M&A Information Technology Best Practices

Chapter 27

M&A IT Key Success Factors

Nadia OrawskiLuke Bates

Based on our research and experience, it is widely accepted that many mergers fail to deliver their expected value. Getting IT involved early and often throughout the M&A and divestiture lifecycle is critical to an effective merger or divestiture. This shouldn't be too surprising, as many deal benefits rely heavily on IT systems and infrastructure. Yet, many companies ignore IT during the transaction, putting off the inevitable until the deal is essentially done. By then, it's usually too late. To aid in the effectiveness of the transaction design and execution, we have identified a number of factors that should be front of mind for any IT executive about to embark on a transaction and are applicable to the full gamut of M&A and divestiture activity.

Key Success Factors

Involve IT Early

It is critical to engage IT early in the deal cycle to maximize M&A benefits and minimize execution risk. Most of the effective M&A efforts we have seen had significant IT involvement in all phases of the M&A lifecycle, from preliminary due diligence to Day 1 and beyond. Through up-front involvement, IT can uncover potential issues, high-cost items, and additional synergies to drive significant value during an M&A deal. It is considered best practice for organizations to assign a senior IT executive to engage in the M&A process as early as possible, to make the CIO (or designee) a key member of the due diligence team, and to keep the ...