Frequently asked M&A IT Integration Questions
During M&A processes, the infrastructure and applications of merging organizations are streamlined and unified, while technology standards are harmonized. The financial success of mergers and acquisitions often hinges on effective IT integration. Acquirers anticipate synergies from cross-selling, consolidating shared services, aligning sales forces, improving processes, and retiring legacy systems. All these synergies necessitate significant IT transformations. This section provides guidance for IT integration teams in developing a forward strategy to achieve synergy targets and meet the operational needs of the newly integrated organization.
What is the typical team structure for an M&A Technology integration?
Usually the structure is a 3-tiered hierarchy:
- A Steering Committee
- An Integration Management Office (IMO) led by an Integration Manager
- A variety of additional teams organized by function (i.e. sales, human resources, finance, and information technology, etc.) and/or by business unit, product line, process, or geographic location.
The various integration teams take their marching orders from the IMO. The IMO is ultimately accountable to the Steering Committee.
What is the role of the integration Steering Committee and who is on it?
The Steering Committee defines and communicates integration objectives and strategies, approves recommendations from planning teams, prioritizes initiatives, monitors progress, and makes decisions whenever an impasse is reached at the lower levels of the integration hierarchy. The Committee is usually comprised of C-level executives.
What is the role of the Integration Manager?
The Integration Manager leads the IMO, conducts the Integration Team Kickoff Meeting, educates teams on the integration process, balances and coordinates work across teams, ensures exit criteria are met, and captures lessons learned and recommendations for future acquisitions.
What traits should an Integration Manager have?
The role of Integration Manager in M&A calls for a versatile, multi-skilled person who possesses executive muscle and strong leadership ability. The Integration Manager must be able to take charge and bring order to an undefined, very fluid situation where a lot is at stake. These are the seven key attributes that an Integration Manager should have:
- Project management skills
- Power, authority, and executive credibility
- Social intelligence
- Tolerance for ambiguity and uncertainty
- Sense of urgency
- Strength of personality
- High-energy level
What questions should you answer when forming your integration teams?
- What key talents/strengths should members of the integration teams possess?
- What functions should be represented?
- Who should be involved in the selecting the team members?
- Will special compensation or bonuses be given to the integration team members?
- How long will each of the team members be assigned to the integration?
- Will this be a full-time commitment, or will they be required to also carry on their normal job responsibilities?
- What company knowledge and technical skills will be needed for the teams to be effective?
- By what date should team selection be completed?
- How frequently should the teams meet?
- Who should lead the Integration Management Office?
- What qualifications and skills, should this person possess?
- Will the teams have members from both companies?
How much time should integration leaders dedicate to an integration?
This depends on the size, complexity, extent of the integration, the timeline, the goals, and operating differences between the companies. Given those factors, which can vary a lot from deal to deal, functional leads will usually need to spend 20% to 80% of their time on the integration to be effective.
What is the first step in M&A integration planning?
During the initial step, executives agree on the integration's strategy, guiding principles, objectives, assumptions, and non-negotiables. The integration plans will draft off the direction set by senior management so there should be early discussions to identify and resolve divergent opinions.
What are the key elements in an M&A integration plan?
An integration plan should always include these 5 elements:
1. End States - Integration complete" should be defined. If it isn’t, teams will feel like they are in a race without a finish line.
2. Governance - Determine the integration hierarchy, decision-making protocols, and escalation routes so problems requiring senior-level input can be quickly addressed and resolved.
3. Communications - Planning communications in M&A takes much more effort than it does under more stable circumstances.
4. Tasks - Each task in a team’s plan should have an assigned owner plus start and completion dates.
5. Early Wins - Acquirers can help silence the skeptics by achieving goals that provide hard evidence the merger is rapidly bringing benefits.
What are the steps in the post-merger integration process?
- Define Integration Strategy and Guiding Principles
- Determine M&A Integration Governance
- Conduct Joint Integration Management Office (IMO) Meeting
- Provide Post Merger Integration Training
- Develop Post Merger Integration Risk Management Plan
- Develop Culture Integration Plans
- Develop Post Merger Integration Communication Plans
- Develop Post Merger Staffing & Retention Plans
- Develop M&A Project Integration Plans
- Execute Acquisition Integration Plans (Includes Day 1 Plans)
- Capture M&A Integration Lessons Learned
