Monitoring the M&A Mash-up

With the US and European markets and economies tilting, mergers and acquisitions within the financial industry are likely to continue through 2011 and into 2012 – smaller players, or even some of the larger ones who are in distress, may be picked up by others who are sitting on large cash reserves and looking to advance their position.

Banks, card networks and payment processors that have undergone M&A activities are now focusing on achieving system synergies.  At the same time, their enterprise infrastructure has been growing and evolving.  As a result, many of these companies now face the issue of poor visibility – not really knowing what they have technologically or how to monitor it.

Dealing with the merger of critical financial technologies can be beyond stressful for IT teams – they can become a nightmare.  The configurations of these new M&A environments are so complicated that it can take days to isolate performance issues.  Just keeping one system coherent and fully functioning is hard enough.   Add a second one and expect them to play well together?!?!

With two or more distinct enterprise systems, the challenge is to overcome a host of duplication and interoperability issues without upsetting the necessary flow of financial transactions.  The issues include:

  • eliminating duplication of costly services
  • converging admixes of proprietary protocols
  • resolving incompatible features on similar applications
  • weeding out multiple vendor systems and licenses
  • coordinating distinct IT teams and processes
  • implementing customer migration

Considering these potential risks, it almost seems simplest to maintain two distinct systems, rather than try to achieve merger synergies and a smooth transition of resources, customers, services, and applications with minimal impact on the day-to-day operations. To paraphrase Eisenhower, “planning is essential but plans are useless“.

Regardless of the game plan, one of the critical tools to minimizing the risk of service disruption during an M&A migration is real-time visibility.  Changing wings on a flying airplane (or is that two airplanes?) is bad enough – there is no good reason to do it in the dark as well!

To cope with up-to-the-minute tide change you have to have continuous, detailed data on how the systems are performing.  And you need it immediately to prevent costly performance issues or down-time from occurring.

And how are you going to get that on an operational system that you just acquired?

Many aspects of two or more financial systems may be at odds, but one of the common features they share are the inter-application communications (messaging) and the end-to-end transactions that they represent.  Delivery of value-bearing transactions is primarily what all such financial systems are about – it is what customers care about.  It is what drives the financial services in all their many forms.  So these are the canaries in the gold mine – and the source of the gold itself.

On the technical side, if something is going wrong, or going right, it will show most clearly in the behavior of transactions.  They are not only the raison d’etre of financial IT, but they are a critical indicator of the health of the overall system and application performance.  And they are what customers directly experience.  Continuously monitoring transactions makes it possible to keep a close watch on the overall performance of the whole system.  Drill down and problem resolution can be saved for when you have isolated your issues.

Business Transaction Management (BTM) directly addresses the visibility problem and makes it possible to pursue merger synergies with greater confidence and efficiency.  It offers the kind of visibility that is required, not only for day-to-day operations, but for stressful, high-risk events like an acquisition or merger.  A real-time transaction monitoring capability based on network traffic can be rapidly deployed into new environments without risking the stability of an operational system.  And it can track the impact of transitional changes that are directly correlated to end-user experience and business performance.

You can see what you need to manage – and that is pretty important when changing wings on airplanes in mid-flight.

For more information on monitoring your M&A mash-up, read:  Paving the Way to Risk-free Change: A Guide to Consolidating IT Systems & Rolling Out New Services in a Payment Processing Environment