September 4, 2019 at 10:38 am #94135
In your opinion, what are the most prominent post-merger integration challenges for technology companies, and what would you suggest as solutions to these?September 5, 2019 at 2:27 am #94199
Josh Liang Wee OoiParticipant
In my view one of the large challenges in integrating a tech acquisition is keeping the creative processes and R&D alive. I’ve seen cases where an acquirer determines (rightfully or wrongfully) that their way is better, or that their philosophy in development is the correct one with very little consideration for that of the target company. The issue then becomes a loss of creative power and possibly missing out on great developments that could occur otherwise. Of course, going down the wrong path could also be devastating for the acquirer, so there is a fine line to walk. In the end, culture and philosophy are key here. A sincere attempt at trying to capture the best of both worlds is needed. And more importantly identifying the right level of people and talent to facilitate the process from the start is needed.September 10, 2019 at 9:34 pm #94704
To complement the previous reply, I’d say one big challenge I have seen relates to the fact that tech environments by nature are in a state of constant change, of iterative development…agile methodologies are great but for integration purposes it means one will be jumping onto a moving train. The timing of certain integration efforts therefore becomes an issue, along with often experiencing greater resource demands.October 8, 2019 at 10:18 pm #96532
In considering your question, I would need to separate “technology companies” into two general groups. One being a mature, established company that has established products/markets, policies and procedures, etc. The other being a company more in the start-up phase. In the later, the company value is typically tied to a few key individuals that are the technology drivers/experts and thrive on leading edge challenges and not interested on the details of running a company. The challenge here as the acquire is to allow them to continue to create and not get bogged down in administrative type demands. For many of these types, money/pay is not the primary motivator.
In the former, the integration process challenge as the acquire, is to balance quickly meeting the financial targets normally communicated to the market as part of the reason for the M&A, while not moving too fast with changes that cause concern or fear in employees. An area that I am focusing is corporate culture clash, which needs to be taken seriously by the acquire’s management, since is has been shown to be a major cause of M&A failures.
You must be logged in to reply to this topic.