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Design principles - Mergers and Acquisitions Lens

Design principles

IT integration for mergers and acquisitions involves combining information technology (IT) systems and infrastructure of two or more companies to form a single, unified organization. There are several challenges that arise during this process, including handling different architectures, security protocols, governance models, and compliance requirements. Here are some of the common challenges that organizations face during IT integration for mergers and acquisitions:

  • Architecture differences: The IT systems of the merging companies may have different architectures, technologies, and platforms, which can make it difficult to integrate them seamlessly. This challenge requires careful planning and analysis to identify commonalities and differences between the systems and to develop a unified architecture that meets the needs of the combined organization.

  • Operational differences: The systems of the merging companies mostly likely have different operating processes and procedure. Creating synergy between buyer and seller company operations is a complex and time-consuming process. However, it is paramount to the integration success. They also need to consider the cultural challenges of merging two organizations, and have a plan in place to retain and attract the talent they need to succeed. Companies need to have a clear plan in place and acquisition the right resources to complete the integration successfully.

  • Security requirements: Each company has its own security protocols, policies, and practices that may not be compatible with those of the other company. This can create security vulnerabilities and risks that need to be addressed before and after the integration. It is essential to perform a thorough security assessment and develop a unified security strategy that aligns with the overall IT integration plan. Both companies should use security technologies that easily integrate with and complement each other. AWS is an established platform with many security features, but it's important for companies to understand how to use these features effectively. The M&A Lens helps customers by prescribing security best practices for securing AWS workload during mergers and acquisitions integration. 

  • Compliance requirements: Mergers and acquisitions often involve the integration of companies that operate in different industries or regions, each with its own specific compliance requirements. This can create a complex compliance landscape that needs to be addressed to avoid legal and financial penalties. It is essential to perform a thorough compliance assessment and develop a unified compliance strategy that meets the requirements of both companies and regulatory bodies.

  • Governance models: Companies may have different governance models for managing IT resources and decision-making processes. This can create conflicts and bottlenecks during the integration process, leading to delays and increased costs. It is important to establish a unified governance model that balances the needs and requirements of both companies and aligns with the overall business objectives.

  • Cost optimization: Companies need to carefully consider the cost implications of an acquisition, including the cost of integrating the two companies' businesses and the potential impact on their financial performance. The cost of integrating AWS environments can be significant, and companies need to make sure that they are not overspending on AWS services. The M&A Lens helps customers by prescribing best practices for cost optimization during and after integration. 

To handle these challenges, organizations often rely on a combination of technical solutions, process improvements, and cultural changes. One of the major strategies that organizations use to manage IT integration for mergers and acquisitions include conducting a thorough technical due diligence process to identify and assess the IT systems, infrastructure, security, and compliance posture of both companies. As part of technical due diligence, the M&A Lens drives technical integration depending on the following scenarios:

  • Scenario A: The buyer's workloads are running on AWS, and the seller is either on-premises or on a different cloud provider. In this case, the buyer is cloud-conscious and should initiate the technical integration with the seller based on the AWS Well-Architected Framework pillars.

  • Scenario B: Both the buyer and seller are running on AWS. In this case, it's beneficial to understand which company between buyer and seller is cloud native (for example, which is more advanced in their cloud adoption). In this case, the M&A Lens provides guidance on multi-account governance, reliability, security, and cost optimization. As both companies are well-versed in the AWS Cloud, the M&A Lens helps companies choose best practices for all Well-Architected Framework pillars.

  • Scenario C: The buyer is running on-premises and the seller is running on AWS. It is essential to promote AWS benefits to the buyer during integration. The seller is cloud-aware and should initiate the technical integration with the buyer based on AWS Well-Architected Framework pillars. It is critical to architect seller workloads per AWS best practices so that buyer can realize the value of AWS. This helps the buyer adopt AWS services for cost optimization and overall value.

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