M&A Tech Integration: Why 70% Fail and How to Be in the 30%

M&A deal closed. Now the hard part: integrating technology. 70% of integrations fail. Here is how to succeed:

## Why Integrations Fail

1. **Unrealistic timelines** (60% of failures)
- "Integrate everything in 90 days"
- Reality: Complex integration takes 12-18 months

2. **Underestimating dependencies** (55%)
- "Just migrate the data"
- Reality: 50+ system dependencies nobody documented

3. **Poor change management** (50%)
- "IT will handle it"
- Reality: User adoption determines success

4. **Key person departures** (45%)
- "The team will stay"
- Reality: 30-40% attrition post-acquisition typical

5. **Hidden costs** (40%)
- "Use their existing licenses"
- Reality: $2M in licensing violations discovered

## The Integration Playbook

**Day 1-30: Stabilize**
- No changes to production systems
- Secure all access and credentials
- Inventory all systems and dependencies
- Identify and retain key personnel
- Quick wins: Email integration, directory services

**Day 31-90: Plan**
- Detailed integration roadmap (12-18 months)
- System-by-system migration strategy
- Data mapping and cleansing requirements
- Training and change management plan
- Cost model (fully loaded, with contingency)

**Day 91-180: Execute Wave 1**
- Non-critical systems first
- Pilot with small user groups
- Measure success metrics
- Document lessons learned
- Build confidence for complex migrations

**Month 7-12: Execute Wave 2**
- Core business systems
- Larger user populations
- Intensive change management
- Performance monitoring

**Month 13-18: Complete & Optimize**
- Final system migrations
- Decommission legacy infrastructure
- Optimize combined environment
- Realize synergies

## The Integration Decision Matrix

For each system, choose:

**Integrate** (combine into single platform)
- Best for: Core business apps (ERP, CRM)
- Complexity: High
- Value: High long-term

**Coexist** (keep separate, connect via API)
- Best for: Specialized tools, recent investments
- Complexity: Medium
- Value: Medium, faster time-to-value

**Retire** (decommission and migrate)
- Best for: Redundant systems, end-of-life platforms
- Complexity: Low-Medium
- Value: Cost savings

**Replace** (both systems to new platform)
- Best for: Both outdated, opportunity to modernize
- Complexity: High
- Value: High if done right

## Real Case: $150M Manufacturing Acquisition

**Integration Scope**: 287 applications, 1,200 employees, 4 data centers

**18-Month Plan**:
- Month 1-3: Stabilization, email/collaboration integration
- Month 4-9: Non-production systems, data warehouse consolidation
- Month 10-15: ERP integration (most complex)
- Month 16-18: Final systems, data center decommission

**Results**:
- Zero major outages
- 12% employee attrition (industry average 30-40%)
- $2.8M annual cost synergies realized
- Integration completed on-time, 5% under budget

**Success factors**:
- Realistic timeline (18 months vs. "90 day" pressure)
- Retained key personnel with incentives
- Intensive change management
- Executive sponsorship

The integrations that succeed are those that respect complexity and manage change.