experience throughout the merger or acquisition process. This is specifically important today, when employees from both parties are isolated from one another in remote offices.
Employee sentiment is one aspect of that experience that is often undervalued during mergers and acquisitions. It’s important to not only understand what has been migrated and how it’s performing, but also what users think of it. Buy-in from end users is critical to maintaining momentum during the transformational period of two organizations joining forces.
Nexthink can support enterprise clients with their M&A initiatives by providing superior insight. This enables IT professionals to make informed decisions to avoid the pitfalls of poor diligence from information poverty and, ultimately, critically improve the chances of a seamless IT M&A integration.