Standardised IT integration for M&A success

Political and economic uncertainty has contributed to the UK social housing sector undergoing significant consolidation during recent years. A large number of mergers and acquisitions have taken place in an attempt to save costs and create efficiencies.

A great deal has already been written about the role that IT plays in housing M&As. The main driver for sector consolidation is cost, and digital transformation is a key enabler of the organisational change needed to realise the benefits. So much cost is locked into archaic and complex technology that doesn’t serve the needs of organisations. Housing providers that manage to capitalise on the opportunity that a great technology infrastructure can provide are likely to be able to demonstrate real added value and excellent user experiences in the enlarged organisation, as well as much greater operational efficiency.

However, the real opportunity is going about transformation in a way that unlocks the power of your people. Technology can be the catalyst for that, but not in its current guise. So if an organisation embarks on a roll-up strategy, unlocking this in their own organisation first is vital and then of course it’s an opportunity to set this as the objective for each subsequent integration.

 Get your house in order

Furthermore, while social housing has its own challenges, I believe the general principles for M&A IT optimisation apply. Managing disparate technologies is hard and a failure to integrate and optimise IT presents a risk to the success of current and future M&A deals. In short, one needs one’s own house in order before adding further complexity and risk to it! It is vital to develop a highly effective and repeatable technology approach which integrates acquisitions efficiently and innovatively. Plans must also help accelerate and deliver insight-led business growth and be focused and collaborative throughout. An inspirational vision that galvanises the organisation into action is essential. 

The critical steps and deliverables are: 

• Clarity of purpose – what is the joined organisation trying to achieve;
• Discovery of current technologies and processes;
• Lifecycle/mapping of pain points;
• Combined process and solution design;
• Programme resource planning;
• IT integration toolkit.  

Stakeholders from the IT department should be involved from the pre-deal stage onwards and become a permanent part of a multi-disciplinary M&A team, providing insight and advice as well as the capability to implement the IT integration toolkit.

Involve IT early…

In cases where IT isn’t included in the initial M&A conversations and a standardised approach isn’t available or adhered to, integration plans are often rushed, badly implemented and/or mean functioning as two organisations under the same logo, never achieving the intended economies of scale. Furthermore, the complexity, time and cost involved in the IT integration activities are likely to be underestimated, resulting in delays, budget overruns and SLAs not being met. A merger or acquisition presents an ideal opportunity to look at the housing provider’s overall IT strategy and health; one of our clients, Housing Plus Group, decided to disaggregate to an agile multi-vendor delivery model in order to improve tenant services and be better prepared for future growth. Other improvements that help enhance user experiences and drive economies of scale in an enlarged organisation include automation, self-service and strong data management solutions. 

M&A teams must continually improve IT integration capabilities by establishing consistent, repeatable processes that can reduce setup time, assist with capacity planning and reduce ongoing operational costs, while capturing best practice and incorporating the lessons learned from each acquisition. 

A standardised approach

Using a standardised approach or blueprint brings a multitude of benefits:

• Ability to realise full acquisition value;
• Faster, less disruptive integration of the acquired housing providers;
• Higher levels of staff retention;
• Coordinated and efficient central and local integration activity;
• Confidence to pursue more diverse acquisition opportunities;
• Continuous development of integration expertise;
• A consistently high level of service for end-users 

Crucially, in order to fully realise the synergies of the M&A activity, IT integration plans have to be aligned with the enlarged association’s unique goals and shared vision.

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