For example, we often see situations where a company will make several acquisitions and yet they wait too long to consolidate IT across the portfolio. This leads to higher operational costs from having to support and manage multiple one-off solutions. It can also cause IT operations to slow down and the deal thesis to stall.
RKON CEO, Jeff Mullarkey, recently sat down with Robert Sheesley, CIO of Wrench Group, to talk about common mistakes we see in the middle market during M&As, as well as other IT issues.
Wrench Group is a national leader in home repair, replacement, and maintenance services that over the past few years has made key acquisitions in its industry. Sheesley offered examples of the problems that can arise during M&As, as well as opportunities for IT leaders to create value for their organizations.
He said he has seen “a great deal of fragmentation, disparate systems, and heterogenous IT ecosystems,” among targeted companies. That makes it difficult to move toward IT maturity, which typically follows a path of: optimize, stabilize, transform, disrupt.
“You cannot get to optimization, let alone transformation and disruption, when you have disjointed IT,” Sheesley said. For example, data normalization — in which data is standardized across records and fields — becomes a struggle.
“It’s possible to normalize the data in these situations, but it takes a lot of sweat equity,” Robert said. “And then you can’t get a good comparison of performance metrics across your portfolio.”
In turn, the fragmentation makes it difficult to execute best practices based on leading indicators or best-performing departments.
What you should be doing
Consolidate as soon as possible. “You don’t have to do this with every business unit or function, but it’s important to at least initially seek homogeneity in areas that enrich customer data and financials,” Sheesley said.
Speaking from experience, Sheesley said Wrench settled on consolidated computing platforms — such as Adobe and Microsoft Azure — and made an investment in enterprise information management. This consolidation provides benefits; for example, workflow automation creates efficiencies.
“But the real value arrives when you can move from data to information to knowledge and wisdom,” he said. In other words, the ability to glean data insights that lead to faster and better decision making.
“Our enterprise information management goal was to get to a level of data normalization where we could compare eight KPIs across all our brands,” he said.
Once Wrench solved for that, they started looking at other leading indicators from which they could develop best practices for areas or functions that were lagging.
Another piece of advice: Be willing to stretch IT once in a while and learn from mistakes. For example, Wrench invested in machine learning but soon realized they weren’t ready and backed off.
“It caused us to go a little over our skis, but stretching allows you to see where the limits are,” Sheesley said.
Listen to the full conversation between Jeff and Robert here, which includes thought leadership and guidance around gaining IT maturity, digital transformation, cultural assimilation in M&As, and much more. Meanwhile, if you have any questions, please reach out to us.
