Mergers and Acquisitions have been important tools for enterprises looking to grow quickly for many years. However, the rapid change brought on by a merger or acquisition can cause havoc for enterprise architects trying to maintain consistency across multiple organizations. But that doesn’t mean that enterprise architecture has no role to play in mergers and acquisitions.
Establishing a solid understanding of architecture is a critical first step ahead of moving towards a shared service model which would reduce complexity. This blog will briefly discuss key considerations for architects, but for a more in-depth case study, Orbus Software will be sponsoring a talk at the IRM-UK Enterprise Architecture Conference Europe by Kevin Norman, the Enterprise Architecture Director at Weir Group PLC. Kevin will discuss how Weir Group has grown through M&A, and how the architecture team has dealt with this growth.
Deploying Architecture for M&A efforts
Enterprise architecture can provide a single source of truth in an otherwise chaotic landscape, helping to rationalize disparate data sources. Quickly establishing a coherent EA function is crucial in these situations, as often merging teams will utilize different methodologies, frameworks and languages, and/or possess different maturity levels, cultures and focus.
If you have a mature Architecture capability, then a logical step is to utilize the Architecture capability and use it to create a formal review and governance environment to support M&A activity. This involves having a central Architecture owner for both the Business and Technology Domains to co-ordinate Architecture activities with the Due Diligence and Integration teams.
From an M&A perspective, a key focus for the Architecture team is comparing all of the different platforms between your current and target environment and the current environment of the target entity. Addressing the Business Model, Applications, Data, Integration, Infrastructure, Technology Services, Security and Change Management inputs will enable a holistic view to be established and compared logically across all environments.
Case Study – Financial Services
A Financial Services company wanted to get bigger quickly with many consolidation opportunities available within the market at the right price. The bid team, made up of people across the Business and Technology Domains, were able to deploy a number of Architecture Reference models to position the target companies against their own capability and working with the CEO and CIO, identify what questions needed to be asked of the target companies.
Use of the models enabled a plotting of which companies would provide the best bang for the buck, which companies could support the longer term objectives and outcomes, which companies had the customer base, services, the technology platforms, the skill sets required, what integration issues existed and what bid price represented fair value. The company went on to acquire 23 companies over a 4.5 year period and achieve its business objectives of growth and scale.
When the Architecture function commands the attention of the CEO and Executive Team it brings to life the value that Architecture can deliver in supporting an organization’s business strategy. Architecture success factors for M&A include a mature EA function/framework, clear representation of your own organizational assets and acceptance by the CEO and Integration team of the value to be achieved from the Architecture tools.
If your Architecture teams can consolidate the Architecture views within your organization, achieve good governance outcomes and engage sponsors/stakeholders then using your Architecture strength will address many of the CEO growth, M&A and integration challenges they face.