M&A Information Technology Best Practices

Chapter 12

Using M&A to Streamline the Applications Portfolio

Colin WhiteneckJoydeep MukherjeeTed VeteranoVenky Iyer

New market drivers and business opportunities such as mergers, acquisitions, and divestitures are continually impacting the way IT can support and drive the business. A regularly evolving applications portfolio strategy can enable CIOs to position IT to support and leverage technology enablers for business efficiency. CIOs are continuously looking to streamline the applications footprint to:

• Support mergers, acquisitions, and divestures and help achieve synergy targets.
• Position IT as a business partner in addition to being a business enabler.
• Respond to newer technologies.
• Improving IT cost run rates.

Exhibit 12.1 outlines the drivers that contribute to rationalizing the applications footprint.

Exhibit 12.1 Drivers for Streamlining the Applications Footprint

*Driven by M&A events Source: Deloitte

An M&A transaction is a disruptive event that can be leveraged to streamline the applications portfolio. No matter whether the transaction is an acquisition, a merger, or even a divestiture, applications rationalization can help to accomplish the following:

• Attain operational and cost synergies.
• Reduce stranded costs left with the seller after a divestiture.
• Standardize, streamline, and simplify the applications portfolio.

CIOs and IT leadership should be driving a ...