IT Best Practices for Financial Managers

Chapter 15. Key IT-Related Questions Every Financial Executive Should Consider during a Merger, Acquisition, or Divestiture

Mark Walsh

There is a strong correlation between early and consistent information technology (IT) involvement in merger, acquisition, and divestiture (MA&D) transactions and transaction success.^[11] In a recent analysis of major mergers, acquisitions, and divestitures, it was noted that in transactions where IT was involved in early due diligence and planning activities, transactions realized a higher likelihood of achieving an issue-free Day 1 and achieving or exceeding identified synergy capture targets. Despite this data, many companies often do not invite the chief information officer (CIO) or his or her team to the deal team until the diligence is completed, synergy numbers are calculated, integration timelines are developed, and transactions are announced.

Based on our experience and research, we believe there are a number of key IT-related questions every financial executive should consider asking before and during a merger, acquisition, or divestiture.

Before a Transaction Is Identified

Even before a decision has been made to pursue a specific transaction, there are a number of IT-related questions a financial executive can ask to evaluate and enhance the organization's chances for MA&D success:

1. What is the role and perception of IT in your organization?

   • IT is integral to the business/IT is a key business partner. If this is true, IT must (and likely will) ...