How to Use IT System Integration Planning to Increase Efficiency during Mergers and Acquisitions

How to Use IT System Integration Planning to Increase Efficiency during Mergers and Acquisitions

A large apparel business had just purchased another company. For the sake of confidentiality, let’s call the buyer LAB and the acquisition Apparel Lite. The CIO, Mark, needed to fold Apparel Lite’s technology needs into LAB’s infrastructure as efficiently as possible.

To merge IT resources successfully, he had to determine what technology LAB and Apparel Lite had as well as their utilization levels. Fortunately, because he had been monitoring LAB’s IT environment for several years, he knew their configuration, performance, capacity, and growth trends of the IT environment.

Because Apparel Lite did not have a company-wide IT monitoring solution, however, their technology information was not readily available. Given his experience with multiple acquisitions, Mark suspected gathering the data manually would result in misinformation and gaps in the data.

So rather than spending weeks or months collecting data manually and creating a mass of spreadsheets, Mark asked the CIO at Apparel Lite to install Galileo.

So rather than spending weeks or months collecting data manually and creating a mass of spreadsheets, Mark asked the CIO at Apparel Lite to install Galileo, the same infrastructure monitoring solution he was using, to monitor their environment for 30 days. This period was long enough to create a snapshot of their technology configuration, performance, and utilization.

At the end of the month, he held a meeting with the IT leaders at Apparel Lite. He showed them a dashboard that provided high-level information on Apparel Lite’s IT infrastructure. He did the same for the parent company. Because the Apparel Lite’s team used the same tool Mark had employed to track their in-house technology operations, he was confident in an apples-to-apples comparison.

With detailed data on hand, John’s team could find answers to the following questions:

  • Does Apparel Lite have free space in their environment?
  • Do they own any equipment that’s newer than LAB’s that we should consolidate into our infrastructure?
  • Do they have excess capacity? (That’s always a good question. After all, the company may have been sold due to operational inefficiencies.)

Looking at the picture of the two businesses together, Mark’s team could decide whether to put their technology together or keep them separate. They could make trade-offs regarding which equipment to keep and which to retire.

After discovering Apparel Lite had some newer servers, Mark decided to bring those units in house to replace some of LAB’s technology that was nearing the end of its life. Since neither organization was running at full capacity, these servers could take care of the new, larger company. This consolidation enabled them to save on software, hardware, power, and personnel.

Mark’s team also drilled deeper and looked at applications. They found that Apparel Lite was using Oracle. Since LAB already had 25 Oracle servers, they wondered if they could absorb the combined workload. To find out, they used Galileo’s tagging feature. They created a tag, named it “Combined Oracle Servers” and virtually grouped the Oracle servers at LAB and Apparel Lite. In this way, without physically moving anything, they modeled what it would be like to have all the equipment together. They looked at capacity, CPU, memory, I/O and performance to determine their combined needs.

Mark’s team discovered that the parent company had newer, better storage. They had recently purchased storage devices to cover their growth over the next five years. So they decided to absorb Apparel Lite’s storage needs. Based on new projections of combined needs, they would now have to buy more storage in three years.

In all, they absorbed 40 percent of Apparel Lite’s IT infrastructure, meeting the acquisition goals of driving efficiencies and reducing costs.

After they had completed the system integration of the two companies, the IT department continued to monitor the combined IT infrastructure, using the same tool that helped them make their decisions. Using data, they determined whether the assumptions they had made based on growth were holding true, and made adjustments as necessary.

By using a methodical approach to IT system integration, Mark’s team made more accurate and informed decisions that led to greater efficiency. Over 15 years, by conducting this process again and again, and likely applying similar fact-based methodologies to other departments, LAB has grown from a company with $200 million in sales to one with $3.5 billion in sales.

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