As organizations depend more and more on the information systems that coordinate transactions, manage operations, and aid the pursuit of new market opportunities, the role of IT in mergers becomes more critical. Companies with a keen understanding of IT’s essential role in M&A can gain an edge in completing successful mergers. CIOs who clearly articulate this opportunity to fellow senior executives should earn a more strategic role in M&A.
Problem statement
• Many mergers don’t live up to expectations, because they stumble on the integration of technology and operations: tech and ops difficult to integrate as people didn’t review it at the due diligence talks. IT people not included.
• A well-planned strategy for IT integration can help mergers succeed: a company with flexible, streamlined IT can wield this knowledge as a powerful tool in choosing which deals are most attractive. Acquirers might even be able to bid higher, as they are better prepared to capture cost savings that successful IT integrations deliver.
Opportunity: More than half of the synergies available in mergers are strongly related to IT. Examples are lower IT costs, reduced IT headcount.
Recommendations for success in consolidating IT for M&As
• Companies should create a strong acquisition platform by: o Building an information architecture well suited to acquisitions by cleaning it up and reducing numbers of systems. o Getting the right capability that can then will help identify acquisition