3 Tips on How to Avoid a ‘Rip & Replace’ Post-M&A
M&A activity in the channel is heating up, and many experts agree that as traditional channel partners move toward retirement and larger vendors and solution providers look to acquire shops to supplement their offerings or expand their geographic reach, we’ll see a significant increase in acquisitions.
But as any IT professional who’s been through a merger or acquisition knows, it can be a nightmare trying to figure out how to integrate the various technologies and workplace collaboration tools each company uses. Kim McLachlan, VP of sales at West’s Unified Communication Services, says that many providers think a ‘rip and replace’ approach is necessary to create a cohesive environment—but that this strategy often comes with a major price tag and extensive timelines.
“By leveraging the two companies’ infrastructures and marrying existing data and tools under one unified communications and collaboration platform, channel providers can help clients save time and money,” McLachlan told The VAR Guy. “This approach not only establishes client trust, it also positions the provider as a long-term partner.”
McLachlan gave us three tips that help channel providers customers going through an M&A leverage their existing infrastructure while still consolidating their data and tools onto a single uniform system:
- Embrace a structured cloud-migration strategy. This idea of ripping and replacing all technology during an M&A is based on an older model, when technology was more sedentary and storage was primarily on-premises, not in the cloud. A rip and replace approach involves updating all technology at the same time, disrupting business processes and significantly increasing the risk of failure. What’s more, this approach often comes with a high, front-loaded price-tag. By going with a more structured cloud-based migration, companies give themselves more time to transition or update technology in waves instead of all at once, reducing inherent risks.
- Set project timelines. Depending on the needs of the client, it may be best to migrate tools to the cloud in stages or one office location at a time. This prevents business disruption and provides more time to teach employees how to use new tools. Channel providers must also work with the client to figure out which tools need to be prioritized for updates and which existing tools or infrastructure can be leveraged for a while longer. For example, one of the companies might have had new PBXs in place prior to the merger. In this case, it may make sense to squeeze as much value out of those investments as possible and to adopt a hybrid-cloud approach when updating the technology stack.
- Serve as the client’s translator. Most channel partners have a deep knowledge of the client’s past, present and future technology needs. Therefore, partners should serve as the translator between the client and the vendor, communicating the company’s needs, priorities and parameters for new technology throughout the entire process. Channel partners should also participate fully in new technology training to help ensure the end result is a success.
As IT strategy continues to become more a part of overarching conversations about business goals, partners that can offer guidance during the often chaotic transition after a merger or acquisition can show value beyond just the technology. And if you’re looking to be acquired yourself, showing that you have a strategy in place to make it easier to incorporate your shop into the new company culture just might be a selling point that tips the scales in your favor.