Q: When should your credit union start planning for possible M&A activity? A: Yesterday

For most credit unions, industry mergers and acquisitions is more than water cooler talk. It’s an everyday topic of conversation. After all, in the first nine months of 2018, an average of 15 credit unions merged per month.

Whether you are the acquired or acquirer, there are always big personnel – and personal – questions, of course. Will a larger institution absorb your smaller organization? Will your smaller organization merge with another to level up? How will staff merge? Will there be overlap? Are our business philosophies compatible? How will we manage change? Questions abound.

Layer in another level of change management for IT. While merging business practices presents a challenge, it often pales when compared to merging technology. IT staff dealing with an older, outdated legacy imaging systems with poor taxonomy will face numerous challenges integrating it with a newer or similar system. If one system is still paper-based or a hybrid solution? Add a few more headaches to the mix.

I sometimes think of it as two rally race teams merging. Both come in with a driver, navigator and a team of mechanics – business and IT – and a race-ready vehicle – the company’s technology solutions. How do you get those teams working together? Even though the decisions might be hard, it’s easy to decide who will drive, who will navigate and the mechanics best suited to the job. It’s another to decide which vehicle to race, especially when it might not take the fuel available from the other team.

When credit unions merge, ultimately, you may have two entities coming together within entirely different core line of business applications. To be successful, they need an effective strategy to standardize technology and blend processes.  

How do you do that? Plan ahead.

Put together your acquisition strategy yesterday

Regardless of your credit union’s size, or whether you are buying or selling, the industry will eventually deliver the gift of M&A to your door. To better poise your organization for the transition, it’s best to plan now. Your employees and members will thank you. As will your new employees and new members.

I like what Info-Pro Lender Services suggests as the best way to get started. Info-Pro is a leading provider of real estate tax tracking, flood determination services and property insurance monitoring services. They advise:

• Creating a strategic plan as early as possible. Make sure employee communication and training, client communication and cultural change management are top of mind.
• Ensuring all data is correct and up-to-date in your portfolio, and that there are no real estate tax delinquencies.
• Working with a third-party vendor to ensure a smooth transition with all the complicated components and moving parts.

For me, that last one rings true, especially when we’re talking about core systems and how best to merge and maintain critical processes. There is no better time than now to review your stack and see how you can best prepare technology for the merger process.

While you are taking another look at your core, also consider how you might evolve your content management strategy. The right content services solution will allow you to:

• Connect information, processes and systems
• Improve departmental productivity by breaking down information silos, supporting collaboration and streamlining processes
• Deliver critical content in context and giving employees visibility into the information they need, when they need it
• Empower users with complete information to make quick and accurate decisions

One way or another, M&A equals growth and evolution. Your core and your content services solutions should work in tandem, growing and evolving with you, so that when the time comes, technology disruption is minimized, if not eliminated.