Merger Missteps: Why Partners Must Defy ‘Rip and Replace’ Mindset

Kim McLachlan

By Kim McLachlan, SVP of sales at West Unified Communications Services

When it comes to technology during a merger or acquisition, companies typically follow one of two paths: The “rip and replace” model, where they dismantle existing IT infrastructure and start from scratch, or they keep disparate systems running in parallel, creating a Frankensteinian mashup of solutions.

Neither provides an optimal approach. I get the appeal of rip and replace. It can seem like a strategic way to circumvent the complexities that often arise when merging IT environments. But in practice, jettisoning existing IT operations, assets and capacity is a costly and time-consuming move.

Running parallel systems creates its own set of issues, including diminished productivity driven by unconnected systems, the need to maintain specialized support knowledge for multiple sets of gear, the training challenge — and of course the difficulty of keeping everything updated and secure. One missed patch can cause chaos.

There is, however, a third, more rational path that helps maximize the value of previous investments while integrating disparate systems into more unified whole. This hybrid model, where the client’s different IT infrastructures are integrated wherever possible, requires channel partners to take a careful and strategic approach on behalf of their customers.

It starts with advising customers early in the M&A process. Challenge the idea that completely replacing IT solutions is inevitable, even in organizations with outmoded IT environments that seem too inflexible to accommodate the change. That discussion should avoid the problem of customers going into M&A without budgeting for IT integrations. I have seen some companies that didn’t plan or budget for integrations at all. The expectation is that the merger or acquisition will happen and then – eventually – they’ll completely overhaul IT.

When arguing against that strategy (using the term loosely) you can cite several drawbacks to relying on this approach. The first is the impact it has on people and processes. When merging companies elect to spearhead a complete IT overhaul, they set themselves up for a protracted and usually painful process. And once an overhaul is underway, operations face an extended disruption — one that can quickly trickle down to employees and leave them unable to complete their work efficiently. Unplanned M&A can open the door to attackers. And, it’s costly: When you pair the human productivity losses of rip and replace with the significant preliminary costs of launching a new IT environment, it can quickly become a recipe for budgetary drain.

The second issue with rip and replace is that it’s not aligned with modern business infrastructure. As a strategy for IT structuring in M&A environments, rip and replace made sense when companies primarily used on-premises solutions. But the widespread move to the cloud – a fundamentally flexible and adaptive platform – has highlighted the outdated nature of totally overhauling IT. Because businesses’ IT functions are increasingly …