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Enterprise Architecture: Mergers and Acquisitions

by Zak Cole       • June 4, 2020

Because of its holistic view of an organization, enterprise architecture and mergers & acquisitions (M&A) go hand-in-hand.

M&A activity, despite or in light of COVID-19, are on an upswing. The Financial Times reported Google, Amazon, Apple, Facebook and Microsoft have made 19 deals so far this year, according to Refinitiv, the London-based global provider of financial market data. This represents the fastest pace of acquisitions and strategic investments since 2015.

Let’s face it, company mergers, even once approved, can be daunting affairs. Depending on the size of the businesses involved, hundreds of systems and processes need to be accounted for, which can be difficult and often impossible to do in advance.

Following these transactions, businesses typically find themselves with a plethora of duplicate applications and business capabilities that eat into overhead and complicate inter-departmental alignment.

These drawbacks mean businesses have to ensure their systems are fully documented and rationalized. This way the organization can comb through its inventory and make more informed decisions on which systems can and should be cut or phased out, so it can operate closer to peak efficiency and deliver the roadmap to enable the necessary change.

Enterprise Architecture Needs a Seat at the Table

IT professionals have the inside track about the connection that already exists across applications and data – and they’ll be the ones tasked with carrying out whatever technical requirements are in order post-acquisition.

But despite this, they’re rarely part of M&A tech strategy discussions and the synergy between enterprise architecture and mergers & acquisitions is overlooked. That should change.

With IT leaders involved from the start, they can work with the CFO and COO teams on assessing systems and providing advice on costs that might not otherwise be fully accounted for, such as systems and data integration.

Additionally, by leveraging the right technology in the beginning, IT can provide a collaborative platform for business and technical stakeholders to get a complete view of their data and quickly visualize and assess what’s in place across companies, as well as what integrations, overlaps or other complexities exist.

This is why enterprise architecture for mergers and acquisitions is essential.

EA helps organizational alignment, providing a business-outcome perspective for IT and guiding transformation. It also helps a business define strategy and models, improving interdepartmental cohesion and communication.

Enterprise Architecture roadmaps can also be leveraged to provide a common focus throughout the company, and if existing roadmaps are in place, they can be modified to fit the new landscape.

EA aids in rooting out duplications in processes and operations, making the business more cost efficient on-the-whole.

Two Approaches to Enterprise Architecture

The Makeshift Approach

The first approach is more common in businesses with either no or a low-maturity enterprise architecture initiative. Smaller businesses often start out with this approach, as their limited operations and systems aren’t enough to justify real EA investment. Instead, businesses opt to repurpose tools they already have, such as the Microsoft Office Suite.

This comes with its advantages that mainly play out on a short-term basis, with the disadvantages only becoming apparent as the EA develops. For a start, the learning curve is typically smaller, as many people are already familiar with software, and the cost per license is relatively low when compared with built-for-purpose EA tools.

These short-term advantages will be eclipsed overtime as the organization’s EA grows. The adhoc Office tools approach to EA requires juggling a number of applications and formats that can stifle effectiveness.

Not only do the operations and systems become too numbered to manage this way, the disparity between formats prevents deep analysis. It also creates more work for the enterprise architect, as the disparate parts of the Office tools must be maintained separately when changes are made, to make sure everything is up to date.

This method also increases the likelihood that data is overlooked as key information is siloed, and it isn’t always clear which data set is behind any given door, disrupting efficiency and time to market.

It isn’t just data that siloed, though. The Office tools approach can isolate the EA department itself, from the wider business as the aforementioned disparities owed to the mis-matching formats can make collaborating with the wider business more difficult.

The Dedicated Approach

As an organization’s enterprise architecture grows, investing in dedicated EA tools becomes a necessity, making the transition just a matter of timing.

With a dedicated enterprise architecture tool, EA management is much easier. The data is all stored in one place, allowing for faster, deeper and more comprehensive analysis and comparison.

See also: Getting Started with Enterprise Architecture Tools

Collaboration also benefits from this approach, as having everything housed under one roof makes it far easier to share with stakeholders, decision-makers, C-level executives and other relevant parties.

Benefits of Enterprise Architecture for Mergers & Acquisitions

While organizational mergers can be fraught with many challenges. they don’t have to be so hard.

Enterprise architecture is essential to successful M&A. EA helps document and manage this complexity, turning all this data into meaningful insights.

It helps alignment by providing a business-outcome perspective for IT and guiding transformation. It also helps define strategy and models, improving interdepartmental cohesion and communication.

Roadmaps can be used to provide a common focus throughout the new company, and if existing roadmaps are in place, they can be modified to fit the new landscape.

erwin Evolve is a full-featured, configurable set of enterprise architecture and business process modeling and analysis tools. Use erwin Evolve to effectively tame complexity, manage change, and increase operational efficiency.

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