A recession is the perfect time for many businesses to optimize their M&A machines. Why? Because recessions are often periods where winning companies continue to grow by eating up competitors and becoming even stronger. So, how do you optimize an M&A machine during a recession (or even outside of it) to become more capable?
#1. Determine your organization’s technology horizon plan
The first question for M&A is, “what are you intaking M&A into?” The most frequent mistake I see companies make is to lack intentionality around their own technology strategy and missing the opportunity to align that with M&A. A clear understanding of where you want the organization to be in 3 years (not 5 years) is critical to the M&A strategy. A few things that might be on your horizon plan:
- Migrating all endpoints to cloud-managed in the next 3 years
- Migrating most datacenter services to the cloud in the next three years
- Fully implementing a Zero Trust network design
- Migrating off a legacy ERP platform
Understanding these directional assumptions lets us progress into #2 and design our technical strategy.
#2. Determine a M&A-specific technical strategy
The second question is to understand the key tools and approaches you use in your M&A strategy proactively to when it happens. This is especially true when aligned to your horizon plan. For example, if your goal is to get all PCs to Cloud Only, your M&A strategy should align to that goal, not just intake PCs into the legacy model. The best companies at M&A always use the intake process to optimize the estate, they don’t just move it into the basement and deal with it later. A few examples:
- Migrated virtual machines move into the cloud and are micro-segmented
- Migrated users/devices move to cloud-managed without VPN
- Migrated ERP platform to modern estate
Each of these choices move your company closer to the Horizon and have a small incremental cost vs. lifting the existing estate “as-is”.
#3. The M&A t-shirt size
The best M&A machines are organized around sizes of migrations. They are NOT created equal. A small acquisition you might just intake the users into your destination state vs. migrate them. Larger projects or even “mergers” you need to take a different approach. The best companies have aligned on these strategies, the tools, and approaches ahead of the game. The typical sizes of migrations include:
- Very small (treat like new employees)
- Small (treat like new employees – move some content)
- Medium (migrate some components, deliver new devices for many)
- Large (usually treat like full migration effort with modernization baked in)
#4. Have you established a process for easy migrations
As in the “t-shirt size” exercise, establish a clear process for small migrations. For most, you are likely just setting them up as new employees in your existing organization. This is instead of doing an actual migration project. This should directly mirror how you setup new employees, with perhaps a few work-arounds to bring some data or applications needed by the originating organization. In a sense, you’d treat these applications like new apps for the business, not as migrated apps.
#5. Establish a process for complex migrations
The process for complex migrations or “mergers” is where the rubber hits the road. These have a lot of moving parts and require actually migrating users, applications, content, and servers. The complex migration is where you have the following to worry about:
- Applications (on-premise and SaaS)
- End User Computing
- Data Estate
#6. Build a toolset, not a bunch of documents
The mistake many companies make when they build their M&A strategy is they simply try to take documents from one project and store them for the future. The problem is that the learnings are difficult to transfer by just using documents. We’ve found more success by building repeatable tools which incorporate project plan, planning, documents, guides, videos, etc. The tool should automate as much of the process as possible and especially capture the key learnings, assessments, etc. We’ve used tools like Power Apps to quickly create this capability.
#7. Understand the third party tools you use and evolution of the platform
The M&A ecosystem is quickly advancing due to the way the cloud is enabling technology integration. In some cases we’re using third party tools to migrate content (email, documents, collaboration, servers, etc.) and facilitate the consolidation of two businesses. Companies like Microsoft are starting to build the integration capabilities into the platform, such as cross-platform identity integration. We may get to a point where “tenant integration” is an acceptable alternative to migration in some cases.