The merger and acquisition market is on track to hit record levels in 2018. According to Mergermarket, the first half of the year saw 8,560 deals recorded globally at a value of $1.94tn, with 26 deals falling into the megadeals category of over $10bn per deal.

While M&As present incredible value for businesses, many organisations don’t put much thought into what happens after the documents are signed, says Neerav Shah, General Manager EMEA at SnapLogic. As a result, he continues, many past M&A deals have failed to live up to their promise, with organisations struggling to manage the cultural and technological challenges associated with these deals.

The landscape is littered with unsuccessful mergers and acquisitions, companies that did not heed obvious risks that, in retrospect, were avoidable. Instead, dealmakers focused on the benefits of the transaction, such as prospects for a larger market share, competitive advantages, reduced costs, increased efficiencies, and more diversified products and services.

While the opportunities need to be at the forefront of any deal, organisations need to also address the potential risks and challenges if they want to realise these opportunities. This means integrating newly merged companies effectively, and quickly, should be of paramount importance once a deal is agreed in order to keep critical functions operating at full speed during the post-transaction integration period, realise operational synergies in the ongoing merged entity and to align all employees around a single, merged corporate identity.

As consulting firm McKinsey put it: “Integrating merging companies requires a daunting degree of effort and coordination from across the newly combined organisation… Those that do integration well, in our experience, deliver as much as 6 to 12 percentage points higher total returns to shareholders (TRS) than those that don’t.”

The considerations for integrating the companies typically fall into two main areas: cultural and technological. While the first is an obvious challenge, merging two completely different company cultures, consolidating technology and data often proves to be a more complex task, not least because of the increased level of vulnerability to cyber security incidents both organisations will have during this process.

The sheer number of IT systems and cloud applications in use by companies today, also makes the process of integration more complicated. These days it’s not uncommon for a company to have inked partnerships with more than a hundred different cloud providers. When two organisations combine, integrating all the applications, systems and other sources of data consumes an inordinate amount of time.

Obviously, there is a need for data integrations to occur quickly and seamlessly, minimising the time in which the oceans of data flow from one system to another, from one application to another. Many companies are still struggling to integrate the data they hold within various systems in one company, so when two are involved they need to take a very process-driven approach to not only ensure that security isn’t compromised but also that the most can be made from the data.

Best practices include identifying all the data assets that need to be transferred first, and then determining the specific data standards, policies and processes that will be used to conduct the transfer. Rather than transferring all the data at once, consider a piecemeal approach in which different data sets are prioritised for transfer at different times. Both the finance and HR departments are good areas to start due to the importance of the data they hold in relation to not only business performance but the deal itself. Data that is not destined for transfer should be immediately destroyed.

Lastly, invest in integration tools that make it fast and easy to connect applications and different sources of data. Legacy technology requiring teams of developers to handcraft integration software on an as-needed basis is no way to address today’s rapidly expanding universe of cloud applications.

Companies undergoing a merger or acquisition need to find a fast and easy way to integrate data and applications. They need a single platform that users can rapidly connect diverse systems and applications at their vulnerable intersection points, narrowing the window of opportunity for hackers to attack.

By ensuring data transfers are closely managed so they can flow at enterprise speed, the pace of post-transaction integrations is accelerated. In turn, this assists dealmakers to realise the perceived value of the merger or acquisition at a much quicker rate—adding up into a rare win, win, win.

Jumping into a big company merger can be daunting, and while legal and financial steps take place, actual company operations, staff and systems are also a massive part of the merger. Here Ian Currie, ‎Director of EMEA business development, Dell Boomi walks Finance Monthly through some key considerations to make in the internal merger process.

Merger and acquisition (M&A) activity is booming. One thing is for certain there are a number of considerations business leaders need to take before embarking on a merger or acquisition. In particular, in the current political and economic climate, it is critical for investors to analyse all aspects of the company in question – from its value to customers, its business model and growth plans, all the way through to its existing IT infrastructure.

Digital or die

In today’s digital age, ensuring that IT not only works, but enables and drives business performance has never been more important in a merger or acquisition. A slick, digital-first approach ultimately sets one company apart from the competition.

Failure to get digital right can have a disastrous impact for any company. New players in the industry have been designed with a ‘data-first’ approach and are agile and flexible enough to meet customer expectations. An inability for legacy businesses to digitally transform and adapt at speed - or at least faster than the competition - is, therefore, one of the main reasons businesses fail. In fact, two-thirds of executives predicting that 200 Fortune 500 companies will no longer exist in 10 years’ time due to digital disruption.

With this in mind, and as the world becomes increasingly reliant on the digital economy, it is clear that IT should not be an after-thought when considering an acquisition.

However, with some many apps across an organisation and with huge amounts of data sitting in various siloed systems, IT in M&A can be incredibly challenging. Coupling this with the size, scale and complexity of any takeover or merger, how can businesses ensure they are set up for success?

Merging not displacing

Following the completion of a merger, a company’s CEO will typically request the CIO to just ‘combine the IT systems’. This often involves a painfully long procedure in which all data, applications and systems are forced into the incumbents systems. By not necessarily taking into account the complexity and hurdles that must be overcome, these efforts often result in wasted time, lost efficiency and reduced performance.

What’s more, making this change also typically forces the acquired company to alter its business model, potentially altering the aspects of the business that made it such an attractive proposition in the first place. This mindset of one company, essentially, displacing another must change.

A merger shouldn’t be the prerequisite to changing how a business works - after all, they wouldn’t be making the acquisition if the business model needed change. Businesses, therefore, need to consider what each company can bring to the party. For example, while a firm can buy the incumbent’s immediate revenue, it cannot maintain and strengthen its existing customer relationships without real-time, accurate and intuitive business intelligence to ensure its communications with customers and prospects are contextually relevant.

By having a clear understanding of the digital landscape, executives can make smart decisions for new models of working, whereby IT can enhance operations rather than hindering them.

Integration is integral

Making an acquisition should enable firms to ‘buy’ immediate revenue and customer opportunities, but without the aid of business intelligence, companies may struggle to build on, or even, maintain customer relationships. After all, it is widely accepted that the easiest way to grow a company is to cross-sell and upsell to its existing customer base.

However, with customer data in silos, organisations cannot keep track of what information their teams are putting in front of them and how the relationship is being maintained. Without this knowledge, relationships can be weakened or even finalised. With dedicated technology to integrate data, apps and systems quickly and efficiently, companies can quickly regain control, ensuring all the dots are joined up.

Integration solutions prove invaluable here. They provide a fast and flexible user experience, centralising the creation, maintenance and updating of integrations through simple drag-and-drop interfaces that eliminate the need for coding - bringing both sets of date, apps and systems together at speed and with ease.

Only by ensuring processes, applications and data can be integrated quickly and effectively can companies truly benefit from their newly merged firms. If the predictions are correct and more companies look to merge in the coming months, it will be critical for businesses to look to integration solution to join the dots and set themselves up for success.