There are two ways a company can grow their market: through sales and marketing, and through acquisitions. Companies are increasingly choosing acquisitions as a way to leapfrog their growth, market share and capabilities. Austin, Texas -based Homeaway exemplifies this trend, with 18 acquisitions under their belt.
In fact, tech companies spent more than $100 billion in acquisitions in 2010, according to this video from a 2012 South by Southwest Interactive panel.
But whereas the technology tools for sales and marketing efforts are fairly simple –the right CRM and marketing automation application will do the trick - the mergers and acquisitions process brings it’s own technology challenge: the need to integrate the technology infrastructure of the merged companies.
And these integrations can get expensive, especially if they’re an after-thought for corporate decision-makers as I mentioned in my previous article.
So how can you keep the IT mergers & acquisitions integration process from becoming a headache and financial sinkhole? What we’ve been advising companies to do is to create their IT M&A Playbook.
If you’re going to make mergers and acquisitions part of your organization’s growth strategy, creating an IT M&A playbook is a must. Here are three reasons why:
Every company has an M&A technology unicorn or two. These are the IT people who become post-acquisition integration experts. They know their company’s strategic business processes, the best way to interface with the most common APIs, databases and technologies, and they know what’s worked and what hasn’t.
But what if your expert(s) get reassigned to a different department or leave the company? All that knowledge goes with them. Subsequently, each new integration is like a brand new integration, with the associated high costs, errors and perpetual learning curves.
The IT M&A Playbook solves this problem by systematizing your integration processes. It’s designed to document the knowledge held in your subject matter expert’s head, so you aren’t dependent on one resource that might leave you high and dry at any given moment.
This is the part of this blog post where you might be thinking, “Oscar, you’re cannibalizing your business!”
Well yes, if all I wanted to do is squeeze every last penny out of my clients by making them dependent on me, then I’d agree with you. But my goal is to help our customers become independent. And that’s the second benefit of an IT merger and acquisitions integration Playbook – it allows your organization to become self-sufficient in executing M&A integrations.
The playbook is not a physical “book,” it’s a virtual, living, breathing document. You add what you learn from each project, and incrementally improve the processes you’ve already documented.
So we’ve covered the ‘whys’ of the playbook, now let’s briefly get into the nuts and bolts. What are the key ingredients for an effective one? How should you build one? What are mistakes to avoid?
Here are seven elements to consider for your playbook:
Mergers and acquisitions have become a key market expansion strategy, along with sales and marketing. But the post-acquisition integration process often gets bogged down in complexity. The IT M&A Playbook is a key tool to avoid the mess. It’s designed to help you you reduce the time, cost and complexity of integration, and make every post-acquisition process as seamless as possible.
By documenting repeatable processes, templates, key documents and code, you create the institutional memory you need to successfully execute again and again without depending on unreliable or expensive resources.
These are some quick tips on how you can build your own playbook, but if want more information on getting help building your playbook, check out Softtek’s Mergers and Acquisitions IT Integration Services.