Deloitte’s report, State of the Deal, M & A Trends 2019, indicates that the pace of merger and acquisition activity is accelerating.
79 percent of their survey respondents expect the number of deals they close in the next 12 months to increase, up from 70 percent last year. Not all such deals produce their expected value for a variety of reasons.
Sales don’t materialize; cost savings don’t meet expectations; outside economic forces interfere with company plans; or the integration of the two companies goes poorly. In fact, analysts contend that effective integration is the most important factor in a successful merger/acquisition.
IT integration is a critical determinant of that success. And the CIO who steps into the strategic planning process early, leading the careful assessment of the two IT environments ahead of time – can ensure that the integration of the two goes smoothly and that the transformed IT provides a platform for speed, agility and dependability for the new organization.
Given the intense pressure and uncertainty that occurs during mergers and acquisitions, it is important to get everyone focused on the business goals. By aligning technology integrations with core business objectives and basing decisions on data, companies can have more successful integrations and emerge from the transitions stronger and better able to face new challenges.
The CIO can raise the banner by understanding the business strategy, key priorities for the newly merged organization, and any technological vulnerabilities that need to be addressed.
All IT decisions, whether strategic or tactical, require access to accurate data about the assets and infrastructure, their relationships, and the ability to understand the impact of change – across business silos, across hosting sites, across technology stacks.
But most organizations don’t have the insight they need to understand what they have, how it’s all connected and hosted, the critical business facts and constraints for each asset. The IT team must take the lead in the effort to ingest all of the data and then make it consistent and actionable so decisions can be made which will deliver the business value.
The CIO can build trust across the two disparate organizations by providing access to a consistent view of data to all business users, executives, and IT users. This shared view of information will drive collaborative planning and help with decision making by providing all stakeholders access to the key factors and data points for true transparency.
As organizations depend increasingly on IT to coordinate transactions, manage operations, and fuel the success of new market opportunities, the CIO has an opportunity to set an example for the rest of the organization. IT has an essential role in M&A and, with the right set of decision-making data, can help the organization gain an edge in completing successful mergers.