Tis the season for acquisitions-and not just around the menorah or under the tree. The economy and financial-sector crisis have made mergers and acquisitions a hot topic this year - and not just in the banking industry. In fact, Network World recently ran a piece on the tech industry's biggest mergers and acquisitions of 2009.
As I've noted before, back when this blog bore the pithy title of Mergers and Integrations, M&As are a major challenge for IT departments, but too often, IT isn't invited to the M&A table until the deal is sealed. A 2007 Hay Group study on mergers and acquisitions found that 75 percent of managers worldwide admit they don't always consider how integrating IT systems would affect operations until after the merger.
That's a baffling development, considering the value of IT systems and the challenges of integrating them. I'd like to believe that things have changed since that study, but I couldn't find new research on the topic, and somehow, I'm skeptical.
Is it any wonder only 9 percent of business leaders believe their M&A deals fully achieve the original objectives?
Given that Quest acquires four to six companies on average each year, Fawcett has had plenty of chances to develop a solid integration plan, and she's surprisingly specific. For instance, she shares that most small shops-say with 30 employees-run Microsoft Exchange, so Quest came up with a standard approach for integrating data from Exchange:
We went through a consolidation effort recently where we put all of our Exchange servers on one platform so it would be easier to bring in different corporations. With Migration Manager, we're able to pull the data off their Exchange Servers, clean it up and put it into our environment fairly quickly. It's the same with creating the [Active Directory] accounts.
Of course, integration gets a bit trickier with larger companies. To ensure IT doesn't hold back business operations, Fawcett's IT division buys a bit of time for a proper integration by making synchronizing the environments:
Usually we'll put up a tool like Collaboration Services that synchronizes two [Active Directory] and Exchange environments. It doesn't actually migrate any data, but it hooks up the two global address lists and presents them as one to the end users so it looks like you've done a migration. You can see a person's phone number, their address, who they report to, but you don't actually have the impact of a true migration. That gives us time to sit back and figure out how we want to handle this.
Fawcett also discusses how Quest handles non-Microsoft companies, although it did seem that the company's experience in this area was bit thin. She talks a bit about an acquired company that ran Linux, and how all the financial systems have to be moved to Oracle, but that's about it.
The simple fact of the matter is that as more business processes become automated, the more customers are going to find themselves locked into the specific IT architectures on which those systems are built. We can talk about the merits of open systems in the context of better enabling mergers and acquisitions, but even when two companies are lucky enough to be using the same platform, there is still enough devil in the details between the two systems to make them incompatible. ... the real question may be: Has IT become too complex to make these types of deals really feasible in the first place?
While it's always fun to see how someone handles technology challenges, Fawcett's discussion of the organizational and political challenges of M&As might be more valuable to CIOs and business leaders facing their own M&A challenges. She's forthcoming about the frustrations these deals can place on IT and how she's learned to manage that. She's also bullish on IT being involved with merger and acquisition discussions from the get-go.
It's a good, quick read. You might also want to check out these previous posts: