Q&A: Leading IT in a high-volume M&A environment

AssuredPartners is a full-service insurance broker providing commercial insurance, risk management, and employee benefits. The company, which has more than 8,500 employees, plans to continue growing by acquisition, and consolidating the global insurance market.

I recently spoke with CIO Sankha Ghosh about how he has made IT part of the acquisition machine at AssuredPartners and how his team still finds time to innovate. What follows is an edited version of our conversation.

Martha Heller: AssuredPartners was founded in 2011 and just crossed the $2 billion revenue mark. What is behind that growth?

Sankha Ghosh: You can think of our company as a serial acquirer, where 90 percent of our growth is through acquisitions. Last year, we acquired 53 companies for a total of $325 million in revenue. In the past, the acquisitions have been small to mid-size companies, but they are getting bigger. We are making more acquisitions in Europe than we did in the past; we now have presence in multiple countries. Our goal is to consolidate the global market.

What are the keys to running an acquisition machine?

Most important is to have a dedicated M&A team. I have an M&A leader who sits on my transformation team. He came to IT from the business, and he has both a technology background and a deep understanding of the nitty gritty of our business processes. He has people from infrastructure, cloud, cyber security, and application development on his team.  All they do is M&A.

When I joined AssuredPartners last year, I found that IT was more of an afterthought for acquisitions, when we needed to be a part of the discovery. Today, IT plays a major part in the acquisition machine. We work up front with the deal team on due diligence because every business we acquire has a different technology environment. By being up front and learning about the technology, how it is supported, and the team resources, we can create a tight integration plan. This way, once the deal is closed, we are not scrambling.

In the last year, we have focused on creating an acquisitions assembly line. We looked at many of the deals we did in 2021 to understand the synergies and themes and where we can automate and make improvements. As a result of this work, roughly 80 percent of our retail acquisitions are cookie cutter from an IT perspective. 

What are the top questions to ask before you can move forward with an acquisition?

What is the company’s cyber security program? How is it governed? Where are the data sets? Are the platforms with SaaS providers or hosted in-house? Who are the vendors and what are the contracts like? What are the resources on the team?  What is the employee experience like? What business systems are in place to support key processes?How is data collected and used in the organization? What processes are in place to manage customer choice and rights? What regulatory systems have been implemented? How is the IT organization structured? What is the overall IT ecosystem—infrastructure, architecture, integrations, disaster recovery, data management, helpdesk, etc.? What is the IT roadmap? What IT projects are underway? What legal entities are providing/contracting/owning hardware, software and/or facilities? What payment methods are used? How are remote workers managed?

What is challenging about doing an acquisition?

We do three or four acquisitions in parallel with the goal of integrating them completely into our environment in 30 to 45 days. It used to be challenging to convince the management teams to commit to this timeline because they were focused on their earnout window, where they need to generate a certain amount of revenue. They were worried that the integration would disrupt their business, that they would not be able serve their customers and, therefore, would miss out on their earnout.

That earnout goal makes sense from a business standpoint but not for technology, especially cybersecurity. We can’t be at the mercy of the weakest link.

So, my team put together a due diligence roadshow for the people at the company we are interested to acquire, where we tell the story of why they should come onto our platform. We show them how they can leverage our scale, get access to great tools, and improve the employee experience. For example, instead of having one person support IT, they would have 10.

It was a hard sell initially, but not anymore. Today, the CEOs of companies we’ve acquired now speak to other new businesses about the advantages of coming onto our platform.

What advice do you have CIOs who are going into a high-acquisition environment?

It’s all about change management. You need to be out there telling your story and showing the management teams what they will get out of coming onto your technology platform. The story needs to be outcome-based: here is a list of services you will receive, and here is what will happen if you don’t come onto our platform. For example, if you have security issues and you are not on our platforms, the costs from those issues come out of your bottom line. You are better positioned to make your earnout goals with us managing your security than on your own.

It is also critical to make sure your IT environment is solid, scalable, and stable. When I joined the company, we decided that there will be no data centers. For my first six months, we just solidified our cloud and agile capabilities, so that we could truly scale this to bring all of these new companies on board.

With all of these acquisitions, how do you have the focus to innovate?

While acquisitions drive most of our growth, we also want to grow seven to nine percent organically while maintaining margin efficiency. We need to innovate in process automation to achieve that goal.

In addition to an M&A group, I have an R&D group in my transformation organization. Their job is to work with their business partners to identify automation opportunities. Currently, we are working on at least ten RPA [robotic process automation] projects, for example.

I also run an Innovation Council and an IT steering committee where the business presents a one-page project charter. These include a business case, a cost-benefit analysis and a description of the resources required.  We present the charter to the executive committee before we spend any money on it. That’s how we curate innovative ideas from the business.

One example of those business cases is to automate policy checking rather than having to read through a 70-page policy in order to renew a customer policy. With all of the information entered manually, there are many opportunities for mistakes. The RPA tool will ingest and check the critical data elements in the policy before automatically sending it to the carrier without any manual intervention.

None of this could work if your business partners aren’t locked in. What is your approach to business engagement?

For my first six months, I visited every key office and met with every key leader across 50 states and in Europe. At first, I listened and played their feedback back to them. They saw a lot of room for improvement in their partnership with IT. That led to formation of the IT steering committee, which allows the Executive Committee to work together to prioritize investments. We set up criteria for prioritization, which our business partners use to vet ideas before even coming to the forum.

Through the Innovation Council and the IT Steering Committee, we are living the vision that the only technology worth supporting is technology that drives our growth.

IT Leadership, Robotic Process Automation