By Braun Jones, Partner, WWC Capital Group, LLC
A merger or acquisition is a complex and difficult process that has many moving parts and obstacles for the senior leadership team to overcome or navigate around. Even when done correctly, with careful due diligence, proper internal communication, and all of the tips for a successful M&A adhered to, many companies fail to consider a significant and important aspect of the merger and often pay the price when the dust settles.
What is this elusive but critical element that so many companies fail to account for? It’s the much maligned and oft ignored IT department.
Gartner recently released an analyst report that broke down the M&A process into five critical integration phases:
- The Due Diligence/Planning Phase: Sketching out the basic plan of action.
- The Welcome/Signaling Phase: Companies implement a limited number of visible changes to signal the new reality the merged organization brings.
- The Initial/Commercial Phase: The most urgent practical changes are instituted.
- The Main Integration Phase: Most of the big process and system changes are executed.
- The Reap-the-Benefits Phase: The remaining benefits such as cost synergies or increased market share are harvested and monitored.
For a successful merger, the CIO and IT departments need to play a critical role during all five of these phases, just some more than others. This is because, according to Gartner analyst, Dave Aron, “integrating people, operations, information, and processes requires significant technology investments.”
With 21st Century companies, the dependence on technology and IT to the everyday operations cannot be understated, and integrating the disparate systems of a company that is being absorbed or merged with another is paramount, especially in the early stages. Unfortunately, as CIO reporter, Thomas Wailgum, writes, the CIO and IT departments are often relegated to mop-up duty in later phases.
The Gartner report, which walks companies through a phase-by-phase blueprint for the role of the CIO and IT during M&A, is available here for registered and interested Gartner.com users.
Have you recently undergone an M&A deal and felt the harsh sting of overlooking IT in the process? Weigh in and let us know about your experience.