Rethinking M&A integration strategies Disruption in the boardroom

By Sharon L. Sutherland | Nadia Woodhouse | EY

As corporate boards and senior management increasingly focus on countering technological disruption and seizing new routes to growth, M&A is considered a fast lane to innovation and expansion.

For M&A to be effective, demonstrating how the combination can become more than the sum of the parts is crucial. This relies on best-in-class M&A integration strategies that allow the combined entity to achieve its potential. It’s the board’s responsibility to ensure that M&A is successful, and post-merger integration is key to its success.

When assessing potential transactions, boards should focus management’s attention on five areas:

• Big data and analytics
  The ability of the organization to harness big data and analytics to enable more nimble and informed decisions about the newly integrated enterprise.
• The customer experience
  How the new organization embodies a seamless, omni-channel approach to engaging customers and meeting their digital expectations.
• Cloud computing 
  Evaluating the speed and cost benefits of cloud computing and whether as a result of M&A there is an opportunity to move enterprise resource planning and other computer systems to the cloud.
• Cybersecurity
  Assessing the new partner’s cyber vulnerabilities and using the opportunity to craft a shared approach to incident response.
• Culture integration
  Mitigating culture clash between traditional and high-tech companies by ensuring newly acquired management and board members have a seat at the table.

Many companies are investing significantly in M&A activity. It is critical to take advantage of digital technology and proactively address the challenges it brings, before and during the integration process.

By helping focus management on post-integration strategies, boards can position their organizations for continued success beyond the merger.

This article has been adapted from a white paper produced in association with Harvard Business Review Analytic Services.

Compliments of EY, a member of the EACCNY