Author: Doug Johnstone, Principal Consultant at Digital Pivot
Date: January 2025
The Journey to Post Merger Growth
This is the second instalment of five blogs exploring M&A challenges within the IT Services and Consulting industry, describing what I found and how senior leaders can take action to drive sustainable growth through authentic Post merger integration.
I’ve spent my entire career working with professional services organisations, and over the past few years, I’ve watched a surge of acquisitions in IT services and consulting businesses. Private equity firms and investors have been snapping up companies, betting on growth, scale, and synergies. But the reality? More often than not, 1 + 1 doesn’t add up to 3. In fact, it quickly becomes less than 2.
over 70% of acquisitions fail to deliver the expected value
HBR
Instead of growth, many of these acquisitions lead to stagnation, loss of key people, valuable IP, cultural clashes, and customers slipping away. The promises of synergy and efficiency turn into cost-cutting exercises, and the business ends up in worse shape than before. Having seen this play out time and time again, I started digging deeper into why so many acquisitions fail to realise their potential.
Introduction
Recessionary pressures and AI-driven disruption have made revenue growth a significant challenge for IT service providers and consulting firms. Simply merging two companies doesn’t guarantee an automatic increase in sales. In fact, without a cohesive strategy, valuable cross-selling and upselling opportunities can go unnoticed or unfulfilled. This blog highlights the strategies and benefits of a coordinated cross-sell and upsell model, showing how a unified approach across the merged entity can unlock new revenue channels and enhance customer satisfaction.
Why Cross-Selling and Upselling Matter More Than Ever in a Recessionary Environment
- Protecting and Expanding Revenue: In times of economic uncertainty, organisations look for sustainable ways to maintain and grow their revenue. Cross-selling and upselling to existing clients can be more cost-effective than acquiring new customers.
- Building Deeper Client Relationships: When you offer a broader range of complementary solutions, you become a strategic partner rather than just a vendor. This leads to stronger client loyalty and long-term retention.
- Differentiating in a Competitive Market: With AI and emerging technologies disrupting traditional business models, showcasing integrated services helps position your organisation as forward-thinking and capable of meeting evolving client needs.
Common Pitfalls When Multiple Business Units Attempt to Collaborate
- Lack of Clear Ownership: When no single team is responsible for driving cross-sell or upsell, opportunities slip through the cracks.
- Competing Incentives: Different business units might prioritise individual targets, leading to territorial behaviour rather than collaborative selling.
- Disconnected Messaging: Clients receive conflicting information if marketing and sales materials are not aligned post-merger, causing confusion and lost deals.
Overcoming these pitfalls requires a centralised approach—ensuring everyone works with consistent data, integrated processes, and a clear view of shared objectives.
The Role of a Centralised Services Catalogue in Driving Synergy
A centralised services catalogue is a powerful tool that standardises how offerings are presented both internally and externally. Here’s how it helps:
- Consolidated Information: Sales teams can quickly identify which services complement each other, making it easier to suggest additional solutions to clients.
- Efficient Onboarding and Training: New hires can learn about all offerings across the organisation from a single source, speeding up the sales cycle.
- Consistent Messaging: A unified catalogue minimises confusion and ensures every business unit presents solutions in a cohesive, client-focused manner.
By maintaining an up-to-date, group-wide services catalogue, IT service providers can eliminate guesswork and empower sales, presales, and consulting teams to seamlessly cross-sell and upsell.
Concrete Examples of Effective Cross-Sell/Upsell
- Managed Services + Cybersecurity Audit:
- Cross-Sell Opportunity: If your organisation offers ongoing IT management, suggesting a cybersecurity audit (provided by another business unit) can address a client’s evolving risk landscape.
- Cloud Migration + Data Analytics:
- Upsell Opportunity: After migrating a client’s applications to the cloud, propose data analytics services to help them gain deeper insights and drive more value from their newly consolidated data.
- Software Development + Ongoing Maintenance & Support:
- Cross-Sell Opportunity: Once a new software solution is delivered, offering ongoing maintenance and support services can create a long-term revenue stream and help you remain embedded in your client’s operations.
By linking complementary solutions, you not only expand the revenue potential but also strengthen client relationships as a trusted adviser capable of end-to-end problem-solving.
How Post Merger Integration Services Facilitate a Seamless Transition
A structured Post Merger Integration (PMI) program, such as that offered by Digital Pivot, provides the framework to streamline cross-sell and upsell processes. Here’s what a well-executed PMI strategy typically includes:
- Consolidated Sales and CRM Platforms: Integrating data and tools reduces silos, ensuring teams work from a single source of truth.
- Unified Go-to-Market (GTM) Strategy: By developing a cohesive GTM plan, all business units can align on messaging, pricing, and promotional activities.
- Group-Wide Training and Enablement: Equipping teams with the knowledge and confidence to position multiple offerings encourages proactive cross-sell and upsell efforts.
When your newly merged organisation operates with shared KPIs and clear incentives, it becomes simpler to uncover and capitalise on untapped revenue opportunities.
Next Steps
By centralising and aligning your service offerings, you can capture untapped revenue streams and strengthen your client relationships across all business units. Whether you’re dealing with the complexities of a recent merger or aiming to maximise existing cross-selling opportunities, a well-defined Post Merger Integration strategy can be the key to securing stable growth in today’s fast-evolving market. If you’re ready to explore how Digital Pivot can guide your organisation through this journey, contact us to learn more.
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How to unlock Post Merger Growth:
- Why Post Merger Integration is Crucial in Today’s Rapidly Changing IT Landscape
- Streamlining Cross-Sell and Upsell: Unleashing New Revenue Opportunities
- Building a Unified Services Catalogue: The Key to Empowering Sales and Presales Teams
- Crafting an Integrated GTM Strategy: From Fragmented Practices to a Unified Vision
- Measuring Success Post Merger: Driving Continuous Improvement and Long-Term Growth