Post-Merger IT Integration

Dave Smyth, Senior Programme Manager with Saros Consulting.

When a merger or acquisition takes place, organisations tend to focus on the big picture issues like finance, governance, boards of directors, management structures, and tangible assets. But areas like IT are often less thought of, and that’s a mistake. IT forms the backbone of every large business, supporting everything from communications, operations and supply chain to customer service and financial reporting – all of which are tied into a company’s reputation and future success.

If companies are to realise the full value of their merger or acquisition, seamless IT integration is vital. This means fusing the systems, technologies and infrastructure of both companies and aligning their IT resources, processes and software, to build a blended IT environment that operates efficiently. But, with so much resting on IT, there are many potential pitfalls and bottlenecks that can lead to significant issues. When systems that we never designed to work together struggle to integrate, it can lead to operational disruptions and customer dissatisfaction, or worse, the falling apart of a deal altogether. 

At the heart of many failed integrations is a lack of comprehensive IT planning during the pre-merger phase. This can lead to delays, increased costs, and unanticipated operational downtime—seriously impacting business continuity. Merging companies must approach IT integration as a critical factor in post-merger success, allocating sufficient resources and planning to avoid these pitfalls.

The Unforeseen Complexities of IT Integration

At a basic level, a merger is the combining of two corporate identities but there are layers of decisions that need to be made for this to happen seamlessly: security, processes, access, policies, data storage, compliance, customer service, change management, tech debt…. the list goes on. IT integration presents a unique set of challenges, and companies undergoing a merger or acquisition often underestimate both the time and the effort required. Below are some of the most common IT hurdles encountered:

1. Incompatible Systems

Often, companies rely on completely different platforms and technologies, which are not designed to communicate or function together. The integration of ERP systems, CRMs, and other operational software can be a complicated and resource-intensive process.

Take the operating systems for example. At first, a typical employee won’t be too concerned about which platform they are using, but when it comes to system consolidation – you could be switching from Google to Microsoft, for example – so much work needs to be done in the background. And when a company is using single sign on with access linked to an email address, then any change can be significant, and critical, when that email address is also changing. Managing the switch to different providers seamlessly and efficiently can be the difference between maintaining business continuity and disastrous loss of productivity, which today’s companies can ill afford. 

2. Legacy Technology

Integrating legacy systems into a modern IT infrastructure often presents unforeseen challenges in a merger or acquisition. For example, when one company operates on modern cloud-based systems and the other relies on older, on-premise technologies, compatibility becomes a major issue. Legacy systems may not be designed to integrate with cloud-based applications, requiring extensive customisation or middleware to enable communication between platforms.

This complexity is often compounded by outdated software that no longer receives vendor support, making it vulnerable to security risks and harder to update. Moreover, migrating data from legacy systems to the cloud can be time-consuming and error-prone, especially when dealing with different data formats or structures. These challenges lead to increased costs, longer timelines, and the potential for significant downtime during the transition.

3. Data Security and Compliance Risks

There is a lot on the line when it comes to data security and companies today go to great lengths to comply with regulations like GDPR. When two companies merge, data security policies and processes need to amalgamate too. The companies may have different policies and procedures for managing data security, but a unified approach needs to be determined, including how and where that data is stored whether it’s in the cloud, or on premise. Proper access controls are essential to safeguarding data integrity and in turn, protecting corporate identity.

4. Broken Customer Journeys

If not managed correctly, customer service can be one of the casualties of a merger. Most companies will typically have dedicated, multi-step customer service processes, a path that’s followed for every customer interaction. Large companies – like our client Primark for example – would have processes in place for almost every contingency, and these processes are consistent across the organisation. Customer service is intrinsically linked to company reputation, and so it’s vital, in a merger or acquisition environment, that this level of consistency is maintained. Be clear about the process and the path – from the initial engagement to lessons learnt that asks ‘how did we do?” and “how can we do it better?”. That initial call or email needs to go somewhere and be dealt with, so bed down these details early on and implement them in that post-merger phase.

Mitigating Risks through Early Due Diligence

Addressing these challenges – from incompatible systems to user experience – requires a methodical approach. Before integration begins, conducting thorough IT due diligence is critical. This helps identify potential roadblocks and allows for detailed, effective planning. Collaboration between IT and business stakeholders is key—both sides must work closely to align on goals and prioritise IT investments effectively. Leveraging impartial third-party evaluations can help provide a clear picture of what systems should stay, what needs to be upgraded, and how the transition will occur without unnecessary delays.

In any merger or acquisition a company will take on a certain level of tech debt. But there is a difference between known tech debt, where a company takes a calculated risk, and unknown tech debt, where the full consequences of a software vulnerability, for example, only become apparent further down the line. Effective due diligence will reveal tech debt, and companies should make informed decisions at that early stage in order to avoid costly situations. 

In some cases, larger companies acquiring younger start-ups may find that their legacy systems can’t support a full integration of the new company’s technology, and this is where a larger decision has to be made. Is a full integration necessary or beneficial, or should they only integrate some parts of the new company? Again, it’s about knowing this information up front and putting the right planning in place. 

Maintaining Business Continuity & Realising Synergies for Long-term Value

Maintaining business continuity is the central concern during any IT integration. One of the biggest risks is system downtime, which can halt operations, disrupt supply chains, and damage customer relationships. Robust planning and clear governance frameworks are crucial with with defined responsibilities assigned to IT teams from both entities . Identifying the most critical systems early on helps prioritise them during the integration phase, reducing the risk of business disruption. In situations where immediate integration is impractical, Transition Service Agreements (TSAs) can offer a temporary solution, ensuring that business operations continue while integration plans are finalised.

Effective change management is another cornerstone of successful IT integration. At Saros, we speak about change management regularly, it’s something we see every day in our work. And integrating two disparate IT systems needs effective change management. For example, one of our clients, Planet Payments, is expanding quickly by acquiring and integrating other companies. To absorb these companies seamlessly and to ensure continuity they place a lot of emphasis on regular training and questionnaires with front-line end users from an early stage. Its an effective way of embedding change into business as usual.

The true value of a successful post-merger IT integration goes beyond just ensuring business continuity however. IT integration can become a powerful enabler of synergy, unlocking long-term strategic value. By aligning IT platforms, standardising business processes, and integrating data across the organisation, companies can drive efficiency and collaboration. But IT integration can also foster innovation. By creating a unified environment, companies are better positioned to invest in new technologies, without the burden of managing conflicting legacy systems. These innovations not only drive operational improvements but also help the organisation remain competitive.

Post-merger IT integration is a critical step in ensuring a merger’s success. It involves more than just merging systems—it requires strategic planning, meticulous execution, and a focus on maintaining business continuity and mitigating risk while realising full synergy. Like any project, there can be what we call scope creep, where unexpected elements or situations occur outside of the initial project management environment. Often, the success of a project, in this case, a merger or acquisition, lies in how a company manages these unforeseen situations. 

At Saros Consulting, we understand the intricacies of post-merger IT integration and have witnessed the value that comprehensive due diligence and IT planning during the pre-merger phase can bring. Our experienced team can help your organisation ensure a seamless transition for maximum value.