Insight Mergers Acquisitions and Divestitures User Guide
- June 5, 2024
- Insight
Table of Contents
Insight Mergers Acquisitions and Divestitures
Specifications
- Product Name: Mergers, Acquisitions & Divestitures Guide
- Purpose : Drive Focused Growth, Avoid Technical Debt & Cut Complexity
- Key Features: Technology Synergies, Device Lifecycle Management, Culture & Process Integration
Mergers, Acquisitions & Divestitures:
Drive Focused Growth, Avoid Technical Debt & Cut Complexity
- Change is an unavoidable part of enterprise technology systems — in most organizations you’ll find a long history of decisions that shifted the infrastructure to meet new business demands. As a result of all the change, you’ll also find complexity and technical debt.
- If an enterprise can accumulate tech debt so readily by itself, add Mergers and Acquisitions (M&A) and divestitures — and tech debt becomes an implicit part of the deal. Every business is unique, with different technology systems, processes and cultures that need to be integrated or separated. During change, shortcuts, compromises or limited solutions often lead to innovation hurdles and even more tech debt. And while good tech debt can be accrued deliberately (with a strategy to pay it back), business leaders are often shocked by the extent of tech debt lurking in their environment, where it has accumulated and what it has cost the organization on its growth path.
- In this guide, we’ll cover the most common pitfalls of M&A and change activity, key considerations and how to bring more focus to your integration or separation initiatives.
Ensure a broader understanding of technology synergies.
Every business has a unique technology infrastructure, with each ecosystem
integrating in its own way to align with requirements and goals over time.
During M&A and divestitures, it’s common to overlook or misunderstand the technology synergies between the companies involved. This can be due to limited visibility into the technology landscape, differences in technology architecture or a lack of communication between IT teams during the change. When organizations fail to integrate systems properly or consolidate data, they may:
- End up with multiple systems that are redundant or incompatible, leading to increased maintenance costs and complexity.
- Expose security gaps and compliance risks.
- Create operational inefficiencies.
- Miss opportunities to optimize technology investments, leading to ineffective operations.
- Fail to identify crucial assets and processes, such as patents, networks, clouds and renewals. The most critical technology assets that are commonly overlooked include networks, domain names, source code, security boundaries and clouds.
- Accrue more tech debt, making it difficult to unlock innovation and compete in the market.
To prevent these pitfalls, businesses should prioritize technology integration and consolidation as part of their M&A and divestiture strategies. Successful organizations will often conduct a comprehensive technology assessment for an objective lay of the land, then develop a clear integration plan that addresses all aspects of technology, including hardware, software, data and security.
Strategic device management:
A key factor in successful M &A and divestitures
- M&A and divestitures can have a significant impact on device lifecycle management.
- If companies are not strategic about their changes, they can introduce bad tech debt into the environment, preventing them from building a modern workplace and unlocking new capabilities.
For example, companies need to consider the end of life of their devices during an M&A or divestiture and ensure that their data is secure and properly disposed of. Additionally, they should explore opportunities to reuse, sell or dispose of their devices to maximize their value and earn sustainability credits.
Failure to consider these factors can lead to a buildup of outdated devices, security risks and missed opportunities for cost savings and sustainability. Therefore, companies need to think more critically about device lifecycle management and incorporate it into their overall modern workplace strategy during change and growth initiatives.
Don’t neglect culture, people and process.
Failing to integrate teams properly or align business processes not only
diminishes morale — it can also lead to inefficiencies like duplicated or
incompatible workflows, which hike up maintenance costs and complexity. It’s
also common for enterprises undergoing significant growth and change to face
talent attrition, which can lead to a loss of institutional knowledge and
decreased productivity.
During M&A activity, organizations often neglect culture, people and business processes. There may be:
- Differences in the platforms people use to do their jobs
- A lack of guidance in how employees should communicate
- Broader cultural differences between the companies involved
- Disparities in management and decision-making styles
As with any successful M&A plan, success starts with assessment and evaluation across all aspects of business culture, including the preferred processes of employees. This can include everything from leadership styles to communication platforms, HR and employee engagement. Prioritizing culture, people and business processes ensures a successful and sustainable integration that benefits all stakeholders involved.
Remember: People are your impact factor.
Companies should identify essential individuals before M&A activity. While it
may not be required for these teammates to stay on long term, it is critical
to identify them and retain them through transition. Often, the individuals
that make the organization work leave early in the process before the M&A is
complete. Smaller organizations may have jacks-of-all-trades that keep the
ship running smoothly. When they leave, this impacts the transition greatly,
and the acquiring organization never even knows what changed.
SPOTLIGHT ON
Organizational Change Management (OCM)
When changes are made without considering the impact on employees, it can
lead to resistance, confusion and errors that can create and worsen technical
debt. OCM is a structured approach to managing the people side of change in an
organization. It helps minimize risks by involving employees in the change
process, providing them with the tools and resources they need to adapt to
change and ensuring that they understand the reasons for the change and how it
will benefit them. It involves identifying potential risks and challenges
associated with change, creating a plan to address these risks and
implementing strategies to support employees through the change process.
The benefits of OCM include
-
Minimizing resistance to change:
OCM helps to identify potential sources of resistance to change and provides strategies to address them. This can help to minimize the negative impact of change on employees and the organization. -
Accelerating adoption of change:
By providing employees with the tools and resources they need to adapt to change, OCM can help to accelerate the adoption of new processes, technologies and ways of working. -
Reducing the impact of change on productivity:
OCM can help to minimize the disruption caused by
change and ensure that employees remain productive during the transition. -
Improving employee engagement:
By involving employees in the change process and providing them with the support they need, OCM can help to improve employee engagement and satisfaction. -
Achieving better business results:
By successfully managing change, organizations can achieve better business results, such as increased efficiency, productivity and profitability.
