Even though merger activity is intensifying in every sector, many deals still fail to take account of the IT issues. Andrew Morlet sets out five rules to help CIOs ensure acquisitions succeed.
CIOs need to get involved at the earliest possible stage of any merger, to help their organisation identify valuable technology and obstacles.
The truth is that most acquisitions are driven by international bankers and financial strategy advisers who are not necessarily engaged in the operational realities of making the deal happen.
There is a danger that this lack of operational engagement creates blind spots that leave a CIO at risk of becoming a victim, rather than the hero of the hour. CIOs have to ensure that the merger IT plan fits with executive management goals.
Of course, the CIO's insight can have a substantial influence on the entire merger agenda. The CIO can be particularly influential in helping to identify areas where the merger can solve existing problems, spotting new IT-enabled opportunities, ensuring hand-over problems are solved quickly, and using the merger to simplify processes and drive beneficial changes.
Cross-border, cross-sector or cross-cultural deals are notoriously difficult to manage. Here, knowledge of IT and planning is even more critical.
So how does a CIO stay the hero? Here are five basic rules to help CIOs make mergers successful.
- Due diligence: Be there from the beginning. Quickly gaining an understanding of potential issues and opportunities across the infrastructure, applications, service management, change and delivery capabilities of both organisations can make the difference between success and failure.
- Continuity: Keep the business moving. Ensure that business continuity is absolutely maintained at all costs and that there are no issues with service delivery as a result of the integration. There is a real risk of damage to customer relationships for both companies, especially when so much is changing rapidly.
- Transition: Plan together, deliver together. Establish the target operating model and integration options early. Ensure that a joint business-IT governance body is in place to take charge of decision-making and focus the plan on a fast transition before attempting any major transformation.
- Synergy: Focus on value and new capabilities. Seek out new business capabilities that the merged group could create and understand how they will be developed and supported by technology.
- Post-merger: Seize the future. IT and business integration plans need to be closely aligned and tightly controlled to ensure delivery. Integration teams need to include your best people. Speed is critical. Rapid integration of the infrastructure creates the foundation for new and more complex business-facing systems and capabilities.
Mergers can help drive corporate transformation and redefine competitive and technological cultures in an organisation. IT is vital to building and sustaining the operational success of mergers.
What the world needs now are more IT heroes who can make a merger work.
Andrew Morlet is head of European IT M&A at Accenture
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