Sep 9, 2024
Sep 9, 2024
As SaaS becomes more intertwined with how a business operates, the value of a successful merger no longer hinges solely on the numbers but on understanding the SaaS in use and the unseen risks it brings.
In a year when M&A activity dropped by 15%, the deals that did happen heightened their focus on the financials. However, as SaaS becomes more intertwined with how a business operates, the value of a successful merger no longer hinges solely on the numbers but on understanding the SaaS in use and the unseen risks it brings.
When two companies merge, they often underestimate the sheer complexity of their SaaS ecosystems, creating a massive, unmonitored attack surface ripe for exploitation. Shadow IT—unsanctioned applications flying under the radar—can expose the organization to significant cyber threats if left unchecked. Failure to quickly identify and manage these risks can lead to a cascade of security vulnerabilities that compromise the integration process.
The worst part? Without knowing where the risks are, there’s no chance to mitigate them. In this article, we explore M&A integrations from a SaaS security perspective to equip you with what to look for and how to mitigate the risks of your new acquisition.
Identity risks can undermine the success of any merger. These risks stem from how user identities and access rights are handled in the newly merged organization, and without the right strategy, they can turn a promising deal into a security nightmare. If not adequately managed, identity risks can lead to unauthorized access, data breaches, and costly compliance failures, threatening the entire success of the merger.
One of the most overlooked threats is dormant accounts—unsecured, forgotten accounts that haven’t been deactivated but still hold the keys to critical systems. Hackers love them. Dormant accounts are easy targets, offering a direct line to sensitive data without much effort. If you let these accounts linger, you’re inviting an attack. Add to that the issue of inconsistent access policies between the merging organizations, and you’ve created the perfect opportunity for unauthorized users to slip through the cracks and access what they shouldn’t.
Then there’s shadow SaaS—applications employees use without IT’s approval or awareness. Shadow SaaS is a serious security liability that dramatically expands the attack surface. Hackers can infiltrate these unsecured apps, making the merged entity vulnerable from the inside out. Once they’re in, hackers can move laterally, accessing critical systems, siphoning off data, and exposing the company to catastrophic breaches, financial fallout, and irreparable damage to its reputation.
Shadow SaaS is also the enemy of secure access control and compliance, making it impossible to meet regulatory standards. After all, how can you adhere to industry regulations when you don’t know what apps you’re running? One unsanctioned and unsecured app that accesses sensitive data can derail your entire compliance program, leading to hefty fines, legal troubles, and unnecessary stress.
Tackling these identity risks requires a proactive approach: conducting regular audits, standardizing access policies, and purging dormant accounts to ensure the blended organization is secure and compliant.
Post-merger IT integration isn’t just about connecting systems—it’s about uncovering the unknown. One of the most significant hurdles is the lack of visibility into the new company’s IT environment, with crucial details often concealed until after the ink dries on the deal. This lack of transparency can hide serious risks—misconfigured systems, shadow IT, and dormant SaaS accounts—that can quietly infiltrate and compromise the acquirer’s infrastructure. Your job is to unearth and defuse the risks; use this post M&A integration checklist to get started.
Conduct a thorough discovery process to expose the unsanctioned and unmanaged SaaS applications employees are using. Once identified, these shadow apps need to be assessed for risk, and any unnecessary, redundant, or high-risk applications should be removed to tighten security and optimize costs.
Evaluate how applications are accessed and prioritize those requiring enhanced identity security measures. Implement multi-factor authentication (MFA) and single sign-on (SSO) to strengthen access controls, ensure compliance, and minimize security vulnerabilities.
Post-merger, there is no room for confusion about who can access what. Unify identity security under one system to create a single source of truth and consolidate identities and applications. Consolidating identity providers (IdP) allows your team to manage all user identities properly, ensuring that employees have access to the SaaS they need while closing off potential entry points for attackers.
Begin with a comprehensive discovery process to identify all users and applications within the merged entities, ensuring no gaps or vulnerabilities are left exposed. Prioritize migrating critical users and applications to avoid disruption and maintain business continuity. A unified identity and access management (IAM) system will streamline operations and ensure all users adhere to the same security policies. Additionally, centralizing IAM helps control access to sensitive data, reduces the risk of unauthorized access, and ensures compliance with regulatory standards.
Mitigating SaaS risks goes beyond evaluating vendor-related risks and compliance—it’s about prioritizing identity risks and taking action to secure your SaaS accounts in your unique environment. SaaS applications are deeply woven into the fabric of organizational workflows, and the real threat lies in the user identities that access these platforms and how these applications are integrated into your organization. Knowing that a SaaS vendor has SOC 2 or ISO 27001 certification means little if a user account isn’t properly secured and gets hacked. The breach of an overlooked test account at Microsoft shows that even organizations with mature cybersecurity programs can become vulnerable if accounts are left unprotected or unmonitored. And that’s why SaaS identity risk management is so important: to contain the incoming SaaS risks, you must understand potential weak points in access controls and authentication.
Using identity as the control point makes it easier to uncover shadow SaaS and pinpoint high-risk applications where weak identity management practices could lead to security breaches. Case in point: as NFP, an insurance brokerage and consulting company, expanded its service lines and wealth management portfolio, the diversity of SaaS services across its new blended business grew exponentially. The one constant amidst this complexity was identity. To get control of SaaS sprawl and the incoming SaaS-related risks, NFP turned to Grip for identity-based SaaS discovery. Grip’s SaaS Security Control Plane enabled NFP to uncover critical user-SaaS relationships and automate the offboarding of risky SaaS services, eliminating dangling access, zombie accounts, and redundant tenants. Grip’s automated offboarding not only removed the risk of unauthorized access but also empowered NFP’s security team to stay ahead of M&A integration challenges, allowing them to focus on efficiently incorporating new acquisitions and getting more done. Read more of their story.
This shift in focus—from vendor to identity risk—arms organizations with the tools needed to protect their most valuable data and resources in an increasingly SaaS-dependent world. Here, we’ve compiled a table of the SaaS risk factors, the evaluation metric, and how to measure SaaS identity risk.
The success of post-M&A integration hinges on proactive SaaS identity risk management. Addressing identity risks early isn’t just smart—it’s essential for protecting sensitive information, maintaining seamless operations, meeting compliance standards, and ensuring that the IT integration is successful. But the work doesn’t stop there—continuous monitoring is key to maintaining a secure environment beyond the integration phase.
Equally important is the post-deal cleanup. Ensuring access is revoked for data rooms, project tools, and any third-party systems used during the transaction is a step that’s often overlooked but critical. Failure to close them out can leave behind dangling access and lingering identity risks that threaten the security of your newly integrated organization.
As the merged entity moves forward, establishing a clear roadmap for ongoing identity risk mitigation is vital to your success. Regularly updating SaaS policies, adopting advanced security technologies, and maintaining constant vigilance through monitoring and auditing are critical to ensuring your merged IT environment remains secure and scalable. By taking these proactive measures, you’ll not only protect the present but also build a foundation for future growth and resilience.
Grip is a pioneer in SaaS identity risk management, providing innovative solutions to help enterprises address the security risks of post M&A integrations. To learn more, we invite you to book a demo.
Gain a complete view of your SaaS usage—including shadow SaaS and rogue cloud accounts—from an identity-centric viewpoint. See how Grip can improve the security of your enterprise.
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