Mergers, acquisitions, and divestitures are complex, high-stakes endeavors that set countless moving parts into motion, often across multiple companies, teams, and geographies. Each decision can have a ripple effect on operations, culture, and long-term profitability.
As someone who has personally gone through M&A in the ServiceNow ecosystem, I can assure you, it can also be a deeply personal experience for founders, leaders, and employees alike.
With market uncertainty fueling another round of deal activity, many leaders are facing the impending financial inflection points. If you’re among them, then you know the real challenge isn’t just getting through the process, but rather navigating the change management process strategically. This involves aligning all stakeholders and uncovering opportunities that transform the deal from a simple handoff of assets into a true engine for value creation.
The question many M&A leaders need to ask themselves (often) is: “How can I best get through this process, to create value for our investors and employees?”
With decades of experience helping organizations manage the process, strategy, and technology “bake-off” planning (in addition to leading a global integration strategy ourselves for the past two years), you might say handling both M&As and divestitures is in the CoreX DNA.
With market dynamics increasingly pointing to another active M&A season, we decided it’s time to revisit the topic, assessing priorities when engaging in either of these foundational restructuring endeavors.
If you are looking into the integration looking glass, start by considering these moves not as something happening to you and your teams, but as an opportunity. Can you take advantage of this business phase to optimize and automate services? For many of our clients, M&A activities can also serve as an inflection point in operations, whether in HR, IT, or other areas, to use as a stepping stone in transforming your business.
There are not many times in business to “shake the rug,” and an M&A or divestiture presents a great opportunity to make improvements across the following priorities:
People
As with anything in a business, people are the priority, and an M&A or divestiture is a big transition, both personally and professionally, for everyone involved. This makes communication a key focus during the deal.
Communicating clearly and often through the process is important, and the ServiceNow portal is a great place to provide a single point of entry for all information and reporting on the activities around the transition. For example, leveraging knowledge management to offer your new teams a single location you repeatedly send your teams to is exceptionally helpful to facilitate transparent communications.
For experienced ServiceNow users: guided experiences and Agentic AI problem solving are major productivity boons for teams suddenly facing a second mountain of integration work, all on top of their day jobs.
Another area of focus for the people involved is services. This is the time to optimize services to make job activities easier for everyone. The ServiceNow Employee Center provides a hub for communications and a higher level of service for employees. Advanced strategies, such as HR Skills, can significantly streamline major integration lifts, such as team skills profiling and job matching.
When we talk about optimizing services, we are saying, “it's very hard while in the day-to-day activities of keeping the lights on, to truly reflect and make whole changes to the way you do things." During an integration, it's a good time to look at the way you're doing things and truly transform and improve your operations.
In short, don't just accept the status quo and “shift left.” Instead, use the time to come up with an ideal version of what you're doing and improve all stakeholders’ experiences.
Your people will be going through a lot during the process and will likely be apprehensive. Acknowledging this and making it easier for everyone to do their job will smooth an M&A or divestiture.
Assets and Security
From an asset standpoint, you’re usually either purchasing or acquiring services and/or equipment. This means focusing on asset management is important. For example, you don’t want to pay for $100K in devices when, in reality, there’s only $85K involved in the deal. It’s worth spending time and energy getting your data correct from an asset management standpoint.
Taking security into account, especially in a divestiture, make sure you have all the equipment you are supposed to have and that there’s no access to your files left in place at the divesting company.
Security loopholes and vulnerabilities get opened wider when people have your assets or the configurations on your assets.
From experience, keeping an eye on the little things and leveraging workflows to ease the transition can keep those “littles” from becoming bigger things. Look at processes like how people request a new computer, or who owns the new IT provisioning approvals, to ensure your team stays productive in times of change.
Nothing makes top talent pick up a recruiter’s phone call faster than 24 hours of no response when your laptop fails because no one knows who to call.
Transition Service Agreements
People, assets, and security top the priority list, but transition service agreements (TSAs) to vendors, divesting companies, or legal departments are huge in these deals. TSAs buy time to set everything up. The art of being successful is prioritizing the correct activities.
Exiting TSAs can be prioritized, depending on your business goals, by different criteria. Some companies prioritize TSA exits by cost, some by risk and security, and some by employee and customer experience. Spend the time to talk about what's important to your company and prioritize which TSAs you want to exit, and when.
ServiceNow comes into play through splitting things up into focused areas like asset management and the configuration management database (CMDB) to understand the landscape of the environment you’re taking on and understand what you’re purchasing, why you’re purchasing it, and the schedule for that purchase.
Customers
Divestitures or acquisitions come in two forms: a divestiture often creates a newly built startup that doesn’t necessarily have all its ducks in a row, meaning there’s an opportunity to transform the business from the ground up. An acquisition often involves a more established company that might not be totally optimized or have a lot of automation and efficiencies in place.
The process offers a time and place to make the customer experience easier and more navigable. If you are using ServiceNow customer service management or anything customer-facing, such as source-to-pay or procurement, there is an opportunity to focus on the customer experience and optimize workflows.
You are most likely going to get more customer calls if this news goes public. Even something as simplistic and effective as Knowledge Management can help allay fears and ensure your global strategic messaging is shared by everyone in the org, from the exec teams to call center staff.
Seize the Opportunity to Optimize
The fifth priority stands out because it crosses into all the areas already covered. CMDB is extremely important in M&A and divestiture, especially in assets, security, and TSAs, because it allows you to have your configuration management and operations management organized from a data standpoint.
This organization allows for automation and understanding of what’s happening in the new environment, and it helps you recognize when and where pivots are needed, as well as vulnerabilities. Have a strategy for matching CIs, align naming conventions, and decide on your overwrite strategy to ensure your technical back end supports your new modalities.
Wrapping Up
Each element highlighted in this piece is important in its own way, but what’s really important is taking prioritization into account during an acquisition or divestiture. Just prioritizing in the right manner will take most of the angst out of the process for everyone.
How do you go about prioritizing? Understanding the current landscape of your company, including its struggles and pitfalls, plays a crucial role. We’ve assigned a specific member of the team, at the executive level, who “owns” the success of the transition from multiple levels.
While some firms exclusively focus on items such as the timeline of brand sunset, ensuring the value of your investment business case is realized, employee retention, and CSAT metrics post-acquisition are often more applicable metrics to determine the overall value of your merger.
M&As and divestitures are part of business and provide an opportunity for companies to reinvent themselves into more optimized and more efficient organizations.
When going through an acquisition or a divestiture, don’t just cut-and-paste. Use the opportunity to rewrite the narrative. Every action you will take during your integration timeline has an impact and a cost. Understanding your “what” and “why” will be more important.
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Note: This conversation is far from over. Stay tuned for more M&A commentary from Grant in the coming months.
