Leverage HR's Natural Role in an M&A

February 17, 2017

Leverage HR's Natural Role in an M&A

Successfully executing a merger or acquisition is a lot like starting a new restaurant–most fail soon after they begin. Executives and private equity experts already project a spike in 2017 deal activity. To ensure your organization isn’t another statistic, now is the time to rethink HR’s role during a merger or acquisition.


Historically, the HR department’s main responsibility in the often messy M&A process has focused on damage control (i.e., maintaining transparent communication with staff, assuaging fears about layoffs). As a result, many executives fail to see the larger role HR can play during and post-integration.

Most corporate leaders agree that effective post-merger integration is the main indicator of success or failure in a newly combined enterprise.

How IT Complexity Undermines Effective Integration


Most corporate leaders agree that effective post-merger integration is the main indicator of success or failure in a newly combined enterprise. But mastering this step is more difficult given the complex IT environments each party brings to the table.


The average organization today uses anywhere from 600 to 1,000 cloud apps, according to Gartner research. In most instances, the IT department knows about less than 10 percent of them. Now imagine bringing two IT departments together, each with their own dramatic blind spots into their employees’ technology use. It’s a recipe for a data disaster, one that can expose the combined organization to tremendous risk and financial liability, not to mention dips in productivity.


Onboarding end users on Day One after a deal closes to the tools they need and with the appropriate permissions can be a time-consuming, precarious process. To avoid a post-merger meltdown, this process requires a team effort.


The Upside of HR-Driven Identity


Unlike IT departments, HR houses the most accurate, up-to-date records for any given employee. HR, not IT, is usually the first to know when a new hire joins the company, and when someone is scheduled to depart, usually before anyone else does.


Although HR has become the primary source of truth for employee identities, the responsibility of provisioning and deprovisioning users across an organization’s IT environment is owned by IT. In any given business, it’s not uncommon for HR and IT departments to manually maintain employee records in their respective systems, e.g., HRIS and Active Directory, communicating when necessary through clunky spreadsheets or ticketing systems. This needlessly complicated process won’t cut it when integrating end users after a merger or acquisition. Rather than risk onboarding delays, and employee frustration because of it, the combined organization should embrace an HR-driven identity strategy.


Thanks to partnerships between identity access management and HR software vendors, employers can embed IAM functionality into their main human capital platform. With this approach, an organization’s HR system of record—be it Workday, Namely or UltiPro—becomes its single source for managing employee identities.


For example, when creating new user records in an HR program post-merger, that information can automatically sync with the organization’s directory service, e.g., Active Directory, ensuring each employee can access the apps they need on any device, with the right permissions. Similarly, HR can remove user records for employees who leave during or after an acquisition, instantly deprovisioning them from corporate applications and the sensitive data stored within them. 

It’s time for business leaders to fully leverage the natural role HR departments can readily fulfill during a merger or acquisition. Equipped with the right tools for the job, HR can ensure that the integration process is smooth and secure for everyone involved.

The Authors: 

Alvaro Hoyos is the chief information security officer for OneLogin, a leader in cloud identity management solutions, where he architects and leads the company’s risk management, security, and compliance efforts. He has more than 15 years in the IT sector. Prior to joining OneLogin, Hoyos helped startups, SMBs, and Fortune 500 companies with their security, compliance, and data privacy objectives. To learn more, visit OneLogin online. Twitter: @wherestherisk