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Merger Missteps: Why Partners Must Defy 'Rip and Replace' Mindset

Partners play a key role in enabling a structured and incremental approach to streamlining post-merger IT processes.

October 26, 2017

4 Min Read
Misstep

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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 …

… cloud-based, they’re actually primed for a more streamlined approach.

3 Steps for Channel Partners

When it comes to creating a united IT environment following a merger or acquisition, partners should help customers follow a strategic and gradual approach to streamline IT processes. Here are some key strategies:

  • Help craft a structured migration model: Take a consultative approach and show customers how to create a strategy centered around their business priorities and capabilities. Instead of encouraging post-M&A clients to scrap existing systems – no matter how profitable that might be – work to identify what is working, triage what’s not and prioritize changes. Helping to execute a structured approach to merging data infrastructures – one that incrementally unifies the merged solutions based on feasibility and immediate need and avoids the “Frankenstein syndrome” – may not boost your margins in the short term, but it will establish you as a true partner who puts the interests of the customer first.

  • Embrace the client/vendor translator role: Channel partners are in the unique position of knowing exactly how their customers interact with technology — and where they aspire to be down the road. This knowledge becomes pivotal following an M&A. You have a golden opportunity to maximize your role as a strategic intermediary between customers and their vendors.

  • Strategically outline a long-term vision for tech: Streamlining IT in a merging environment is all about the long game. Clients want a plan for technology that will support business-critical objectives not just in the immediate future, but also further down the line. Channel partners can help their clients to realize long-term cloud migration success by setting strategic parameters for what a solution needs to accomplish.

Companies approaching M&A face many consolidation-related challenges. Traditionally, they viewed IT integration as just another one on that long list. But both the rip-and-replace mindset and the fear of an inefficient mishmash of systems are rooted in the out-of-date IT model of fully on-premises rather than mostly cloud-based assets. Take this opportunity to be that trusted adviser. It’ll pay off.

Kim McLachlan is senior vice president of sales for West Unified Communications Services‘  voice, network and contact center lines of business. In this role, she drives revenue growth through a national network of resellers, VARs and a direct sales team. She leads West’s direct and channel sales teams for North America, building on her team’s success in driving adoption of West’s UC portfolio in the marketplace.

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