Mergers and Acquisitions have long been a fact of life in corporate America, and increasingly they are a fact of life in the nonprofit sector as well. Reading the news about the recent merger between Kraft Foods and Heinz to create Kraft Heinz Co., is a reminder that Telecom is a topic that doesn’t always get the attention it deserves – especially when all of the focus is on new opportunities and HR and a host of other merger-related issues. Mergers like Kraft Heinz Company often bring together different IT organizations in an uncomfortable mix. While the organizations negotiate about which systems survive and which get phased out, there is not a lot of time to wonder what happens when the new entity has to merge two networks with a raft of different vendors. We thought we’d put together a list of the common mistakes organizations make in their telecom systems during a merger.
1. Bringing networks together can be messy.
There are three main issues to consider here: technology, vendors and contracts. different organizations may be at very different levels of technology and both will have a very large investment in that technology. One organization may have adopted VoIP across the board while the other is stuck in much older technology. Careful decisions should be made about how to inter-operate the technologies and you need to develop a plan for migrating to a single technology.
There are hundreds of vendors offering telecom services in the marketplace, and chances are that each organization will have its own group of vendors and relationships. This makes comparing technologies harder, since each vendor will have proprietary names and protocols to compare. It can also cause technical issues for some technologies, like MPLS, that require a single vendor solution. When developing a plan for migrating to a single technology, you should also consider which vendor or set of vendors offers the best value and support for the merged network.
Finally, contracts. Nearly all telecom services are provided under contract. Do not make the mistake that just because the name on the letterhead has changed that your contracts are invalid. If you merge your networks haphazardly, you may be setting yourself up for significant termination penalties. Any planning for mergers should take contract terms into account. Also, pay special attention to the terms for canceling services because many contracts include evergreen clauses. If you don’t provide the contractually required notice for cancellation, you may find that the contract renewed automatically and you’re stuck for another year or two.
2. The staff may be different and needs have changed.
Very often, mergers and acquisitions are done with an eye toward being more efficient, and any merger will rearrange departments and affect many of the staff. Telecom services for the old organizations may not match up to the needs of the new organization, so its a good idea to take an audit to see if changes need to be made. The goal is to make sure that you aren’t paying for too many services or have too few to do the job.
3. Are telecom services accounted for?
Speaking of audits, a merger is a great excuse to just make sure of the services you are paying for and have a good inventory. Many organizations pay the same bills for years and in the process of changing and merging locations, it is very easy to lose track of what the organization has in place. We have seen spaces that were remodeled where phone lines were sealed behind the new drywall. More importantly, we have seen buildings that were closed as part of a merger where the bills for telecom services continued for years afterward because no one noticed. Mistakes like this can cost an organization a lot of money.
In conclusion, it’s just a good idea in general to keep on top of your telecom costs all the time, and a merger is a great excuse to do so. Not only can it save your organization a lot of money going orward, it can save your IT department a lot of headache trying to manage your services.