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The post-merger integration process is important for establishing a foundation for success whenever multiple businesses join forces.
There’s a lot that goes into a successful merger and acquisition (M&A) transaction. Company leaders must focus on integrating various parts of the business, from talent to tech stacks. It’s important to align on a strategy and move quickly to minimize costs and limit disruptions to existing customers.
Even amidst economic uncertainty, there’s evidence that the global M&A market is rebounding. With more activity potentially on the horizon, many companies will face the challenges of integration head-on.
Between 70-90% of acquisitions fail, mostly due to problems integrating the parties involved. This blog, and our Post-M&A Integration Bundle, can help you avoid becoming another statistic.
As a CTO by trade, I tend to look at mergers from a technical perspective. When one company acquires another, each side has to come together to create a unified tech stack. This can often feel like putting together a difficult puzzle. The sooner you can consolidate these tech stacks, the more efficient your operations will be.
The integration process must factor in the size of the company and the strategic reasons for the acquisition. Acquiring a company for the technology, customer base or talent requires different strategies. Saving the best parts of the tech stack and existing infrastructure while driving efficiencies in others should be the overall goal.
Here’s an example: York IE recently worked alongside Broadlume, the world’s largest provider of digital technology to the flooring industry. Broadlume had accumulated dozens of legacy applications through a series of mergers and acquisitions. Leveraging our hybrid onshore and offshore R&D services, Broadlume accelerated their tech stack consolidation. The joint team migrated 1,700 customers to a new platform within a matter of months. Through the process, York IE helped reduce Broadlume’s development costs by 15%.
Looking to achieve similar results with your post-merger integration process? Keep reading – and be sure to download our free post-merger integration bundle to stay organized.
What Is Post-Merger Integration?
Post-merger integration is the process of strategically aligning technology, people, and operations after a single entity acquires multiple companies or platforms. Merger and acquisition (M&A) transactions bring together distinct product lines, software frameworks, customer bases, and company cultures. A smooth post-merger integration process helps create a unified and powerful organization that leverages the strengths of each involved party.
In the B2B technology world, a post-merger integration can take multiple forms. Sometimes, the acquiring company will consolidate multiple similar companies to roll up an industry (i.e. acquiring various regional pest control software companies). In other instances, the acquiring company will seek out functionalities that fit well together to accomplish a whole life cycle for a vertical application.
No matter the type of acquisition, the integration process must be collaborative. Sometimes, a smaller startup might have key reusable components within its tech stack that the acquirer wants to integrate. In short, there’s no “one-size-fits-all” for post-merger integration.
Why Is the Post-Merger Integration Process Important?
The post-merger integration process is important because it sets a foundation for future innovation, increased market share, and business growth. Any M&A transaction includes a lot of moving parts. Efficiently moving through the post-merger integration process will help reduce the expenses associated with running your business on multiple tech stacks and free up time to focus on product innovations that will make life better for your customers.
The end result of a successful M&A is a collection of teams aligned to the new technologies, frameworks, and systems you’ve implemented. Streamlining operations and consolidating platforms often leads to a more consistent and efficient customer experience.
What Are the Benefits of Post-Merger Integration?
A successful post-merger integration can lead to increased collaboration within your development team, faster product updates and releases, and an improved customer experience. Add all of these ingredients together, and your business has a real opportunity to increase its market share and meaningfully grow revenue.
Better collaboration for your development team
It’s difficult to be efficient when your team is operating on two or more completely distinct tech stacks. Duplicate tech stacks can often cause organizations to splinter into duplicating teams for feature development, maintenance, and after-hour support — and add complexity in diagnosing and resolving time urgent maintenance issues when they occur.
Although the post-merger integration process can be time-consuming, consolidating your technologies will make life easier for your developers. The system will become easier to document, maintain and innovate on.
Faster releases
With a less cumbersome tech stack, development teams can be more efficient. This means they’ll be able to work through items on the roadmap faster and get features out to the market more quickly.
Improved customer experience
No matter what form your M&A takes, the end result is (hopefully) more robust software that helps customers derive more value in a shorter time. If you’re consolidating various types of software to create a vertical application, you’re giving your customers a more centralized platform to work from. Or, if you’re rolling up an industry by consolidating multiple similar platforms, you’re ideally taking the strengths from each of these platforms and producing a better overall product.
