Start guide: 3 steps for IT after a M&A event

By: Matt Corman

Mergers and acquisitions (M&A) in the high-tech sector are accelerating innovation and reshaping the competitive landscape.¹

However, many of these digital-native organizations struggle to unify their own technology estates after consolidation, resulting in redundant applications, siloed data and disparate systems that can hinder growth.

Setting up an efficient and secure IT environment following a merger or acquisition is far more complex than combining databases. To facilitate the transition and harness the full potential of shared technology resources, focus on these key steps:

Step 1: Get your data in order

When companies merge, they often combine data infrastructures and existing applications and systems, producing a fragmented IT environment that’s inefficient and ill-suited for expansion.

Older, inherited technology can cause data inconsistencies and create security gaps that expose the newly formed organization to potential cyberattacks. Meanwhile, duplicative software licenses and vendor contracts inflate IT budgets and divert resources from other areas.

You can address these post-merger issues by designing a comprehensive data strategy for the recently combined company. A clear, end-to-end view of your data environment allows you to:

• Tap into the combined strengths of previously separate datasets
• Generate insights that can drive product development and market strategies
• Enable more effective use of advanced technologies like AI and machine learning
• Streamline operations and improve decision-making across the organization

When creating a data ecosystem that optimizes the unified organization’s technology assets and joint intellectual property, it’s important to:

• Conduct a data audit. A thorough assessment of each company’s data and IT infrastructure can uncover system and application redundancies and security vulnerabilities. With this complete view of your organization’s data, you can determine system compatibility and identify inefficiencies like duplicate software that can be corrected to reduce costs and improve workflows.
  
  
• Implement a data governance framework. It’s essential to establish a structured set of rules, policies and processes that outline data quality, accessibility and compliance standards for the blended IT estate. This framework governs how data is collected, stored, managed and used across the enterprise.
  
  
• Incorporate AI and machine learning. You can enhance data cleansing and integration by deploying AIOps to anticipate challenges like redundant systems and capacity needs. This proactive approach saves time and money while allowing IT teams to adapt quickly to changing conditions.

Step 2: Review your technology partners and solutions

In a merger or acquisition, you’re not only uniting applications and platforms from two companies — you’re bringing together multiple technology partners and solutions. When evaluating relationships and vendor agreements, consider such questions as:

• Which partnerships and technologies are essential for growth?
• Where do we have technology overlaps that can be eliminated?
• Do we have gaps in our combined capabilities to address?

Bear in mind that the goal is to maximize the value of your post-merger technology ecosystem rather than simply reducing costs. You’ll want to:

• Customize your strategy. Learn as much as you can about your existing infrastructure and potential new platform environments, as well as how your employees use current technology. With a thorough understanding of your integrated IT environment, you can design a future roadmap tailored to your workforce.
  
  
• Explore growth opportunities. Business growth requires thinking beyond your current infrastructure. For example, we collaborated with a Scandinavian media group to migrate essential workloads to the cloud and create a new digital platform, enhancing flexibility, scalability and business growth.
  
  
• Plan for innovation. Before replacing or eliminating systems and applications, consider how combined functionalities may support future capabilities. For instance, upgrading to a next-generation network enabled automation and machine learning for a multinational media company. These capabilities allowed the company to more than double bandwidth, increase availability by 32% and slash latency by 40%.

If you lack the time, people or experience to navigate a post-merger technology transformation, you may need help from a third party. In these cases, a systems integrator can offer unbiased advice and help guide you through IT integration.

Step 3: Focus on your people

Technology lies at the heart of high-tech mergers and acquisitions, but employees are the lifeblood of every organization.

Regardless of the reasons for consolidation, leadership must strive to minimize disruption by supporting and engaging the workforce throughout the journey. To smooth the transition, you can:

• Develop a change management plan. Clear and consistent communication about what’s happening and why increases transparency and reduces anxiety. This is particularly crucial as businesses adopt emerging technologies like generative AI, which can create concerns about ethics and potential job displacement.
  
  
• Implement education and training. Programs that help employees learn and adapt to new systems and processes can turn potential resistance into productive engagement. When Kyndryl was implementing Copilot for Microsoft 365, we collaborated with Microsoft to offer extensive education, including role-specific training and ongoing support with a Center of Excellence. We also established a network of 5,000 Copilot champions to answer questions and share best practices.
  
  
• Blend values from both organizations. Creating opportunities to collaborate, innovate and build a shared vision for the future fosters an inclusive culture that can ease transition challenges. Spend time defining your company’s core values and principles and consider getting input from employees to involve them in the process.

The path forward

As the high-tech industry evolves through mergers and acquisitions, consolidated companies must take a holistic approach to technology integration. Organizations that prioritize both the technical and human elements of transformation can use their combined strengths to bring products to market faster and stay ahead of the competition.

Matt Corman is a Director and Customer Partner on Kyndryl’s Technology, Media and Telecommunications team.

^{1 MoFo survey: Tech M&A revival buoyed by market rally, lower financing costs and private equity dealmaking, Morrison Foerster, October 2024}