From the IT perspective, mergers, buy-outs, take-overs and even IPOs are fraught with potential peril. Business synergies and balance sheets never tell the full story of a company and IT can be a major factor in efficient post-merger integration.
Architecture can create major expense and headaches for IT. Take two manufacturing companies that both have the same networking environment. Connecting these systems together into one domain will still be a major undertaking, and may even be impossible. If older equipment or production line is part of the same addressing schema as the business, and systems are integrated into CRM or ERP systems, major disruptions can result. The IT challenges of moving everyone to a “new” or “shared” system can be overwhelming, and potentially impossible for technical reasons.
Most IT resources and IT managers take pride in network infrastructure and a clash of ideologies and personalities could manifest in a lack of cooperation, infighting, and finger pointing. Contributing to these complications is the potential for confusion on who is supporting what, reporting chain and who can make financial decisions quickly and efficiently.
Large liabilities can lurk, so here are key areas to scrutinize:
1. Examine software licenses carefully
Large liability can result from software licensing. If one company hasn’t been honest about a license count, or has unlicensed software, resolution can be an expensive endeavor. Some companies have tiers based on number of users; if the number of users suddenly climbs, support contracts will increase and per-seat costs escalate. If these “white lies” later come to light, it will be expensive to purchase those Adobe and Auto Cad licenses in a retroactive and punitive situation.
Microsoft Small Business Server also has limits on user and machine connections, in some cases, more users or workstations won’t be added to the network.
2. Old hardware and software
Certainly the age and capabilities of the network, servers and workstation infrastructure are large considerations and a detailed inventory should be conducted. If two medium businesses are going to suddenly find themselves joined together and one (or both) of the business have infrastructure deficits, consideration needs to be given to the combined storage, backup and processing capacity required for the combined business operations. Even getting rid of old workstations or outdated servers has a cost associated with proper e-waste disposal.
3. Examine capacity
A generic word to denote the scrutiny required for the IT systems foundation. If the business(s) are moving into an existing space, or a new space, all the foundational systems need to be examined. All IT needs to be analyzed. Moving more servers or workstations onto a less adequately provisioned environment will result in expense and downtime. Having to call in an Electrician or HVAC specialist last minute for a retrofitted solution is not cost-effective.
4. Compliance documents & certifications
If one business has achieved PCI DSS or SOX compliance it doesn’t magically include the new business entity. Some leeway may be granted while the transition is in process but a new audit or compliance inspection is required. The sudden arrival of minimally protected Personally Identifiable Information in business systems, combined revenue above $75 Million, or processing a greater number of Credit Card/Payment Card transactions may require a more rigorous audit. No one wants a data breach or IT security incident during transition.
The list is not exhaustive and each business entity is unique. Use of outside consultants who specialize in IT audits and/or system integration is strongly advised. Between cloud services, an extensive network of IT service providers, the potential for unanticipated expenses in the IT portfolio of services could be extreme.