Mergers and acquisitions are proving crucial for financial services companies in today’s fast-moving and competitive landscape. From wanting to scale and enter new markets to obtaining unique intellectual property or technical capability, it’s clear why businesses in this highly competitive sector want to pursue M&As.
In a recent survey by BankDirector, 44% of independent directors, chief executive officers and other senior executives of U.S. banks say they expect to acquire a bank in 2020.
In the face of the enthusiasm over M&As, there is some apprehension. In the same study by BankDirector, respondents named integration as one of the top concerns related to acquisitions in today’s environment.
You might have asked yourself, can my business assess and integrate new companies successfully?
Which brings us onto the strategic value of IT during M&As. To fully realize the value potential, financial services must create a well-planned strategy for IT integration. And reviewing consolidation efforts internally is a must.
Below, we’ve outlined 3 key IT consolidation steps for financial services before, during, and after M&As.
1. Consolidate internally
Integration and consolidation should start at home. The more consolidated your infrastructure, the easier M&As are, and the more streamlined the consolidation of technology with your new acquisition or merger will be.
We previously discussed the advantages of consolidating key facilities like data centers. For example, consolidating physical resources can cut your overhead, operational, and energy costs, so consider doing more with less hardware. To grow these benefits, many IT and business leaders utilize a hybrid IT approach, which includes a variation of colocation, cloud computing, edge computing or on-premise. This strategy allows for businesses to be more agile, drive efficiency and control where equipment and information is stored.
To design and manage this next-generation data center, you will need to acquire the required expertise or find a service provider who can do it for you. It’s important to understand the integral role that the physical infrastructure plays in the success of your consolidation program. A converged network architecture that simplifies, accelerates, and utilizes resources is a must-have for a successful data center consolidation strategy. This could include fast, Fiber Channel or iSCSI networks to connect servers and storage, plus network and storage virtualization.
For example, the Cisco and Panduit fiber optic infrastructure can help you create a solution that supports future bandwidth realities of 100Gbps and beyond. This ensures your organization is ready for increasing speeds for years to come.
Panduit can help you with this. With our extensive physical infrastructure solution stack and intelligent software solutions to manage and monitor any on-premise or off-premise solution, Panduit can reduce overall risk, improve energy efficiency, and increase uptime. Panduit also offers various consultative services which can help reduce time and develop a best fit design which is scalable, robust, and adapts to future growth. We have the experience to work with contractors and partners to ensure a smooth consolidation journey.
2. Conduct an audit: Integration and inclusion of technology and operational departments
Consolidating your existing infrastructure makes M&As easier, but there’s still a lot of work to be done to integrate with a new merger or acquisition. So, the first port of call should be to audit both yours and the new business’ IT infrastructure. The audit should answer the following questions:
- Is consolidation required for the new business?
- Have they done any consolidation to date?
- How will the existing consolidation efforts fit in with ours?
- Are there are risks with consolidating, and if so, how do we mitigate these?
3. Build an independent technology roadmap
Once due diligence is completed, the real groundwork of the integration starts. Consolidations will depend on your current company and the one you’re acquiring but building an independent technology roadmap is a must. A thorough technology roadmap will ensure that all building features are accounted for, like access control for buildings, monitoring/management of security systems, creating automation systems and more. Your roadmap should include a timeline, which means you’ll have to decide which systems are crucial to consolidate immediately, payroll for example, and prioritize the remaining accordingly. This way, the new company can operate from day one and you can focus on the other systems over time.
Whatever your reasons for pursuing M&As, by considering the integration of technology and operations early on, you are more likely to succeed.
Discover how Panduit can help your business seamlessly implement your IT infrastructure consolidation plan to get one step closer to realizing the full potential of M&As. To find out more or get in touch, visit our consolidation page.