LEANIX SURVEY 202 1

The Role of
Enterprise
Architects
in M&A
LeanIX Survey 2021 The Role of Enterprise Architects in M&A
80%
80% of enterprise architects
are involved in M&A processes
– with a clear focus on
post-merger integration
Experts believe a significant increase in mergers & acquisitions (M&A)
activity will occur in 2021, defying the recent downturn in 2020. Indeed,
the drastic declines from the pandemic-related global economic
downturn saw business volume beginning in 2020 reach a record low
since 2016, according to Pricewaterhouse Coopers. Boston Consulting
Group also marked a global decline in April 2020 of 80% compared
to December 2019. However, BCG saw M&A activities accelerate
during the second half of 2020, primarily in the technology and
telecommunication industries.1
Against this backdrop of unprecedented economic upheaval, LeanIX
conducted a survey of nearly 130 enterprise architects from global brands.
Survey results gauged EA perception about M&A and their involvement
when it comes to M&A activities.
Survey findings show in the last 12 months, business transformations
that were driven by mergers, acquisitions, or carve-outs had a key
commonality. Enterprise architects were heavily involved in the majority
of these projects, especially with post-merger integration activities,
revealing how EAs provide significant value to the M&A process overall.
1 https://www.pwc.com/us/en/industries/tmt/library/technology-quarterly-deals-insights.html
https://www.bcg.com/publications/2020/mergers-acquisitions-report-alternative-deals-gain-traction
https://www.pwc.com/gx/en/services/deals/trends.html
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LeanIX Survey 2021 The Role of Enterprise Architects in M&A
Dynamic development
of M&A activities in 2021
Two recent M&A deals underline the upward trend expected for 2021:
(1) Salesforce's purchase of the messaging platform Slack for
approximately $28 billion, and (2) SAP's acquisition of the business process
management software company Signavio. Marquee M&A activities like
these are sure to continue transpiring and shaking the market in the
coming months. In a Deloitte survey, 61% of US dealmakers anticipate
a return to pre-crisis levels. A J.P. Morgan executive considers M&A to
be of utmost importance for developing the value story of each and
every company. As evidenced by strategic acquisitions, new alliances, or
carve-outs of specific business units in preparation for transactions and
IPOs, the market is clearly on the move. In particular, many organizations
are seeking to address gaps that became all too apparent during the
2
COVID-19 crisis.
2 https://www2.deloitte.com/content/dam/Deloitte/us/Documents/mergers-acqisitions/us-mergers-acquistions-trends-survey-the-future-m-a.pdf
https://www.jpmorgan.com/solutions/cib/investment-banking/2021-global-ma-outlook
Evaluating the state of M&A
in international companies
LeanIX works closely with the respective EA teams of its 350+ cross-
industry, large international customers. From December 2020 to January
2021, experts from these teams were asked about M&A activities in their
organizations. Focus areas included determining how many M&A activities
took place last year and the roles EAs play in these processes, which EA
use cases are particularly relevant for successful M&A activities, and the
hurdles EAs face in these activities.
More than a third of the EAs contacted from a total of 323 LeanIX clients
participated in the survey and provided valuable insights into their
current corporate reality. The overwhelming response to the survey alone
highlights the importance of the topic.
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LeanIX Survey 2021 The Role of Enterprise Architects in M&A

Numerous M&A activities in 2020

Even in 2020, a year marked by crises, M&As or carve-outs of business units In total, more M&A projects than carve-outs took place in 2020, with
played an important role for LeanIX customers. Three quarters of those some surveyed companies even reporting to have engaged in four or
surveyed had at least one M&A or carve-out project on their agenda. In more M&As.
almost 40% of cases, M&A or carve-out processes took place. For another
quarter of surveyed companies, at least one M&A project was pursued.
The remaining 12% answered to having pursued at least one carve-out.

FIGURE 1 FIGURE 2 FIGURE 3

MERGERS & ACQUISITIONS / CARVE-OUTS NUMBER OF M&AS NUMBER OF CARVE-OUTS
in the Past 12 Months in the Past 12 Months in the Past 12 Months

Both (at least 1 M&A + 1 carve-out) At least 1 M&A / no carve-out 1-3 4-10 1-3 4-10
At least 1 carve-out / no M&A Neither M&A nor carve-out >10 None >10 None

26% 38%
38% 46% 49% 46%

12%
3%
1% 4%
13%

24%
LeanIX M&A Survey (Jan 2021), n=105 LeanIX M&A Survey (Jan 2021), n=113 LeanIX M&A Survey (Jan 2021), n=110

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LeanIX Survey 2021 The Role of Enterprise Architects in M&A

