Friday, May 17, 2024

The Extranet’s Role in Merger Mania

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Everyday another merger makes the headlines, raising important questions about how business as usual can continue when data and systems are being consolidated, replicated, integrated, and replaced. Mergers and acquisitions (M&A) are all about change, whether in production schedules, product offerings, management, or infrastructures. One of the best ways to manage resource sharing and customers, partners, and vendors throughout the conversion process is to deploy an extranet.

For strategic IT managers who must consider both the technical and business implications of letting new, diverse users into a protected network, extranets can be the boon to help steer companies through much of the unpredictability. When the politics of M&A are well-managed through innovative applications of technology like extranets, the implementers (CIOs, Internet architects, network managers, etc.) often become the business leaders CEOs turn to for advice. By successfully implementing an extranet, IT leaders help companies stay competitive by providing the right people with easy access to the right information and applications, 24 hours a day. To best increase business returns, network resources should be shared, yet only when the proper management and security measures have been taken.

The Management and Security Challenges of M&A

If one firm acquires or merges with another, how is application access managed for the new participants? What tools are available to help address these and other concerns? The term extranet has been defined in various ways, but most commonly as the sharing of IT resources (data and applications) among independent enterprises over an IP-based network. Here, independent enterprises can mean subsidiaries, partners, customers, and other key business contacts. To build a full-scale extranet, companies usually start by deploying some type of management and security platform to which other extranet applications are added.

Aventail ExtraNet Center is a unique solution designed specifically to address the management and security challenges of extranets, including those of consolidated companies. It is similar to a virtual private network, but a VPN alone (typically an encrypted tunnel used to link branch offices) does not provide the fine-grained access control needed to govern user privileges on the extranet. Aventail ExtraNet Center lets companies identify users, not just machines, and set access policies based on a variety of parameters, such as time of day, destination resource, type of authentication used, and/or group affiliation. While VPNs tend to assume that users at a given IP address can share the same set of permissions, Aventail ExtraNet Center takes into account a more diverse user base with unique authorization needs. These features are useful in the M&A scenario both prior to a merger or acquisition, when only a select few people should have access to corporate resources, and post integration when more people in varied roles, such as development and marketing, need different levels of access to specific resources.

With regard to meeting IT needs during and after mergers or acquisitions, the two companies that form one are likely to use different business processes. Integrating the IT systems of the two companies, along with the partners, suppliers, and customers of both firms, presents challenges that may be greater than the sum of those faced individually by the two firms. Making such complex collaborations work to the benefit of all parties is a task ideally suited to Aventail ExtraNet Center. The key to a successful merger is to provide dynamic, flexible, authorized access that does not require either organization to make sacrifices in their security policy. Aventail ExtraNet Center’s ability to support all IP-based applications, not just HTTP, gives organizations the flexibility to support Java and object-oriented applications, as well as valuable legacy and custom applications, in addition to HTTP.

Effectively merging two firms’ IT systems requires tools and systems that can be easily and effectively modified from pre-merger configurations to post-merger ones. For example, during merger negotiations, the two firms are largely concerned with privacy of information, meaning that no information should be made public during this period. Immediately after the merger, limited information sharing between public relations officials can be beneficial to enable early co-marketing of a unified message. Soon thereafter, another group of individuals (e.g., production personnel who need to begin co-developing) are likely share a different subset of information between the two entities.

Aventail ExtraNet Center enables this kind of phased approach. It allows the two firms to quickly define levels of trust and map them to the extranet. Out of the box, Aventail ExtraNet Center supports a broad range of authentication and encryption methods and offers an intuitive logic and interface that allows administrators to easily create and enforce sophisticated security policies.


IT is one of the most essential strategic elements of seamless integration between merging companies. Increasingly, CEOs will turn to their IT teams to make important business decisions. Extranets can greatly simplify the process of rolling out integrated systems within a compressed time frame. They can help ensure that service levels are maintained during consolidation while minimizing IT headaches.

As many IT professionals are aware, extranets can provide a wide range of business benefits beyond merger requirements. They allow organizations in virtually all industries to collaborate with partners in real time, share applications with users in multiple locations, automate supply chains, and optimize business processes. In turn, these capabilities improve customer service and loyalty, improve productivity, and generate new business opportunities. These benefits go beyond network cost savings to provide tangible, strategic return on investment to the enterprise: reduced cash-to-cash cycle times, improved retention of high-value customers, and greater bottom-line results in all areas of business partnership.

Reprinted with permission from The Aventail Corporation

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