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Making IT work in a merger and acquisition environment

In a single move, mergers and acquisitions can provide businesses with a tremendous tool for increasing growth, profitability and improving strategic capabilities. M&As are gathering speed and last year domestic acquisitions between UK companies were valued at £2.1 billion. Investment projects like this shape the future of the businesses involved, often bringing a completely new structure to all organisational layers.

With merged businesses keen to prove ROI and cut and control costs, the IT department is often put under enormous strain to ensure all IT is ready from the get go. No business can afford to switch off even for a day. So the role of the IT manager or CIO becomes fundamental to completing the integration process whilst maintaining productivity.

Planning for the future

Merging two completely disparate IT systems into one will bring the IT department a number of different challenges. In order to be as effective as possible, the new company needs to standardise all IT platforms as quickly as possible. However, during this transition, the IT team not only needs to ensure regulatory compliance, but it also needs to bear the future growth of the company in mind and keep costs within budget.

When combining two sets of IT assets, the IT managers should have the luxury of picking what they do and don’t want to keep or whether they want to invest in new infrastructure. With duplicate or redundant systems removed, replaced or streamlined, IT departments can make way for the latest implementations. However, should one or both of the companies have just invested in a new service; this presents a new set of challenges, as anyone would be loathed to just ‘throw it away’. M&As then become simultaneously constructive and disruptive processes, with IT departments often needing to compromise on their vision for the company. As IT managers embark on this brave new world of combining legacy and new systems, it will take time to build the right balance.

Meanwhile, it’s imperative that the business continues to function effectively regardless of what stage of the process the M&A is in. The unmerged systems must continue to deliver on their separate functions, as throughout the process, vast quantities of data will continue to be generated. In order to bridge the gap, the solution is to synchronize the existing systems and consolidate data through file transfers. This ensures that the merged businesses are still receiving all the information required from both systems. File transfers are fundamental to the success of the M&A process, collating and managing the data from each disparate system, to provide one effective IT solution.

Making IT a help rather than a hindrance

File Transfer Protocol (FTP) solutions have been the weapon of choice for file transfer management. These solutions, however, are severely limited to point-to-point connections - just moving and dropping the file from points A to B. In our increasingly complex business ecosystems, enterprises require much more control and detailed insight into their data transfers to know how their business is performing at any given time. An organisation is only as strong as its weakest link and an FTP is not strong enough to handle a business under normal conditions let alone a post M&A ecosystem.

Instead businesses need to use a much more, reliable, sophisticated and efficient IT solution. One that can not only provide the protection needed to protect confidential business data, but also the necessary stability and automation that ensures the new organization is up and running on a standardized platform as soon as possible.

Managed File Transfer (MFT) solutions, provide the management, control and optimisation capabilities that FTP lacks. A file or application is securely transferred across multiple points. It provides such reliability, businesses don’t need to check it’s been delivered, they know it has. This level of reliability will save an already stretched IT department a lot of time. It offers further critical capabilities such as checkpoint restart and prioritising the most important files. It offers the intelligence to ‘know’ where the file needs to be sent, as well as ‘expecting’ other file delivers. This puts the user in complete control of their data.

Businesses also need to maintain data visibility at all stages of the transfer process or the results can be catastrophic. There are already plans in place to update EU data protection regulations and there could be heavy fines for any companies that fall foul of the law.

Getting up and running

One of the key benefits in transitioning to a comprehensive MFT solution is that it can be rolled out over time, since it can work with legacy infrastructure and services. This means that companies don’t need to “rip and replace” to start enjoying the benefits of the new MFT solution.

At the early stages best practice dictates that the largest file transfer implementation gets transitioned first, like gateways that handle the majority of data transactions. It is beneficial to consolidate these environments first before the IT team turns their attention to the smaller IT environments. This leads to the manageable evolution of IT systems, rather than a “revolution” that could cause discontinuity and disruption, increasing economic cost, risks and operational disruption.

M&As are not just a tool for increasing corporate growth and improving the positioning of firms, but also a great opportunity to re-assess and restructure an organisation’s IT infrastructure. In today’s competitive environment, no company is an island and it will need to efficiently navigate a sea of information with partners and suppliers. But this has to be done through a carefully planned and managed process. The presence of an effective and efficient IT strategy, based on governing the complete flow of data, can be the determining factor in a successful integration.

How data will be shared, managed and secured in the restructured organisation needs to be addressed as soon as there’s a whiff of a merger. Businesses could be dealing with thousands of data flows and millions of files at any one time. Without the ability to govern these flows of data, IT departments are not only less efficient but they could also be at risk of losing data or breaching data regulations. Businesses need to develop a data flow strategy, review their existing IT assets and ultimately choose their go-forward platform so during the M&A process IT is ready for anything and the business can concentrate on the success of the business and not worry about where the files are.

Written by Jean-Claude Bellando and Bill Reeves, Product Marketing Director and Sr Director Solution Marketing, respectively, at Axway.


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