M&A deals and carve-outs may differ in terms of due diligence or post-
merger integration tasks. With regard to IT, however, there are many
common challenges. Not only must the infrastructure of different units
become harmonized and/or separated, but informed calculations have
to be made to alter applications, products, and business processes –
a process requiring all technical dependencies to be accounted for.
It's imperative that these decisions never lead to interruptions in business
continuity nor reduce the value of the M&A or carve-out project.
In companies with highly complex IT landscapes, technological
integrations are a critical factor in M&A processes, especially when
companies rely on virtual communication. In these unprecedented times,
according to one Deloitte study, company managers consider technical
integration to be the biggest hurdle in the overall integration process. 3

But what role does EA – a discipline capable of deconstructing complex

IT landscapes – play in the M&A process? A 2012 study from the Technical
University of Munich found that architects themselves are convinced that
they can make a valuable contribution to the success of M&A processes.
But can the enduring benefits of EA hold up within large international
corporations in 2021? 4

3 https://www2.deloitte.com/content/dam/Deloitte/us/Documents/mergers-acqisitions/us-mergers-
acquistions-trends-survey-the-future-m-a.pdf
4 https://wwwmatthes.in.tum.de/file/g0cxp4fwh6w7/sebis-Public-Website/Team/Andreas-Freitag/
2012%20Freitag,%20Schulz%20-%20Investigating_on_the_role_of_EA_management_in_Mergers__
Acquisitions.pdf?details=true

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LeanIX Survey 2021 The Role of Enterprise Architects in M&A

80% of EAs are involved in M&A activities FIGURE 4

M&A PROCESS: SCOPE OF EA INVOLVEMENT
Regardless of whether M&A projects made it to corporate agendas in
the last 12 months, the vast majority of surveyed EA experts (80%) stated Involved in 1 stage Involved in 2 stages
that they are involved in M&A processes in some form or another. Of note, Involved in 3 stages Involved in 4 to 5 stages No involvement
LeanIX customers indicate that they see the potential of EA for M&A
processes and at the following stages in particular:

• Identifying possible acquisition candidates 20%

• Identifying possible business units for carve-out
• Due diligence 35%
• Post-merger integration
7%
• Implementing carve-outs

The extent to which EAs are involved in M&A activities (specifically, the five
aforementioned stages) varies greatly. 13%

More than a third of surveyed EA experts report being involved in only

25%
one stage of the overall M&A process; another third is involved in a total
of two stages. Only 20 percent of architects are consulted by their
companies in three or more stages in the M&A process. And a staggering
20% of respondents do not participate in any M&A activity whatsoever. LeanIX M&A Survey (Jan 2021), n=128

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LeanIX Survey 2021 The Role of Enterprise Architects in M&A

EA involvement highest for post-merger integration

EAs are involved in a variety of phases for M&A activities. Survey results
show that post-merger integration is the phase EAs are most heavily
involved. Nearly 90% of architects participating in M&A activities reported
to be actively dealing with post-merger integration. Further, less than half
of the respondents stated that they provide support during due diligence
or the implementation of carve-outs. EAs are often not even consulted
when identifying potential candidates for M&A projects or carve-outs.
FIGURE 5
M&A PROCESS: STAGES OF EA INVOLVEMENT
89%
Post-merger
integration
There's a clear reason why EAs are leveraged most often for post-
merger integration. By specializing in shaping and managing complex
IT landscapes, EAs are a perfect point of contact during the merging,
acquiring or carving out of business units as they can foresee the effects
of M&A activities on IT structures. Additionally, since the post-merger
integration phase is regarded by many as the most critical M&A stage,
many companies choose this phase to draw upon as much expertise
as possible to ensure a successful M&A project via a post-merger
integration.5
Some EAs are consulted with and actively involved in the due diligence
phase (an earlier stage in the M&A process). This indicates that
companies understand and recognize the value of EA management.
With the help of modern EA tools such as LeanIX, relevant data on the
technological infrastructure can be shared and reviewed early on in
virtual yet confidential workspaces. In turn, this data can be used for value
assessments and risk evaluations. As these EA tools continue advancing at

44% 41% exponential rates, so can the impact of EAs in M&A processes.
Due diligence Implementing
carve-outs
13% 9%
Identifying
Identifying
business units
acquisition
for carve-outs
targets

LeanIX M&A Survey (Jan 2021), n=102

5 https://www.bcg.com/capabilities/mergers-acquisitions-transactions-pmi/post-merger-integration

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LeanIX Survey 2021 The Role of Enterprise Architects in M&A

Most relevant EA use cases for M&A

When looking at the relevance of specific EA use cases during M&A
processes, it is evident why EAs are involved in these projects in the first
place. All common EA use cases are considered by respondents to be of
significant importance for M&A projects, with agreement of more
than 70% each.
Survey analysis revealed 94% of respondents agree there needs to be full
transparency of the as-is state of the to-be harmonized IT landscapes
for M&A activities to be successful. As one survey respondent noted, not
every organization has access to the necessary data. Other respondents
highlighted that without transparency, companies lack the foundation
to make sound decisions (i.e., without data-driven information at hand,
integrations cannot even be planned let alone implemented). This includes
not only information on infrastructure and existing applications but also
business capabilities and current dependencies.

