Mergers & Acquisitions

Unraveling Complexity and Rationalizing the Combined IT Estate

Many mergers and acquisitions fail to deliver in full on their objectives. Synergies don’t happen, savings aren’t made, and rationalization doesn’t occur.

In trying to address this, boards of directors and chief executives have long focused on areas that they saw as the bigger prizes—headcount reductions and procurement savings. But in the search for bigger and better returns from mergers and acquisitions, attention is turning afresh to IT, and the realization of savings and efficiencies from the combined IT estate.

Some opportunities—and challenges—are obvious, others less so

For many businesses, the biggest challenge is establishing the facts that enable them to answer key questions and determine the appropriate strategies moving forward:

  • What hardware and software exists, where it is, and who is using it?
  • As IT systems are combined across the two organizations, will hardware provision keep pace with the number of additional users and the increased data volumes?
  • Where are the opportunities for consolidating, upgrading, and removing software?
  • Why buy new hardware or new software licenses if what is required is lying unused or under-used elsewhere in the combined organizations’ IT estate?
  • Is software licensing adequate and compliant?
  • Where there are multiple software packages with overlapping functions, which makes sense to standardize on?

Facts on the ground

Such questions are easy to ask, but much more difficult to answer. Paper-based audits take months, are costly in terms of effort and resources, and generally turn out to be unacceptably inaccurate. In a tightly-choreographed post-merger or acquisition timetable, something that takes months—and which is not only costly, but also inaccurate—is not something that any CIO or IT director can support.

The logical conclusion: interrogate the corporate IT estate itself, to get at the answers—quickly, accurately, and cost-effectively.

Asset Vision: Accurate Discovery, Analysis and Rationalization of Complex IT Estates

Discovery & Inventory: Understand the new IT landscape

Discovery is the foundation on what all activities should be planned. You can’t understand costs or plan a successful integration of technology without knowing what you have; hardware, the software running on that hardware, but also more complex areas such as cloud or databases.

Knowing all the software that is installed across the estate allows you to understand the scope of what you now have. Agentless discovery is an easy way to search your network to find and catalog all your hardware, cloud instances and software applications, and then normalize the data and present it in a consistent format that’s easy to search.

But finding things is just the start. Being able to identify, correctly name, and enrich which information such as retail price, end of life, or license type brings an amazing amount of knowledge to this previously hidden area.

Technical Analysis

Quickly securing accurate insights into hardware and cloud resources in use, together with data on software installed and SaaS applications, coupled with granular usage information, enables IT teams to make strategic decisions on refresh, migrations, and rationalization. Asset intelligence enable you to answer key questions and make informed decisions:

  • Are you going to standardize hardware? If you moved to a DaaS model, who could move straight away and who would still need devices to run more complex software?
  • When are the hardware warranties going to run out? Is that the trigger for an extra warranty cost or a refresh?
  • What if one of the companies had a Bring Your Own Device policy? How would you understand that?
  • Determine how much each company is spending on software and what type of cost it was — a one-off purchase or a subscription service.
  • Gain accurate granular usage data to understand who is using what software and when. Report on installations or usage, split by business unit, location, or company. Using the data and insights collected allows you to see what your license position is going to be.

Software Rationalization after M&A

As the merger and acquisition process takes place, significant savings can be quickly attained by taking a proactive approach to software portfolio rationalization based on an understanding of what software is available in the newly combined IT estate and to what extent it is used (under/over-utilization).

When performing a cost analysis to determine how to consolidate, upgrade, and retire software, follow these best practices:

  • Make savings as soon as possible by removing any software which isn’t being used and review low usage software to see if the product can be replaced with a free version.
  • Make an informed choice on the standard software to be used. This can improve operational efficiencies and productivity, but also allows you to take advantage of volume cost licensing.
  • Measure usage of standard software to ensure that migrations to new tooling are managed correctly and the business is realizing the full benefit.