Vasyl Soloshchuk
CEO at INSART
12 November 2020

Technology Teams While Acquisition: Notes For CTO

Followed by the TD Ameritrade acquisition by Schwab and the rate with which companies build integrations today, acquisitions become increasingly relevant. According to the recent State Of Fintech Q3’20 Report by CBInsights, mortgage companies and brokerages were popular acquisition targets in 2020. For instance, mortgage analytics firm Black Knight acquired Optimal Blue for $1.8B, ICE acquired EllieMae for $11B, and United Wholesale Mortgage is set to go public in a $16B SPAC deal.

From a business perspective, the acquisition is not a challenge. Problems begin when it comes to technology teams and their responsibility in a company that just has merged. Dave Whitaker, Foreside’s President, and Miguel Zakharia, CTO at AssetBook, commented on the merger topic. Here you can find advice on how to keep the software development rolling notwithstanding the structural changes.

How do acquisitions influence the company’s business and software development process? How do they influence the integration partners of such a company?

David_Whitaker: Fintech CTO ClubDave: On the business side, we work meticulously to ensure that the client experience is enhanced whenever we integrate businesses. We bring new ideas to the table in any integration and make sure that they are not only heard but also advance through a rigorous process to work across teams and ensure that enhancements in client service are achieved. 

Dave: With regard to software development, we assess the technology we acquire from both a strategic and technical standpoint. From a strategic standpoint, our team evaluates the best approach to fit the technology either into our open architecture model and/or how new features fit into our vision of a comprehensive compliance technology offering. From a technical perspective, we ensure that our technical teams have input in the overall roadmap and feasibility assessment, then provide them with the tools to execute the plan. Acquisitions have a double benefit for bringing creative tech and business process solutions to our firm, as well as different client types. The marriage of these two services to help us road map adoption priorities, as well as future enhancements.     

Sometimes companies do not try to integrate teams. It all depends on the purposes which a company making an acquisition pursues. 

Miguel: One purpose of a well-built API is to insulate integration partners from internal change. In this case, it seems Veo will be shuttered completely in favor of Schwab’s technology. That’s bad news for all Veo integration partners.     

How to structure the work of two software development teams after acquisition?

Both experts made emphasis on thorough planning importance for joining two different teams in one structural whole. Thinking all the steps beforehand allows keeping service seamless for clients.

Miguel Zakharia: Fintech CTO ClubMiguel: Priorities will shift to tight internal integration of the platforms, but that takes a long time and requires meticulous planning in order to not cause disruption to clients. The teams will start to work on internal APIs so the systems can communicate more efficiently while also determining which overlapping parts can be removed.

Dave: We engage in thorough integration analyses to build a roadmap for harmonizing technology and business processes with a view of minimizing client disruption, and an end goal of a unified offering. Often smaller consulting firms are joining us to take advantage of Foreside’s technology platform. To try and compete in this space, they may have had to engage a third party tech solution platform that wasn’t built specifically for their business process or their exact services. When they come to Foreside, they find that our purpose-built solutions are able to better serve their own client base. In those instances, we work with those platform providers and our own teams to smoothly migrate clients onto our platform. This demonstrates how smaller firms using basis code can be better serviced when partnering with Foreside.

Should one let the teams be autonomous or not? How to make the process smoother and avoid conflicts?

Dave: We believe in engaging teams in collaborative discussions around pain points and visions for future enhancements to services, technology, and processes. The ultimate goal is the enhancement of the client, product, and employee experience. We take a client-by-client, service-by-service approach to how we manage the team and their client’s transition into Foreside. 

The open discussion strategy is a gem today for creating innovations. However, opinions on how to organize work vary from one company to another; what works in one company can barely be reached in another. When we look more closely at the problem, it would become clear that making every team autonomous requires additional resources. It’s up to you to decide whether it worth spending the resources in every single case.

Miguel: Autonomy is fine for a period of time, but in order for the new operation to be cost-effective the teams will all need to operate in a similar manner. It’s challenging and expensive to let each team do things their own way. Communication becomes difficult which affects planning and the company will not be able to realize cost savings by sharing resources.

Summary

Acquisitions are fine for technology companies – both business people and tech guys. The way you structure your teams and make them hear each other matters if you want to enhance, not to harm the project. The best one can do is to look at each custom case and analyze what means can help you harmonize two different teams with their own cultures, processes, ideas. Don’t forget that building internal APIs is also a solution, even if your case isn’t about that.