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Information Technology's M&A Problem
A briefing on IT integration during Mergers & Acquisitions
Merger, takeover, acquisition; call it what you want but
CIOs from all walks of life will likely agree, while Merger
& Acquisition (M&A) activities can be exciting undertakings,
they are typically rife with tension and ambiguity. As such,
the following guiding principles are designed to help CIOs
facing these scenarios bring technology to the forefront of
M&A discussions and planning, which is precisely where it
should be.
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"Liquidity in the market is still good so the ability to get
deals financed remains high, fuelling M&A activity in North
America."
Source: KPMG Global M&A Predictor |
"75% of an integration effort during a merger or
acquisition is determining which systems to keep, what data
is important, and how much integration is actually needed
before the companies are technically joined."
Source: Stephen David, CIO of
Proctor & Gamble for CIO Magazine |
"The difference between merger success or failure often
lies in effectively managing the integration process."
Source: A.T. Kearney |
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When a business makes the decision to grow inorganically via
acquisition, this is the time to invite the CIO to the
table.
Understanding the impact that enterprise technology has on
the success or failure of M&A activities is critical to
extracting the activity’s prospective value. According to
the 2007 results of the KPMG Global M&A Predictor,
“Liquidity in the market is still good so the ability to get
deals financed remains high, fuelling M&A activity in North
America.” In essence, we can expect to see an increase in
consolidation over the next 12 – 18 months, which should put
this topic on the minds of CIOs across all verticals and
business sizes.
Organizations are typically split between front and
back-office operations. Because of the whirlwind nature of
M&A activities, most early discussions and planning revolve
around integrating front-office functions such as Product
Management, Sales, and Marketing, while back-office
functions such as Human Resources, Information Technology,
and Operations aren’t seen as being critical in the early
stages. This is counter-productive; neglecting the
back-office “cost centers” during M&A activities is one of
the top downfalls of integration efforts, yet it remains a
routine practice.
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// TALK WITH US |
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// AUTHOR |
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Shawn Torkelson, Synapse SE
Managing Director |
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