M&A Information Technology Best Practices

Chapter 9

The Importance of a Tested IT Strategy and Approach for Mergers, Acquisitions, and Divestitures

Pavel KrumkachevShalva NolenNitin PrabhakarRajat Sharma

M&A IT Organization and Strategy

Merger and acquisition events are so varied and dynamic, and the nature of each transaction generally so unique, that they require a comprehensive strategy and focused preparation to guide IT organizations as they plan for future M&A scenarios. Described here are some specific guiding principles that can be used to develop an effective strategy for an IT organization and the IT resources it maintains to execute the integration of an acquired entity effectively. These principles encompass the development of a flexible and open IT function. They effectively help establish an IT ecosystem that allows acquiring companies to easily integrate new IT components from acquired companies and operate them to support the newly combined businesses. This strategy comprises the following five components, which are then each described in the sections that follow:

1. Increase IT-enabled business value by tightly aligning M&A business goals and IT priorities.

2. Design an enterprise architecture to support effective M&A IT integration.

3. Structure IT organizations to minimize impact from M&A deals.

4. Streamline IT funding and governance processes.

5. Build IT capabilities to support and execute an M&A transaction.

Increase IT-Enabled Business Value by Tightly Aligning M&A Business Goals and IT Priorities ...