Post-Merger Integration Challenges
Of course, the post-merger integration process comes with its own set of difficulties. Integrating tech stacks, product lines and development teams can bring friction that company leaders must address.
Balancing technical and business decisions
Sometimes, the best technical decision isn’t the best business decision. Technical leaders have to understand the costs associated with their action plans. During the scoping and planning process, it’s essential to balance the benefit of a project with the expense and work required to complete it.
For example: sometimes that platform rewrite just isn’t worth the squeeze! Rewriting platforms that are low maintenance concerns — or going to be deprecated later in time — aren’t usually worth tackling. It’s an ROI calculation that needs to be taken into account.
Competing coding languages
There’s an old developer trope that says choosing a coding language is like choosing a religion. Put another way, some developers are really passionate about the methods and processes they’re used to! Great leaders are able to stay unbiased, select the language that’s best for the company, and balance the personalities involved in that selection process.
Migrating customers
The skill set required to migrate customers from one platform to another is different from the skills required to develop net new features. If you don’t have this skill set in-house, it’s best to connect with a third-party firm that can help lighten the load.
Maintaining new systems
Any successful post-merger integration plan requires a phased approach. Many tasks aren’t as simple as checking a box and moving on. Failing to maintain the previous projects can come back to bite you later in the process.
Be sure to leave behind maintenance squads that can continue iterating on your systems as you transition other squads to the next project.
8 Steps for Success in the Post-Merger Integration Process
Here are eight steps to nailing your post-merger integration process:
- Define your integration goals
- Evaluate your team’s capabilities
- Leverage external resources
- Assign roles and responsibilities
- Create a realistic timeline
- Schedule regular check-ins
- Conduct post-mortem reviews
- Close out the process
1. Define your integration goals
Begin by aligning on the key objectives for the post-merger process with your leadership team. Focus on goals achievable in the next 12-18 months. Prioritize areas that prevent disruption for existing customers.
2. Evaluate your team’s capabilities
Honesty is important in this process. Assess if your team has the right skills to meet these goals. As you adopt and merge tech stacks, consider whether your team requires additional training or needs to prioritize key aspects of your product roadmap.
3. Leverage external resources
If gaps exist in strategy or execution, consider bringing in external advisors. Partners such as York IE can offer unbiased perspectives and help streamline the process, improving communication between merging companies.
4. Assign roles and responsibilities
Delegate tasks effectively by assigning strategic leads (e.g., product managers) and execution leads (e.g., product strategists). Align team members’ strengths with their responsibilities to ensure smooth integration.
5. Create a realistic timeline
Develop a detailed plan focusing on 3-6 month phases for execution. Set aggressive but attainable deadlines, covering all aspects from architecture to user experience.
6. Schedule regular check-ins
Hold weekly meetings with all key stakeholders to assess progress. Analyze team collaboration, velocity, and any emerging challenges, making adjustments as needed.
7. Conduct post-mortem reviews
Inevitably, challenges will arise throughout your process. Host ad-hoc meetings to address issues, perform root cause analysis, and implement corrective measures. Cultivate a team culture of problem-solving without ego.
8. Close out the process
Ensure a smooth handoff by documenting systems and defining maintenance plans. Celebrate the team’s achievements, and clarify the next set of business goals to maintain momentum
These steps can help you navigate the complexities of post-merger integration efficiently, ensuring alignment, clear roles, and strategic execution.
What Are the Skills Needed for Post-Merger Integration Success?
The skills needed for post-merger integration success include strong communication, flexibility and a breadth of technical expertise. Post-merger integrations can be long and difficult processes, so leaders must be candid and able to decisively communicate their vision. As the project develops, teams must be able to adapt to priorities on the fly. Experience across a large breadth of technical architectures will help provide the strategic expertise needed to execute the integration swiftly.
And of course, a thorough post-merger integration plan bundle can help your team stay organized throughout the process.
Regardless of your company’s industry, M&A transactions could become more common in the future. Is your team equipped to tackle the post-merger integration process on your own? Or would you benefit from some additional resources to help supplement your strategy and execution?
York IE’s R&D team is equipped to help growing technology companies navigate the complexities of post-merger integration. Learn more about how our hybrid onshore and offshore resources can help you reduce development costs and efficiently integrate your new technologies.
