Mergers And Acquisitions: Three Principles Of A Successful It Integration

Mergers And Acquisitions: Three Principles Of A Successful It Integration

During mergers and acquisitions, organizations are forced to admit that business and IT have conflicting needs. The business side wants to begin cross-selling the products and services of the newly formed company in order to increase revenue in the short term. The IT department, on the other hand, wants to ensure that sufficient time is taken to integrate the disparate systems effectively. While it is easy to overlook the needs of the IT department, successful systems integration plays a critical role in merger success. The quicker it happens, the sooner IT can once again begin to generate business value.

Define Integration Goals

According to Bain & Co, executives often lose valuable time in early weeks and months by taking too long to decide low-priority issues like merging email and intranet, instead of spending that time on how to best approach IT integration. A successful IT integration begins with defining goals and determining IT’s role. This step helps to clarify the business value that the IT department will contribute to the merger, while defining the goals of the IT integration lays the foundation for all future decisions.

From here, organizations can move on to questions such as which platform will best ensure the new company’s future success. Perhaps the answer is one of the previous company’s systems, or maybe a hybrid mix of both, or possibly starting over from scratch. With clearly defined principles, this question is much easier to answer, and in turn allows for intelligent decision-making on topics such as infrastructure, organization, and suppliers.

Three Principles of Successful Integration

  • Move Quickly to Drive Business Value: While many IT execs would prefer to hand pick the best from each organization’s existing systems, the costs may outweigh any potential benefits. A pragmatic approach is to choose the best anchor system, and then continue to manage with the attendant auxiliary systems. Further along in the integration, it is worth considering the value versus the costs of changing these systems.
  • Establish Clear Priorities: With business strategy and goals defined, it is critical for leaders to be willing to execute quickly and decisively. While it may be a disappointment to the project owner when his/her major undertaking is cut, this type of decision making is critical to the eventual success or failure of a merger.
  • Don’t Forget About Talent: Mergers can cause considerable anxiety to a workforce, so it is critical that senior managers and executives actively communicate with top talent. Good people will leave during the integration if they feel uncertain about their future. Fear of redundancy can lead your talent to jump ship if communication doesn’t happen on a continual basis.

Beyond the Merger

  • While short-term decision making is crucial for a successful IT integration, one of the inherent risks in this behavior is that the IT department can get derailed from its long-term journey. To help prevent this risk, it is useful to set boundaries that signal to the workforce to switch their energies from merger integration back to business as usual. Change will continue to happen, but clearly defining the boundaries of the integration allows the new company to begin to move together as a successfully integrated whole.