CLDA Mag : What are the biggest technology-related challenges in these transactions ?
Kravtiz : The most significant technology-related challenge for final-mile mergers and acquisitions is merging two TMS systems with customer-specific integrations ( i . e ., legacy systems ). Many of these companies need to gain the technical expertise , experience , and team to merge these complex systems without causing operational failures . The final-mile delivery space needs to be standardized , leading to bespoke data cultures per company . These unique data cultures become problematic in a merger because they are coupled with specialized workflows , custom data types , and pricing methods . As a result , the acquiring company will struggle with application rationalization and data migration between the companies . These struggles lead to lost profitability due to customer retention , operational inefficiencies , employee turnover , and service failures .
We have also found that the investment in IT infrastructure and security greatly varies across organizations and geography . The lack of implementing the minimum best practices makes merging much more costly for the acquiring party . In some cases , we have seen overly engineered and misaligned infrastructures that are costly to merge with the acquiring party .
CLDA Mag : When two companies merge or one is acquired , what are the first things they should do to make the tech transition go as smoothly as possible ?
Kravtiz : The first thing we do is to set up a project plan and assign a business analyst to obtain due diligence documentation from the acquiring party . This document will usually cover high-level items like the number of users , systems in production , basic infrastructure mapping , and other high-level technical findings . We will use this initial documentation to better understand their goals and purpose for the acquisition .
After an initial review with the acquiring party , our business analyst will create a gap analysis document .
• Technology Audit : This comprehensive technology audit of both companies is designed to help us understand their IT infrastructures , systems , applications , and data . Potential challenges or areas may require immediate attention during the integration process .
• Cross-Functional Integration Team Makeup : Form a cross-functional team with representatives from both companies , including IT , HR , legal , and business leaders . This team will drive the integration process and ensure coordination between different departments .
• Technology Integration Strategy : Create a detailed strategy outlining the transition ’ s key milestones , goals , and timelines . Critical areas may need immediate attention . Prioritize integration tasks accordingly .
• Communication Plan : This should be clear and transparent to keep employees , stakeholders , and customers informed about the merger or acquisition and the technology transition process . Address any concerns and inform about progress .
• Map Data and Systems : Our initial data and systems mappings of both companies will help identify overlap areas and potential integration points . Plan for data flow between systems and ensure data integrity and security during the transition .
• Applications Rationalization : We will evaluate the software applications ( TMS systems ) and tools used by each company . The goal is to identify redundant or incompatible applications and help our customers determine which ones to keep , integrate , or retire .
• Plan to address immediate integration needs : Focus on the most urgent integration needs first , such as merging email systems , establishing secure access controls , and ensuring business-critical applications are operational .
• Plan for Business Continuity and Disaster Recovery : Prioritize business continuity and disaster recovery planning to ensure uninterrupted operations
40 customized logistics & delivery Magazine I summer 2023