We recently worked with a client who acquired several different business operations in a period of about 16 months. In this case, the software for some mission-critical applications did not align. EPIC was called on to help with transitioning the acquired companies into working together as one to satisfy current employees, customers, and stakeholders. By building an application roadmap coupled with evaluating the potential costs and long-term outcomes, we were able to construct a proactive plan to assist the newly acquired businesses with smoothly transitioning their technological procedures to fit into the parent company’s overall productivity scale.
Software Challenges
Many businesses have experienced several operational software challenges soon after they acquired other companies. Many of these obstacles were linked to the fact that the software used across the board did not align — therefore causing seemingly minor, but frustrating, issues for both employees and customers. For instance, if one software service utilizes JavaScript and is set to interface with another using Microsoft services as a resource instead, a timely change is necessary.
Utilizing different software solutions can be confusing for customers and employees, which will cause a loss of revenue and a decline in customer satisfaction. Therefore, in our attempt to help our client, we established a transitional six-month timeline to resolve all software issues. Within these six months, we increased our team members’ involvement to address each impacted application and spend two to three months on each one individually. By re-evaluating and updating each software component to fit the company’s modernized standards, we were able to engineer all system processes to align. Also, we eliminated any unclear procedures. However, before beginning this process, we strategically analyzed the two-step factor as well as the potential costs and outcomes of each action in order to ensure each would prove beneficial to our client.
Costs
After a business identifies the challenges ahead, they then need to address the funding that will be needed to cover the costs. During this particular acquisition, in order for the software challenges to be resolved, the following internal business costs had to be considered first:
Application costs: In order to align the software across all the newly acquired companies, the new applications needed to be paid for in one bulk order. Since the business was essentially starting fresh, this was one of the bigger investments — but one with long-term benefits.
IT technicians: There is often a need to hire IT technicians to install and monitor all updates for a newly arranged company. These employees may then act as the new point of contact for questions during the transition.
Training: Adequate time to train all current employees on the updated software must be allocated. These employees are most likely familiar with the current software, so it may not be smooth sailing in the beginning.
The cost to remediate errors: The perfect software configuration does not happen overnight. Users may feel frustrated with slow-moving or crashing software, while employees may identify room for improvement after the initial launch. By allocating funds in anticipation of these obstacles, they can be addressed quickly.
Software licensing: When proceeding with software updates, a company needs to invest in new licensing. The use and distribution of the updates will vary, so acquiring the proper license is a must.
Beneficial Outcomes
While these larger out-of-pocket costs should be fully identified before aligning all software systems during a company acquisition, they will also generate long-term benefits. The following are a few possible positive outcomes a company can expect during a much-needed update:
Satisfied customers: Customers will now have modern software at their fingertips. Also, with the software being universal, they will be more likely to explore across the brand — creating an opportunity for higher profits.
Productivity increases: Properly aligned software will boost employee productivity, which will allow customers to see a direct benefit.
More opportunities to monetize: Modernized software allows room to build monetized features, creating a larger revenue stream for the company.
When managing the impact of an acquisition, it is essential to proactively develop a plan and analyze predicted outcomes in order to ensure a smooth transition between operations. After exploring the basic two-step factor in any brand acquisition, cost, and outcome, the company must ensure that both fulfill the prior needs of the business. If the outcomes do not meet or surpass the planned expenses, the proposed acquisition plan may not be the ideal strategic move to drive company growth at this time.