Companies merge, get acquired, or are spun off from parent organizations all the time. When two organizations merge, they need to figure out what to do with their IT assets – what becomes common property, and what ends up in the proverbial dumpster.To do this without kicking the legs out from under your most mission-critical applications, both parties are going to need to conduct the mother of all audits.It’s Important to Plan Ahead.
Companies understandably want to play their cards close to the vest when there’s a merger or acquisition, because if news leaks, it can wildly affect a company’s valuation. With that said, the IT department ideally has a seat at the table. The months of negotiations before an M&A are officially announced is the perfect time to get to know your counterpart and make plans for integration.
Even if you can’t officially begin moving equipment until after the announcement, having a sense of what your organizations bring to the table from an IT standpoint will greatly smooth the process once it’s underway. This is worthwhile even if the merger doesn’t go through:
- ITAM is extremely valuable to day-to-day IT operations. If you don’t have it in place already, the prospect of an impending merger is more than enough reason to start working on it.
- Even if the merger doesn’t go through, the knowledge you’ll have obtained from the planning exercise will be invaluable when it comes to other projects such as data center migrations.
Understanding the Pre-Merger Audit Process
Let’s talk about the audit you’re going to have to go through. Depending on how you’ll absorb (or be absorbed by) your merger or acquisition partner, your audit may be very easy or very difficult. Let’s assume that you’ll be fully absorbed, however, because that’s going to represent the apex of the difficulty scale.
Here, you’re going to end up sharing both software and physical assets. This means that it’s imperative not just to find the list of applications that you’re running, but to tie them to your hardware. Ideally, you’d be able to walk into your server room, point at a server at random, and immediately understand the programs that it’s running. (For an easier way to accomplish this, skip to the end of the blog.)
From the standpoint of the merger, this will let you pool your resources that much more quickly. Not only will you be able to know which applications you bring to the table, it will also help you understand what a migration may involve. If the merger requires that you shift your applications to a different server platform, or incorporate your partner’s infrastructure into your environment, you’ll be that much more prepared.
You’ve Found Your Mission-Critical Applications – Now You Have to Deal With Them
In a merger or acquisition, there are going to be two kinds of mission-critical applications. First, there are applications that both companies absolutely need for compliance, day-to-day functionality, and productivity. Both companies are going to have payroll and accounting software, for example, as well as plenty of Office 365 licenses.
When it comes to these applications, your first point of contention will be how to standardize. If you each have a different kind of payroll software, for example, you’re going to have to decide:
- Whether to keep one application and jettison the other
- If so, which application to jettison, and how to convert and import its data into the remaining app. Furthermore, how will you train and onboard your existing users into the new app?
- If you end up keeping both applications, will they remain separate or share data? How will you set up data-sharing between two different applications?
The answers to these questions are very much going to depend on the kind of merger or acquisition you’ll be going through. If an acquisition target will remain a standalone company following the acquisition, very little consolidation or re-configuration will need to occur. During a more involved merger, it’s likely that every system owned jointly by your two companies will need to be touched in some way.
In addition to all of this, however, you’re going to need to consider a second kind of mission-critical software – custom applications. For example, many companies pursue acquisitions or mergers in order to take advantage of their partner’s custom software. If the merger or acquisition partner is remaining standalone then it’s not your problem. If they’re not, however, then not only do you need to train your company on custom software, you also need to understand how to repurpose your existing infrastructure in order to support it.
This is much easier said than done. Custom applications tend to have over-complicated arrangements of web servers, they may be comprised out of a patchwork of legacy technologies, and their original designers may have retired — without leaving behind any convenient documentation. Getting an up-to-date map of these application topologies in an ITAM system will make your merger a much smoother process.
Expedite the Merger Audit Process with Device42
When you work with Device42, you can potentially shave months off the time it would take to audit your company prior to a merger. In a matter of moments, our technology can map all of the hardware and software on your network – plus all of your dependencies. This lets you spend less time getting merger-ready, and more time learning how to weld two software environments together to create a best-of-breed experience. For more information, download our free trial today!