You are buying another brokerage, you've negotiated the terms and you've finally cut the deal. The acquisition of that competitor's office is going to finally happen. Congratulations!

Now you are thinking about changing the building sign; getting new business cards and yard signs for the agents; how to announce the deal; etc. This is all of the surface stuff that people see. But have you thought about the engine that runs the machine? Your technology, your back office accounting systems, your web integration to the MLS/Boards and every tool that actually makes your company run! These essential tools are often overlooked until the day after. And what you don't see is what creates challenges!

Here are some things to consider:

When integrating one office to a new environment, the back office systems are often not the same. And, even if the two companies are with the same technology partner, the service level or menu of products can be different and will require some advanced planning to seamlessly integrate.

The MLS systems can be challenging and will also require some advanced coordination between you, the other party, your MLS, real estate boards and your technology partner.

Sensitivity and confidentiality prior to your announcement are critical and you should ask your technology partner and any employees involved to sign a NDA.

There are costs in blending systems behind the scenes and they need to be factored in to your calculations. And not just hard costs, but staff time as well.

There was an article in Bloomberg Businessweek on the Continental/United merger. There was a quote that went "information technology tends to be the thorniest part of an airline merger." This is true in any business. You are running a machine and so was the brokerage you acquired. It's not just what's on the surface you have to consider, it what's under the hood!

So what exactly does this mean? Here are some examples from real life...

• The company that was acquired had a system that allowed a "monthly rolling average" on commission splits. The acquiring company's accounting system couldn't handle that and the acquired agents were up in arms
• The acquiring company downloaded agent listing data from their local MLS. When the deal closed, the listing data was still attached to the agent's old broker ID and couldn't be downloaded into the new front desk system for showings with the new broker's ID. It took three days to fix this--three days without agent's listings showing on the brokerage website!
• The agents at the acquired company were used to having their commission checks deposited directly to their bank account and the acquiring company could only print the checks – the acquiring company didn't show the agent's year-to-date totals on the commission checks and the acquired agents were used to seeing that and were unhappy it was gone.
• Not all systems are computerized either. One company filed paperwork on deals by address and another by agent. Not a small challenge to overcome, surprisingly enough!

The truth is that every company sets up systems, both computerized and manual, and each system processes activity and generates results. You need to take into consideration an operational audit as part of your due diligence during acquisition, asking the five "W" questions: Who, What, When, Where and Why. An excellent example is the agent's commission checks and how they are handled. What are the expectations for turnaround on payments? "I could turn in a deal at my old office and get paid tomorrow. Now I have to wait three days to get paid," is not something you want to hear from agents after a merger.

And the last thing to consider is that these systems don't run by themselves. All of them require staff to operate and getting staff buy-in is important. That doesn't mean that your staff has the say-so in what you are doing, that's your job. But they do need to accept what is happening and be working towards the goals you have set. If you have expectations for what is going to happen, you have to make sure the people doing the work have the same expectations or you can find yourself in a heck of a mess!

To view the original article, visit the Lone Wolf blog.