Migrate with due diligence and focus on systems — not only applications.
Focusing on applications instead of systems can lead to a lack of
understanding of how the applications are integrated and how they interact
with other systems. The result: issues with integrity, poor system performance
and increased maintenance costs.
Additionally, if applications are not properly integrated or separated, it can
create inconsistencies in business processes and data, leading to confusion
and errors. Organizations need to conduct a comprehensive assessment of their
technology systems and develop a clear integration plan that addresses all
aspects of technology, including hardware, software, data and security. This
approach will help businesses minimize the risk of technical debt and ensure a
successful and sustainable integration or separation.
The power of visibility: Discovery engines
Understanding what your organization has and how IT assets interact and
perform across IT environments is critical.
Discovery engines like Insight’s proprietary engine, SnapStart, provide
comprehensive maps and information that help drive informed decisions about
migrations, modernization, decommissioning and consolidation. SnapStart
features include:
- Scans 10X–20X faster than other discovery engines
- Identifies all IT assets, dependencies, counts, requirements and criticalities
- Provides reports of cloud-ready applications
- Does not require off-siting — all data remains local
Support your business-critical applications through change
The process of integrating or separating technology systems can be complex
and time-consuming, requiring significant resources and expertise. While
financial or legal considerations are a crucial part of a transition plan,
neglecting the importance of maintaining application functionality can lead to
a range of problems. This can include downtime, data loss, decreased
productivity and inconsistencies in business processes and data.
Ultimately, failing to support business-critical applications during times of change can have significant negative impacts on an organization’s operations and bottom line. It can also create tech debt, reducing the efficiency and effectiveness of important business processes, forcing manual workarounds and leaving opportunities for growth and innovation in the dark.
A deeper dive into tech debt
In this guide, we unpack strategies and key considerations for remediating
tech debt — from cybersecurity to the cloud.
- Get the guide→
Consider the impact of cloud/data centre on compliance, security and BC/DR.
- Businesses should prioritize the integration or separation of the data centre as part of their growth and change plans. The data centre is a vital component of an organization’s technology infrastructure — it houses the servers, storage devices and networking equipment that support critical operations.
- It’s important to factor the impact of the cloud and your data centre into your M&A or divestiture activity. Without proper integration or separation, compliance gaps or redundancies are more likely, to expose the business to regulatory risks. If the cloud/data centre environment isn’t properly secured, it can leave the business vulnerable to cyberthreats, data breaches and other security risks. Without a plan for ongoing maintenance and optimization, your existing or new environment can compromise the organization’s ability to recover from disaster or disruption.
- The cost of neglecting the cloud can be significant — including financial penalties for noncompliance, reputational damage from security breaches and lost revenue from disruptions to operations.
THE QUESTION OF SECURITY
6 bases to cover
Integrating or separating security environments can be a complex, high-stakes
transition. Here are six key elements of a transition plan that minimize risk
of data loss:
- Comprehensive security assessment to pinpoint all existing security tool sets, risks and vulnerabilities
- Contingency plans for managing any potential security incidents or breaches (business continuity, disaster recovery, etc.)
- Employee training on security best practices before, during and after transitioning
- Clearly defined steps to ensure data protection throughout the transition, including security and monitoring tools (firewalls, intrusion detection systems, data loss prevention tools, regular security audits and vulnerability assessments)
- Communication and collaboration across business lines — including IT teams, security teams, legal and other key stakeholders
- Understanding of compliance and regulations, and potential changes as part of the transition
TAKING THE RIGHT STEPS
Finding solutions
It’s important to respond quickly and skillfully during M&A and divestitures.
While major events can cause disruptions that impact multiple lines of
business, leveraging sound methodologies and enterprise integration frameworks
can ensure a successful transition.
Insight brings decades of experience helping clients navigate pivotal business
events. When organizations lean on Insight, they can expect strategic guidance
across:
- Mapping, prioritizing and consolidating domains, endpoints and tenants
- Modernizing legacy infrastructure and workflows
- Migrating workloads, applications and data
- Securing and protecting data across environments
- Managing resources, teams, performance and utilization
https://www.youtube.com/watch?v=e6i43yOWzf8
M &A Activity: Navigating Change & Accelerating Transformation With
Insight.
In this video, Insight experts break down what they’re seeing in the market
and how Insight’s approach helps clients understand the totality of change.
Our approach
About Insight
Insight Enterprises, Inc., is a Fortune 500 Solutions Integrator with
13,000 teammates worldwide helping organizations accelerate their digital
journey to modernize their business and maximize the value of technology. We
enable secure, end-to-end transformation
and meet the needs of our clients through a comprehensive portfolio of
solutions, far-reaching partnerships and 35 years of broad IT expertise. Rated
as a Forbes World’s Best Employer and certified as a Great Place to Work, we
amplify our solutions and services with global scale, local expertise and a
world-class eCommerce experience, realizing the digital ambitions of our
clients at every opportunity.
Discover more at insight.com.
©2024, Insight Direct USA, Inc. All rights reserved. All other trademarks are
the property of their respective owners.
Frequently Asked Questions
- Q: How can businesses prevent technology pitfalls during M &A?
- A: Businesses should prioritize technology integration, conduct assessments, and develop clear integration plans covering all aspects of technology.
- Q: Why is device lifecycle management important during M &A?
- A: Proper device management ensures data security, maximizes value from devices, and prevents the buildup of outdated tech, security risks, and missed cost-saving opportunities.
- Q: What are the key considerations for culture and process integration during change?
- A: Assessing culture, aligning processes, addressing differences in platforms and communication, and prioritizing culture and people are key for successful integration.