"The rapid pace of innovation is driving some companies to make multiple acquisitions to meet their strategic goals and remain competitive ... This requires sophisticated analysis, robust planning and excellent execution."Erika Schraner, Americas Technology Operational Transaction Services Leader, Ernst & Young.

M&A transactions in the technology industry are off to a strong start in 2011. As growth in M&A increases, it's important to remember that executing the transaction itself is just the first step of a journey — executing the integration effectively to capture all of the expected value of the deal is the rest of the story.

Uncertainty requires integration diligence

Starting with cloud computing, the big trends driving technology deals in 2011 each have a different impact on integration considerations. The uncertainty that surrounds various compliance, regulatory and risk factors associated with cloud computing, for example, requires rigorous due diligence and upfront integration planning, along with continuous monitoring.

Increasing integration complexity

"The rapid pace of innovation is driving some companies to make multiple acquisitions to meet their strategic goals and remain competitive. That 'need for speed' also affects the integration process — especially when companies must deal with the very real complexity of merging multiple acquisitions simultaneously, while meeting Board and market expectations for results. This requires sophisticated analysis, robust planning and excellent execution," says Erika Schraner, Americas Technology Operational Transaction Services Leader at Ernst & Young.

New models increase integration risk

As the social networking and cloud computing technologies acquire and transform businesses' operational, strategic and business models, the complexity and risk associated with the integration process increases. This also tends to be the case when integrating deals that involve new areas of e-commerce, business analytics, online payment and processing or online advertising and marketing analytics.

Globalization also adds risk

Finally, there is the impact of globalization. Cross-border deals continue to rise, and with them comes a host of cultural, regulatory, finance and reporting integration issues. Regardless of the specifics of a given situation, success is often derived from the same approach: be prepared! Ideally, start integration planning during the due diligence phase, or even earlier — and don't underestimate the effort required to successfully integrate the acquired company.

A successful acquisition starts with a clear integration strategy, supported by achievable detailed plans, engaged executive sponsorship, broad-based functional support, a culture willing to adapt to change and experienced resources to implement the integration.

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