Collaboration software platforms change how employees and partnered companies interact, largely for the better. But with every notification appearing in the right-hand corner of a computer screen, productivity can diminish.
It's an oxymoron software providers dance around and one that Atlassian has taken steps to avoid with new solutions, talent and acquisitions.
Acquisitions "not only accommodate the needs of business but actually help transform what's possible for the company," said Archana Rao, CIO of Atlassian, in an interview with CIO Dive.
Rao became CIO in February 2018 and inherited a strong team, but it lacked the right processes and practices to deliver business outcomes, she said. Once her team started speaking the language of the business it showed leadership what IT can do.
Now "we absolutely have a seat at that table," she said. Atlassian's IT team is more involved in acquisition conversations than ever before.
IT has a first-hand view and knowledge of how to scale Atlassian's platform to accommodate purchased companies. The promise of an acquisition is rooted in the balance between introducing cohesive solutions for Atlassian customers and new capabilities for the backend.
Jumping into acquisitions
Rao joined in time to oversee the $295 million acquisition of OpsGenie, a modern incident management company, in September 2018. OpsGenie had a similar vision and "open company" culture to Atlassian, said Rao. The companies shared a "stronger together" and "selling together" mentality.
The acquisition cemented Atlassian's focus on the threat of downtime. The collaboration company estimated about 194 years' worth of downtime was logged in 2018 for companies, an 87% uptick from 2017.
The reason for the increase in disrupted services was because companies are adopting the cloud-first mentality and using software as a service solutions.
OpsGenie's technology alerts the right teams, often chaos engineers, for diagnosing and resolving the issue in an attempt to reduce downtime. The same day the company announced its acquisition, it announced the launch of Jira Ops, allowing for Atlassian's Jira customers a "one-stop-shop to manage incident response," according to the announcement.
Right before the OpsGenie acquisition, Rao created a M&A playbook to avoid reinventing the wheel every time an acquisition takes place.
About 80% of all M&A activity is the same, like getting new employees laptops, according to Rao.
The playbook allows for nuances in acquisitions but mostly stands as a guide with questionnaires for assisting the integration process. "We're reducing duplication and getting a little bit more efficient," she said.
Earlier this year Atlassian announced the acquisition of enterprise agile planning software company AgileCraft for $166 million. Jira is already the "backbone" for setting workflows for engineering teams across Atlassian's customers, but the addition of AgileCraft creates a "critical linchpin" for larger organizations to move faster with agile processes, according to the announcement.
How long does an integration take
The time the integration process takes depends on the purchased company. The new parent company needs a complete vision from end-to-end processes, including go-to-market, sales, marketing, support, HR, financial and products.
Some lingering acquisitions, like Trello in 2017, have not been fully integrated as a single system across Atlassian, according to Rao.
The playbook crafted before OpsGenie is "beginning to move the needle on how fast we can do some things," she said. But in the time being, Rao operates with the goal of integrating all of Atlassian's financial systems "before the first quarter ends that we hit after we acquire a company," she said, "and that's doable."
The remaining processes, including sales, commerce, marketing are harder to integrate because Atlassian doesn't "have this concept of a platform," said Rao. The goal for next year is to have a platform with all the capabilities "we can think of within the business model" so the company can integrate seamlessly with other companies with similar business models.
The conversation changes, however, when the acquired company has a different model, which refers to:
What are the company's products?
Who does it sell them to?
How is the company deployed?
How does it monetize itself?
The business model is "not a lot more than that" and understanding that allows Atlassian to think through if it's a good fit, whether that means Atlassian's existing business models supports the acquired company or not.
Rao has to evaluate whether Atlassian should change its business model or extend it. Extending the model to accommodate integrations will take longer.
Atlassian has a "very big direct business" without a large sales team, "we're known for this," said Rao.
If Atlassian acquires a company with a large sales team, the question for Rao becomes:
Do we need to have a sales center?
Do we need the systems and processes to support a "full-blown enterprise sales team?"
If yes, what would the new sales center look like?
The answers to these questions drives how Atlassian pursues acquisitions and how Rao and her team carryout integrations. "We will do what it takes," she said.
Ideally, Rao's process for integrating acquired companies wraps up after 90 days. "It is pretty aggressive, and most companies take a year, sometimes more than that" to fully integrate a company, but with the support and aligning company cultures, it's achievable.
The companies Atlassian acquired before Rao started as CIO have been relatively small, requiring a reliable point of contact throughout the integration process and beyond. It also makes the onboarding process less painful.
Employees are usually the piece of an acquisition "that people ignore, at their own risk," said Rao. "The reason you're doing the acquisition is not just acquire the product, but acquire the talent."
Conversations need to happen between the parent company's CIO and the acquired company's CIO. However, oftentimes the conversations don't occur between a formal CIO, it's "whosoever running what is construed as IT" because "a lot of times it just sits in one of the business functions," said Rao, referring to smaller acquired companies.