When it comes to mergers and acquisitions, there’s no shortage of IT and cultural issues to overcome, all of which present a relatively equal – and significant – degree of difficulty.

That’s the key takeaway from a recent IDG Research survey of 50 IT professionals with companies of 500 employees or more who played a role in a merger, acquisition, spin-off, divestiture or related project within the past 5 years.

The good news is a majority of respondents didn’t consider any of the issues to be “very” or “extremely” challenging, although it was a slim majority in several instances, especially for IT issues. But the issues aren’t exactly straightforward, either. The bottom line: All integrations are challenging at least to some extent.

Assessing IT M&A Challenges

The two IT issues that garnered the most “extremely challenging” votes (18% each) were: “Estimating IT integration efforts, risks, and timelines” and “Properly assess the other company’s business processes.” Both were also assessed as “very challenging” by a fair number of respondents, 28% and 26%, respectively.

Two issues also tied, at 48%, for the greatest number of combined “extremely” and “very challenging” votes: “Streamline IT architecture and services” and “Rightsize and optimize assets.”

If the response of simply “challenging” is included along with “extremely” and “very,” every issue listed garnered more than 50% of responses. The remaining issues were:

  • Accurately assess the scalability of the IT
  • Determine how much integration is actually needed
  • Plan and budget
  • Rationalize the application portfolio

IDG Research also gave weighted scores for each challenge, coming up with a single number based on the percentage of respondents who selected each of five responses, ranging from “extremely” to “not” challenging. As figure 1 shows, there’s little differentiation between the scores for each issue, indicating all of the issues are challenging at some level.

Figure 1

“Any M&A or business unit spin-off presents numerous IT challenges and IT groups need to address all of them for the project to be successful,” notes Jeff Wilms, Vice President at Logicalis, which provides IT solutions and managed services. “The issues can be complicated, especially when dealing with two different IT groups, which is why companies often turn to a third party like us to help out.”

Respondents also found a bevy of human resource or cultural issues to be challenging, especially “manage employee morale,” which nearly three quarters said was at least “challenging.”

Here again, the weighted responses showed little difference in degree of difficulty in dealing with HR/cultural issues:

  • Create fair redundancy and powerful retention plans – 2.2
  • Manage employee morale – 2.2
  • Balancing staff skills and resources – 2.2
  • Train employees – 2.1
  • Align the different corporate cultures – 2.0
  • Communicate to stakeholders – 1.8

At the end of the day, however, 90% of respondents report their integration projects were either “generally” or “completely” successful.

“Logicalis clients likewise routinely see success with M&A and other integration projects,” Wilms said. “Our strategy for ensuring success revolves around Extensible IT, which delivers IT platforms that work together to create an open and flexible environment that can cross geographical and virtual boundaries.”

The idea behind Extensible IT is components snap together and allow for seamless management – exactly the kind of easy integration that M&A’s call for. To learn more, visit: https://www.logicalisusa.com/mergers-and-acquisitions/