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Managing IT effectively in M&A
Looking for insights, tips and recommendations on how to address the information technology (IT) side of mergers and acquisitions (M&A)? You’ve come to the right place.
This second installment in our " Making the Deal Work" series addresses challenges facing IT in mergers, acquisitions and divestitures. It offers an in-depth look into M&A IT issues, ranging from the overall role of IT in M&A transactions to effective construction and execution of a transition services agreement.
Section 1: The IT landscape
Will you sink or swim? Can you pull off this deal without outside M&A IT consulting support? introduces critical transaction-related and organization-related factors to consider when deciding whether to engage outside M&A IT consulting support and includes the M&A IT Intelligence Quotient Assessment Tool™ that you can use to help assess your organization’s ability to complete a current M&A IT transaction.
Don't forget IT! Eight simple ideas to help reduce IT-related M&A risk discusses the importance of involving IT early in the deal process. In fact, it presents findings from a Deloitte study that shows a clear correlation between Day One effectiveness and IT involvement in due diligence and integration planning.
A new house begins with blueprint: Day One and end-state IT blueprinting discusses the importance of planning in achieving synergy and illustrates the use of blueprinting as a useful tool for rationalizing technology so the new company's IT profile can support its strategic goals while eliminating IT redundancy and waste.
Where in the world is IT? During M&A is a good time to ask old questions, again urges the CIO to use the M&A event as an excellent opportunity to ask an old question, again: Which service delivery model is most appropriate for the new business? Old decisions – about outsourcing, offshoring, near-shoring and onshoring – can take on new dimesions when an organization changes its size or shape.
Raising the stakes of information: Effective information management for mergers, acquisitions and divestitures discusses the many ways that IT can help enable the four primary drivers of enterprise value in mergers, acquisitions and divestitures: revenue growth, cost reduction, asset efficiency and governance/risk/compliance.
Hedge your bets: The importance of IT risk management in M&A challenges the CIO to be assertive in addressing and resolving the many threats to a deal's value. The IT risk management framework presented here covers four primary areas of risk – integration, technology, information and business.
Built to last: Using an M&A event to build sustainable IT business value recommends that IT facilitate its on-going value by aligning IT and the business, rationalizing technology and retaining knowledge workers. These activities can help drive efficiency, effectiveness, return on assets and shareholder value.
Section 2: Synergy capture
The role of IT in M&A discusses the essential role that we believe IT must play in the full cycle of M&A activities, from pre-merger integration planning to post-merger integration, with the goal of helping to increase shareholder value from the deal.
Leveraging IT's ability to drive post-merger business value presents a framework for IT to position itself to capture the full range of benefits from an M&A opportunity through three levers: resource management, work management and business-IT alignment.
Ignorance is not bliss: IT due diligence is fundamental for post-merger synergy capture presents practical tips to consider for conducting due diligence along multiple dimensions: business, operational, delivery, financial and people. By asking the right questions, at the right time, the CIO can increase the likelihood that IT will deliver the anticipated synergy of the post-deal enterprise.
M&A IT benefits with no deal involved: Simple ideas for realizing M&A benefits without a transaction shows ways an organization can create a virtual M&A event to help them realize M&A-like benefits of improving financial and operation performance without actually completing an M&A transaction.
Section 3: Integration
Walking the M&A IT tightrope: Establish a safety net of M&A capabilities before integration begins stresses the importance of having a "safety net" of capabilities – specifically, knowledge, processes and tools and experience – before tackling the high-wire act of post-merger integration. All types of activities, from training to M&A integration simulators, can help an IT organization get ready to effectively make it to the other side.
Virtual fences: Five ways to retain IT people when you need them most presents a down-to-earth way to address employees’ concerns about a merger, acquisition, or divestiture to help earn their confidence and win their commitment to the transformation ahead.
Building an integration roadmap: Key questions every CIO should ask includes a checklist for IT to consider to help them achieve synergies within the desired timeframe, facilitate an issue-free Day One and keep the impact to key stakeholders inside and outside the organization low.
Managing your data tightly through an M&A event describes ways to plan for and manage the risks and impacts associated with data integrations, from understanding critical data, through assessing its quality, to maintaining controls through the use of tools and methodology.
Cooking lessons: A CIO's guide to leading a first merger integration project serves up a five-step "recipe" to consider in preparing for an IT integration, including conducting due diligence, crafting and implementing an IT integration plan, improving synergies and preparing for future mergers.
Give IT a fighting chance: An M&A information technology integration framework presents an IT integration framework from A to Z – from alignment with the business direction, through IT architecture and organization, to funding and governance – with the intent of helping IT achieve the "readiness" that's so important to a smooth and successful integration.
Section 4: Divestiture
Time to leave the nest, kid: 13 tips that could ease the transition of a carve-out offers the CIO for a carved-out IT organization 13 light-hearted, but highly practical, transition tips to consider as you try to make it without a "parent" and achieve long-term prosperity with limited short-term pain and failures.
Fast break: A way to design and manage TSAs to achieve a fast and clean separation illustrates factors to consider in creating an effective Transition Services Agreement (TSA), one of the most crucial elements of a divestiture. An effective TSA can help both buyer and seller accomplish their respective goals.
Breaking up is hard to do: Five questions for every CIO whose company is divesting a business poses five questions the CIO should consider in preparation for segregating systems and services as a result of divestiture.
The role of IT in business has never been more significant than it is today. IT is a critical enabler of virtually every operating element in contemporary organizations and timely access to information is unquestionably of paramount importance. The ability to keep one’s company “on the rails” while simultaneously executing a complex merger, acquisition or divestiture is a skill which needs to be part of every contemporary CIO’s repertoire.