So you’ve acquired a new company, or you’re preparing for a merger and acquisition (M&A). It’s important to remember that efficiency is essential for a successful M&A. Typically, a post-merger that takes less than six months has a higher chance of success, while a post-merger that goes beyond 18 months has a low chance of being successful.

Even so, identity and access management teams (IAM) might agree that post-merger integration is a long and complex process, especially when it is a sudden acquisition. IAM teams must test, prepare and communicate with users to create a smooth process. That’s why IAM solutions and programs are essential to tackle the challenges that arise during a merger. This guide explores the risks and challenges of mergers and acquisitions and IAM solutions to counter them.

5 Risks That Arise From a Sudden Closure

During a sudden acquisition, your IT team might feel overwhelmed with the various information they need to take in and the tasks they must carry out. They become tasked with handling a complex M&A regulatory process and large amounts of sensitive financial data. With so much work at hand, it’s essential to make serious considerations concerning the potential risks when it comes to identity and company data.

1. Data Transition

A sudden closure means that IT teams need to transfer a large amount of customer data in a short amount of time. Simultaneously, IT professionals must pay careful attention to how they carry out these tasks, as cybercriminals may take this opportunity to steal sensitive data.

2. Communication

Due to the sudden nature of a rapid acquisition, it’s essential to maintain clear communication with employees, customers and partners to ensure everyone is on the same page. Lack of communication might result in a damaged reputation, loss of consumers and targeted scams.

3. Unauthorized Access

Rapid transitions make it easy for IT professionals to get confused about who can access sensitive data. They need to be mindful of who should have access to data, or cybercriminals might take advantage of the situation to breach data or steal someone’s identity.

4. Regulatory Compliance

It’s essential to comply with federal and company regulations to avoid putting customer data at risk during a sudden acquisition. IT leaders must review these regulations and ensure the transition process complies with them to protect customers’ identities.

5. Phishing Attempts

Sudden closures are easily susceptible to phishing attacks. These create the perfect opportunity for cybercriminals to impersonate the acquiring company and convince consumers or employees to reveal sensitive information like login credentials or banking details.

Top IAM Challenges During an M&A

Identity management processes following an M&A can be complex and time-consuming without the right tools and technology. Here are the top four IAM challenges during a merger and acquisition and some best practices to streamline the process.

1. Managing Multiple Identities

When both the acquiring and acquired company have a directory of stored identity data, synchronizing the data can be challenging for the IT team because it takes up a lot of time and costs. At the same time, managing separate identity repositories manually can increase errors and widespread duplication. Some challenges in identity data migration may also occur when both companies have varying applications and directories.

Fortunately, IAM solutions help centralize and automate identity management without consolidating the directory. IAM migration solutions allow you to seamlessly transfer a portion or all of the directory, whether a Lightweight Directory Access Protocol (LDAP) or Active Directory (AD), to the acquiring company’s directory. This can help your company save time and costs while streamlining the process.

2. Streamlining Employee Onboarding and Access

Employees must have access to the relevant software and applications to perform their jobs effectively. Still, providing them with the right technology can be time-consuming when onboarding hundreds or thousands of new employee user identities from the acquired company. This creates longer downtime and affects the quality of service for consumers, resulting in decreased customer satisfaction and increased employee frustration.

An IAM solution can provide employees with the resources to view and access real-time data like in a standard directory. IAM technologies can also automate account creation and management through multi-directory identity and resource administration.

3. Prioritizing Cybersecurity

During post-merger integration, the acquiring company is likely in its most vulnerable state. This makes it easy for cybercriminals to take advantage of the situation. On top of this, the acquired company may have insider threats, dated security architecture, unfamiliar compliance regulations and poor security practices that are foreign to the acquiring company.

Organizations can counter this by knowing the acquired company’s processes and building contingency plans for any potential issues. With additional help from IAM solutions, IT teams can heighten security for active directories with a proxy firewall.

4. Integrating Operational Systems and Technologies

what is the biggest challenge during a merger

One of the biggest challenges during a merger is combining two companies with inconsistent software, hardware and network systems. This can be a challenging and time-consuming process for IT teams. System integration also means migrating users will create workload delays, issues and disruptions.

This makes it essential to integrate data assets quickly. At the same time, an unclear integration process after a merge can lead to failure, so the process must be well-defined. IAM solutions allow the organization to strategically plan the integration and adapt quickly.

The Essential IAM Programs to Have During an M&A

Organizations must use effective access management programs throughout and beyond the process to maintain the efficiency and security of data when preparing for a merger and acquisition. According to PWC, 72% of businesses believe that technologies are a very important or the most important part of driving a successful M&A integration process. Some essential programs to consider integrating include the following.

1. Automated Provisioning

With a merger and acquisition, the user life cycle starts with the newly acquired employees joining the company and ends with their departure from the business. One of the best ways to handle these bulk provisioning tasks and other bulk changes is through a cloud provisioning protocol like System for Cross-domain Identity Management (SCIM) 2.0. This protocol simplifies the management of identities across multi-domain environments.

2. Identity Analytics

Identity analytics offers an excellent way to monitor company security insights, such as program access, authentication and passwords and counter issues without disrupting employee productivity. Some IAM programs will provide a smart dashboard to gain access to information and a single directory to tag and collect data.

3. Data Leakage Prevention

Some IAM programs come with data leakage prevention through LDAP proxy firewalls. Virtual Identity Server (VIS) LDAP proxy firewalls prevent employees from receiving more confidential information than they need to access. It instead allows employees the right amount of access to IT resources relevant to their jobs and the correct confidential data when and where they need it.

4. Role-Based Access Control

To ensure that all newly acquired staff members have the right access and resources specific to their role, IT teams need to know what access to grant and remove during the M&A planning stage. IAM solutions can help with various access control functions, such as multi-factor authentication and authorization, virtual identity servers, single sign-on and LDAP firewalls.

5. Privileged Accounts

Privileged access management solutions help IT teams prevent attacks on vital systems during an M&A from within a company and externally. This program ensures that only privileged users gain access to administrative commands and information and prevents unauthorized use of these functions.

Counter IAM Challenges during a m&a

Counter IAM Challenges During a Merger With Optimal IdM

Maintaining the security and longevity of a newly merged business is critical — as we’ve seen, IAM programs are an excellent way to do so during this crucial transitional period. Optimal IdM provides various identity access management solutions that offer security, productivity stability, speed and room for scalability.

Features such as LDAP migrations, multi-factor authentication, LDAP proxy firewalls and delegated administration are integral in adding security and streamlining the post-merger process. Whether you need automated provisioning or privileged account management, contact our expert team at Optimal IdM for quality custom solutions that will help you overcome the challenges of mergers and acquisitions.


  • The database in which all of your organization’s sensitive identity data is stored.
  • A digital ledger in which digital transactions are recorded chronologically and publicly.
  • Securely managing customer identity and profile data, and controlling customer access to applications and services.
  • The means of linking a person's electronic identity and attributes, stored across multiple distinct identity management systems.
  • A legal framework that sets guidelines for the collection and processing of personal information of individuals within the EU.
  • The policy-based centralized orchestration of user identity management and access control.
  • An authentication infrastructure that is built, hosted and managed by a third-party service provider.
  • A security system that requires more than one method of authentication from independent categories of credentials to verify the user's identity for a login or other transaction.
  • A global provider of innovative and affordable identity access management solutions. 
  • Managing and auditing account and data access by privileged users.
  • Tools and technologies for controlling user access to critical information within an organization.
  • An authentication process that allows a user to access multiple applications with one set of login credentials.