The 5 Levels of M&A Technology Integration: Stage 5 Replatforming [PRO]

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Stage 5 integration is the ultimate step in M&A software integration. Few technology companies end up achieving Stage 5 integration following an acquisition or set of acquisitions. It’s actually more common in the case of a tech firm taking an internal legacy platform and rebuilding capability onto a new one. This is something hundreds of technology firms had to do in the case of transitioning enterprise technology (i.e., software installed behind the firewall and often heavily customized) to cloud-based models. SAP Ariba, Jaggaer, Oracle, Medius, Basware and dozens of other providers did precisely this over the past two decades (some more recently than others).

In this Spend Matters PRO series, we are defining, introducing and exploring the five levels of M&A technology integration that vendors must go through when bringing together different modules and platforms. We should note, however, that bringing together different applications and technology stacks is not a requirement of any acquisition. But anytime a technology provider wants to market and achieve customer synergies through a transaction outside of “cross-sell/up-sell,” the degree of integration planned, its timing and ultimate realization should be a priority for investors and customers alike.

Today, we explore the fifth and final level of integration that occurs in a post-merger situation or when vendors replatform old technology onto a new stack while still having to maintain existing solution capability on the legacy platform. From a vendor perspective, we define how to do it and provide examples of this type of integration. And from a user perspective, we suggest tips and tricks for technology buyers to discern this level of integration compared with others.

If you’re new to this series and want to learn the five levels of integration, start with this introduction. In the previous installments, we cover Stage 1, Stage 2, Stage 3 and Stage 4 integration levels in detail.

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