M&A Information Technology Best Practices

Chapter 4

Mergers and Acquisitions IT Strategy, Approach, and Governance

Chris DeBeerMichael H. Moore

Mergers, acquisitions, and divestitures are often some of the most unsettling activities that many functions and their staffs face in the life of a company. There generally are many communications from leadership extolling the virtues of the combination, but the fact remains that many of the changes to come are unknown and that there is a lot of work to come before the “new normal” is realized.

Information technology (IT) is, oftentimes, one of the functions most affected as a result of a merger or acquisition, and, in turn, affects many of the other functions as well. Changes to IT systems and applications—such as e-mail, human capital management (HCM), customer relationship management (CRM), and enterprise resource planning (ERP)—may be some of the first and most noticeable changes to many of the people across the new company or organization (NewCo). Working to make sure system changes cause the least amount of disruption possible and benefit from the effectiveness of NewCo needs to be a top priority of senior management in all functions, not just IT.

Effectively linking strategy, approach, and governance is difficult in stand-alone organizations; maintaining the linkages between these three areas becomes even more challenging during a merger or acquisition. In this chapter we lay out the key components of IT integration as it relates to four key functional areas—finance, operations, ...