FIGURE 6 94% 73% 21%

IT transparency
M&A PROCESS:
ASSESSMENT OF
88%
RELEVANT EA 59% 29%
Application rationalization
USE CASES
84% 51% 33%
Fully agree IT target landscape

Somewhat agree
82% 43% 39%
Application roadmapping

80% 44% 36%

Business capability mapping

70% 39% 31%

Scenario integration

LeanIX M&A Survey (Jan 2021), use cases (from top to bottom): n=106, n=105, n=106, n=106, n=99, n=104

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LeanIX Survey 2021 The Role of Enterprise Architects in M&A
Achieving synergies is at the very heart of many M&A deals. Only if the
newly established business unit achieves greater value than the sum
of the two individual enterprises is such a deal considered successful.
With regard to IT, application rationalization plays an important role.
This assumption is supported by the survey results, in which 88% of EAs
agreed that this use case is indeed relevant. This is unsurprising given
that application rationalization helps companies eliminate redundant
applications and services which in turn leads to direct cost savings.
One survey respondent identified time as a crucial factor and noted
that an early evaluation and management of existing dependencies
is crucial for post-merger integration.
More than 80% of all surveyed EAs agree that the development of both
the target IT landscape and specific application roadmaps are relevant
M&A uses cases. Establishing a framework for the future architecture as
well as for individual applications is an important part of any post-merger
integration.
 
Building a common business capability map for both one’s current and
acquired company is considered relevant by 80% of respondents. In
contrast to the other use cases, the correlation between the scope of the
M&A involvement and the evaluation of the use case becomes apparent.
Just two-thirds of architects involved in only one phase of the M&A
process think that business capability mapping is important. The more EAs
are involved in M&A activities, however, the higher the priority for business
capability mapping. Further analysis showed that 95% of EAs engaged
with three or more phases of M&A and carve-out activities agree to its
importance.
The more enterprise architecture is involved in the M&A process, the
more business capabilities are relied upon to provide management with
a different and better basis for decision-making. One of the architects
surveyed describes this as a “higher level” focus in an M&A process,
meaning that instead of looking at business processes in a parallel manner
and overlooking possible relations, all existing relations are holistically
revealed at a glance.
Around 70% of the respondents said that developing scenarios and
plans for post-merger integrations is important for any M&A project.
It can be assumed, however, that the lower relative ranking of this use
case (compared to the other use cases) will increase in the future. On the
one hand, some respondents already explicitly point out the necessity
of such simulations. On the other hand, EA tools are making significant
in-roads in this area. In 2020, LeanIX launched the Business Transformation
Management (BTM) module, which enables EAs to visualize interactive
timelines to see the "to-be" states of IT landscapes as it relates to the
"as-is" state. This module fosters the collaboration when planning and
implementing transformation initiatives.
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LeanIX Survey 2021 The Role of Enterprise Architects in M&A
EA challenges
during the M&A process
The enterprise architects who participated in this study identified
various challenges to overcome in order to successfully involve enterprise
architecture in the M&A process. For a successful post-merger integration,
both parties – meaning the acquiring and the acquired company – need
to understand that the EA team is there to support them. As EAs have
sound and transparent data plus a detailed picture of the IT landscape,
they can streamline the M&A project by preventing lengthy discussions
about preferred IT assets. Time restraints can also pose a challenge, and
many respondents complain that unrealistic planning complicates the
integration process. In all, survey data confirms that it is foolish to think
that a post-merger integration can be handled without interrupting
6
day-to-day business.
6 https://www.bcg.com/capabilities/mergers-acquisitions-transactions-pmi/post-merger-integration
Conclusion: Increase in M&A activity
has implications for EAs
A key finding of the LeanIX M&A Survey 2021 is that most EAs report to
have already secured a place at the table during M&A projects in their
companies – and rightfully so. The increase in M&As predicted by experts
goes hand in hand with rising requirements, both for the evaluation of
potential acquisition candidates and for the implementation of the M&A
deal itself. Currently, most EAs are involved in post-merger integrations.
The growing importance of having data-driven and reliable information
at hand in the run-up to a transaction will expand the responsibilities
of architects in the M&A process in the coming years. EAs can use their
ever-increasing value in this area as a catalyst for other projects. Above
all, however, EAs have more opportunities than ever before to establish
themselves as reliable business partners.
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LeanIX Survey 2021 The Role of Enterprise Architects in M&A

Further Information to the Study

In December 2020 and January 2021, a total of 128 EA experts participated

in an online survey on M&A conducted by LeanIX. All respondents work
in the field of enterprise architecture on behalf of companies within the
LeanIX customer portfolio. For this survey, LeanIX contacted a total of
323 companies from various industries. The participant response rate
is thus over one third. The varying case figures shown in the charts stem
from respondents who could not/would not provide information to
individual questions.

www.leanix.net

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