Mergers and acquisitions (M&A) activity in the accounting profession has been strong over the past year and all signs point to that trend continuing—especially if the Federal Reserve lowers interest rates in months. the next few.
Whether you’re on the buyer’s or seller’s end and whether the business is driven by a desire to grow your market share, develop your team, or provide a unique experience, you want both parties to work together. and the flood from the first day. But in the rush to merge services and offices, firm leaders often overlook the most important aspect of merging two firms: merging processes and technology.
Failure to address technology and processes early can stunt growth, create inefficiencies and negatively impact a firm’s culture.
Why combining technology and operations is important to achieving success or acquisition
Regardless of the services the firm provides or the clients it serves, all accounting firms need to be able to bill clients, communicate internally and externally and manage time and resources as a single unit. united. But despite their obvious importance, many firms are slow to integrate methods and technologies. This delay leads to operational divisions between old/legacy and new firms.
When employees work in different systems or follow inconsistent processes, this encourages an “us versus them” mentality, which increases divisions within the newly merged firm. This division creates inefficiencies in the process and prevents a solid integrated culture from taking root.
Employees are left juggling multiple work styles, causing frustration, confusion and reduced morale. A strong culture is built on collaboration and shared resources. Without integrated processes and systems, that culture is difficult—if not impossible—to achieve.
Delaying integration has real costs
Another common challenge in M&A is that firm leaders do not want to force people to adopt new systems too quickly. Although this may seem like a sensible approach, delaying the integration of technology prolongs the inevitable. Ultimately, employees will need to learn new systems and processes, and the longer the delay, the more disruptive the change.
Delayed integration of technology and processes also creates functional silos, preventing the firm from reaping the full benefits of convergence. When different offices or departments use their own technology and follow their own processes, the firm will not benefit from collaboration and sharing of resources. As a result, companies miss out on efficiency gains, job cuts and reduced performance—which are often key reasons for mergers in the first place.
How to build an integrated firm through technology and process integration
To overcome these challenges, firms must prioritize technology and process integration before the M&A process. This includes aligning platforms, software and workflows so employees can work together seamlessly on day one.
This takes effort but ensures that everyone is on the same page, contributing to a “one company” culture rather than perpetuating the divide between legacy and new teams.
Of course, successful integration does not mean unquestioningly adopting the acquiring firm’s technology. It is important to evaluate the processes and procedures of the acquired firm and identify any areas that may benefit the combined entity. The acquired firm’s technology or workflow may have advantages that can improve operations or customer service. Rather than looking at integration as a top-down implementation, take the opportunity to incorporate best practices from both sides.
Recommendations for sustainable practices and technologies throughout the firm
Here are a few ideas for incorporating a firm.
- Start with a comprehensive review. Before the effective date of the merger or acquisition, list the technologies and processes used by both firms. Recognize weaknesses and inefficiencies and point to strengths on both sides. This assessment will help guide decisions about which flags and systems should be retained and which should be replaced.
- Prioritize important platforms. Focus on core systems such as billing, time tracking and customer communication platforms. These are essential for day-to-day functioning and provide the greatest benefits when integrated early.
- Invest in training and support. Effective communication requires employee buy-in. You can generate buy-in by providing comprehensive training and ongoing support. Instead of simply ordering the collective workforce to use new systems, show them how these tools will make their work easier and more efficient.
- Communicate clearly and often. Open communication is essential for a smooth integration process. Explain the reasons for the changes and how they will benefit the firm, employees and customers. Provide regular updates on integration progress to help reduce anxiety and keep everyone focused on common goals.
- Engage employees in the process. Get feedback from employees at all levels on how processes can be improved. Consider creating a merger group with members of old and new firms. Involving employees in decision-making helps build ownership and facilitate change by directly involving stakeholders.
Mergers and acquisitions can be an important opportunity for firms to grow and expand their capabilities. But the long-term success of these mergers depends on how firms integrate their processes with technology. By prioritizing these factors early and involving employees in the process, you can build a cohesive, collaborative culture that lays the foundation for growth in the years to come.
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