Key To Successful M&A Integration Strategy

Judging by the number of memes, 2020 is shaping up to be one of the most turbulent and unpredictable years in modern history, mainly due to the unprecedented convergence of global health, political, and climate crises. Industry consolidation is a likely response to these challenges across many verticals and geographies. Mergers and Acquisitions (M&A) are a great way for companies to rapidly expand their product and service portfolio, increase market share, and expand the sales, supply, and partner channels.

Yet these outcomes are far from guaranteed. According to most estimates, between 70% and 90% of M&A fail or fall short of expectations. This is a highly complex journey with a large degree of uncertainty as it simultaneously impacts People, Processes, Platforms, and the Partner ecosystem. Comprehensive M&A integration strategy and architecture must be put in place to address these challenges and ensure successful outcomes.

Most of the M&A focus is placed, rightfully so, on a business strategy and execution plan. Often overlooked is an Enterprise Integration strategy and architecture. The key integration architecture goals of Security, Reuse, and Self-service are especially important due to the forcibly shortened transition period typical for the majority of M&As and helps achieve the typical long-term, “one team, one goal” endgame.

The integration architecture diagram (admittedly oversimplified for the purpose of this article) might look something like this:

Post-merger, companies initially retain a high degree of independence and continue to operate within their application silos. The integration priorities typically include consolidating the financial data and enabling new sales and fulfillment channels. This step is often a stress test on IT teams, integration architecture, and platforms. The pressure is high to deliver the results in the shortest period, and often the corners get cut, and the resulting integration solutions tend to have high levels of technical debt and process overhead. Companies with mature integration competency and comprehensive technology platforms, such as Mulesoft Anypoint, are much better positioned to be successful during this critical phase.

As the teams and processes continue to be harmonized across former org boundaries, the application stacks are typically consolidated into a consistent set of common systems such as CRMs, Commerce, ERPs, Line of business and supporting applications.  While this phase may not have the same intense time pressure as the initial integration phase, the overall complexity and potential impact are significant, especially for companies operating legacy applications on platforms such as IBM i (AS400) or mainframe. The integration architecture patterns focused on application decoupling, such as API layering and event-driven patterns, are important success factors.

Below are our M&A integration recommendations:

  • Develop the Enterprise integration architecture upfront as a key part of M&A strategy
  • Build or expand an integration competency team and include key people from various application teams and technology partners
  • Consolidate on a single enterprise integration platform, such as Mulesoft
  • Place strong focus on Security, Reuse, and Self-service
  • Leverage common integration architecture patterns to decouple the applications and minimize the impact during the transition state
  • Develop the templates / playbooks as a collection of ready to use recipes for future M&A and broader Digital Transformation initiatives

M&A is always difficult and places a lot of pressures on the teams and stacks. Comprehensive M&A integration strategy, enterprise integration architecture, capable integration delivery team, and common integration technology stack help organizations achieve the coveted 1 + 1 = 3 outcomes.

To learn more about how our integrated platform services and support options can help your business solve your short-term challenges and set you up for future success, contact us today!

Dmitriy Kuznetsov