Cords Cords Cords Cords
Tips & Tricks

How To Avoid the Top 3 Mistakes with Mergers and Acquisitions

How to avoid common M&A mistakes

By Jeremy Parker, Chief Operating Officer

Accelerate your M&A success by preventing these key mistakes.

Despite lingering concerns about economic stability, the drive for M&A is still strong. Recent PWC data shows 60% of corporate leaders are not planning to delay deals in 2023 to mitigate potential economic challenges and volatility.

With M&A often used as a cornerstone for advancing business growth, executives who strategically leverage M&A can significantly expand their footprint, elevate their products or solutions, and create stronger market value or differentiation – even during times of uncertainty.

However, executing a successful M&A deal requires extensive operational and technical planning. After completing four successful M&A deals in the last two years here at Jitterbit (and close to 30 in my professional career), I’m pulling back the curtain to reveal three common mistakes – and ways to avoid them – when building a comprehensive M&A strategy.

M&A mistake #1: not cleaning your room first

Were you ever told as a child to clean your room before having friends over? Well, you’re going to have to clean your room before pulling off a successful merger, too.

But in the context of M&A, cleaning your room means sifting through internal data, systems, and processes to improve efficiencies and standardize activities before bringing another company’s data, systems, and processes into the mix. Deloitte data confirms that more than 90% of both corporations and private equity firms believe that achieving desired M&A outcomes depends on “pulling transformation forward” – or in other words, focusing on digital transformation earlier in the process.

Despite this widespread understanding, only one-third of companies reported that they’re likely to conduct business transformation before dealmaking. In today’s world, building a strategy for digital transformation is fundamental for M&A success – and that starts with optimizing and standardizing your own digital systems and processes first. When doing so, here are some things to consider:

  • What applications are being used in each department? Is there an opportunity to consolidate systems?
  • How effective are your current tools and systems? What are workflows like for your teams?
  • Is your data accurate and up-to-date in a single source of truth? Or are data silos creating bottlenecks and misinformation?

Bottom line: cleaning your room usually becomes a necessity during the operational lift regardless, so getting a head start on this task helps you avoid critical delays or bottlenecks.

M&A mistake #2: lack of cultural consideration

Even the best brands and visions fall flat without passionate employees behind them. As such, it’s not surprising that culture can be one of the single biggest reasons for an M&A to fail. Successfully overcoming potential culture clashes, regional nuances, or even language barriers during the M&A process hinges upon a shared passion, dedication, and vision for success. The stakeholders who take time to understand how these differences could impact an M&A — and strategize accordingly – will ignite a stronger culture amongst their teams post-deal.

For instance, when Jitterbit acquired Wevo, Latin America’s first iPaaS provider, Jitterbit’s leadership flew to Brazil to ingratiate themselves in the culture, get a firsthand look at Wevo’s brand and company culture, and learn more about Wevo operates day-to-day. This helped us get a better understanding of how our teams would work together, identify gaps that would need immediate attention, and foster excitement and alignment to pass on to our respective teams.

Bottom line: if you aren’t genuine in your efforts to understand and immerse your cultures together, your teams will feel it, and the deal has a greater chance of falling short.

M&A mistake #3: poor integration preparation

M&A is never easy. But it gets even harder without the right technology needed to successfully integrate systems (and without taking away resources that drive daily operations). From an operational standpoint, integration can be a huge undertaking during an M&A, depending on deal size, number of applications, data complexity, etc. (Hint: this is where it helps to have a clean room).

Here’s the deal: when beginning to integrate systems during an M&A, a lot of companies get sold on a path of native, out-of-the-box (OOTB) integration functionalities from one SaaS platform to another – without really understanding how much customization they’ve done in those platforms. In reality, these OOTB connectors only connect OOTB fields to other OOTB fields. As soon as you make any kind of customization to suit your business needs – which is the standard for most modern companies – the OOTB integration doesn’t work.

Let’s take another look at Jitterbit’s acquisition of Wevo to see an example of this. Our support ticketing systems were housed in different applications, with each platform using different fields (like case commenting, adding files, etc.) to manage tickets. But due to all the customizations in each platform, and the added layer of complexity with multilingual fields and characters, the OOTB connector was not an option. By leveraging Jitterbit’s Harmony platform, we were able to push the customized data into our system to gain a unified, comprehensive view of our support tickets without losing any data or compromising its accuracy.

Bottom line: having a solid integration plan in place, and leveraging an iPaaS solution that streamlines and automates these integrations, greatly accelerate time-to-value for the modern merger.

Why mergers and acquisitions run smoother with Jitterbit’s integration solution

The strongest mergers not only incorporate strategies to avoid culture clashes or operational disasters, they also intrinsically align their visions to bring more value to the market as a united force than they could as separate entities (or as it’s commonly referred to, making 1+1=3).

Partnering with a modern iPaaS provider is one of the best ways to prevent process gaps, delays, and errors during the M&A integration process. Plus, Jitterbit’s unified integration platform automates workflows, eliminates data silos, and improves overall efficiencies, helping your teams work smarter, faster, and happier to create harmony, synergy, and success post-M&A.

Tune in to the J-Talk podcast to hear Jeremy discuss more tips for M&A success

Listen Now

Have questions? We are here to help.

Contact Us