Is your merger or acquisition safe?
According to Forbes, M&A volume in 2021 was the highest on record — not only in the number of deals but in the dollar value per deal. And, nearly every business is currently managing more technology than at any previous point in its history. According to Spiceworks Ziff Davis, 88 percent of companies planned to either increase or maintain their technology spending in 2022.
With technology being a foundation of modern organizations, and mergers and acquisitions expected to grow in the years ahead, the impact enterprise architecture plays in ensuring post-merger integration activities run smoothly has become readily apparent to business leadership. As a discipline, enterprise architecture (EA) is equally dedicated to the worlds of IT and business. EA’s goals are to offer a holistic overview of an enterprise, one with every business capability mapped alongside its underpinning technologies, to lead rather than merely guide strategic transformations.
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Ways combining IT environments can ruin your business.
Mergers and acquisitions are enormous undertakings with countless moving parts, but a few overarching priorities stand above the rest. As they approach potential M&As, organizations should focus on these four key steps:
Develop a joint business capability map based on the corporate strategy
A core principle of enterprise architecture is understanding the baseline capabilities of a business, what an organization needs in order to perform its core functions. Business capability models must be built for each organization, and then combined to derive a joint business capability map.
Create full transparency of the new application landscape
Applications are the backbone of business capabilities. In this step, enterprise architects must create a 360-degree view of all applications to complete the picture of the current-state architecture.
After the information is centralized, EAs should analyze each application by their usage and cost metrics to have an even clearer picture. Business stakeholders should be brought into the fold via application evaluation surveys that evaluate the technical and functional fit of software running in the ecosystem.
Define the best way forward for each application
The time has come to determine how to merge the application landscape and create a target architecture. Teams must align to decide on the best course of action that most closely fits the corporate strategy — e.g., taking a “best of both worlds” vs. “align on major platforms” vs “winner takes all” approach.
It is at this point that a decision must be made with regard to the fate of existing applications. Application rationalization should be completed in stages, with a focused scope on what will yield the best results, for the most vital capabilities.
Develop application roadmap and track implementation
Rationalization activities are underway and EAs should begin tracking the burndown of the application portfolio. They are now responsible for executing the post-merger integration. This can be accomplished by examining the IT landscape at any point in time, past, present, or future, and observing changes.