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What are the Biggest M&A Challenges Facing IT Teams Today?

Jiong Liu
Senior Product Marketing Manager at Okta

Companies today are constantly looking for ways to transform. The demands are higher than ever to outpace competitors, reach new customers, and respond to changing market demands. The result is that market share and synergy are no longer the sole drivers of M&As. In a survey of IT decision makers from companies with 1,000–10,000 employees across North America, acquiring technologies was the number one strategic M&A goal.Figure 1: The top strategic M&A goals for organizations in the next 12 months

This undoubtedly impacts IT teams, presenting a new and unique set of challenges. To better understand the implication of this, we spoke to 145 directors, VPs and CIOs in 13 different industries (including IT, healthcare, industrials, telco, and retail, to name just a few). Here are the trends in IT we see in the M&A landscape today:

Figure 2: The average time required for IT to complete their portion of an M&A transition

Given the complexity of combining technology stacks during the M&A process, over 80% of respondents reported that it takes more than three months to complete the IT integration phase of an M&A. This results in a delayed time-to-market for new technologies and geographies. Such hold ups can negatively impact user experience, when the risk of employee, partner, and customer churn is at an all-time high. This also delays realizing the operational cost reduction that was a key driver of the M&A decision in the first place.

Figure 3: The top identity and security challenges faced during M&As

Our survey results showed that there isn’t just one root cause of these challenges – the impacts are felt across teams. Demands on CIOs and IT leaders grow as more companies become technology-led companies facing a range of identity and security concerns. The most commonly reported challenge during an M&A is ensuring tech flexibility across business units. Multiple companies (and even multiple departments within them) have their own tools and processes. This means IT teams are faced with acquiring and consolidating a huge range of technology, all while aligning local IT operations with head office IT. They also need to ensure all business units can leverage best-of-breed tools – immediately, and with the right levels of access – to effectively do their jobs.

 

Figure 4: The more appealing value propositions for identity & access management as a service

Of course, we can’t ask about challenges if we don’t also explore solutions. The most sought-after IAM value prop for M&As is highly-available, scalable cloud infrastructure. With this in place, the integration process for IT is repeatable. M&As become fast, secure, and non-disruptive for end users. 

This is where Okta comes in, providing a centralized identity management system that integrates users across different organizations. Okta was born in the cloud, so the availability and scalability that companies look for during M&As is built right into its solutions. The Okta Integration Network includes over 5,000 pre-built integrations for connecting to applications, directories, devices and infrastructure, which give employees, partners, and customers day one access. Okta also provides a central repository of identities from any number of directories or domains, whether on-prem apps, AD/LDAP, or even HR software, centralizing all of this user data for IT teams. As this data is migrated, it can be standardized as well, so IT teams have a single source of truth for all identity needs. 

To learn more, download our solution brief on achieving agility for Mergers and Acquisitions.

This need for a single vantage point across all IT activity was also flagged as a critical security concern for companies during M&As (see figure 3). Cyberattacks are becoming more common during M&A integrations, when companies are at the mercy of their weakest link, hampered by a lack of visibility into who’s accessing what. Okta provides a centralized view into all authentication data across domains and directories and provides real-time reporting, allowing companies to see suspicious behavior as soon as it happens. 

Repeatable, efficient M&As are possible with the right identity partner: Broadcom spends 50% less time integrating directories, and gets new employees up and running 30% faster than previously. Envision has acquired 20 companies in just two years, with seamless federation to newly acquired hospitals. ENGIE has consolidated 100+ AD domains into 1 Global Address List for Office365. With Okta, IT teams can focus on the bigger picture – boosting innovation and long-term value creation as a result of M&As – while knowing the details are taken care of by a partner they can trust. 

Learn more about how Okta can increase your M&A agility – quickly, securely, and without disruptions.

 
Jiong Liu
Senior Product Marketing Manager at Okta

Jiong Liu is a Senior Product Marketing Manager at Okta, leading strategy, content and tools for the Business Value program. Jiong has over 10 years of experience in finance and helping customers realize maximum potential from their investments. Jiong holds bachelor’s degrees in Economics and Interdisciplinary Studies from the University of California, Berkeley and a MBA from the University of Pennsylvania, Wharton School.

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