IT Post-Merger Integration: Initial Days

Post-merger integration is critical in realizing the M&A deal’s expected benefits. This article focuses on the role of IT leadership in the early days of Post-Merger Integration. At this stage, key activities may include system integration, data migration, network consolidation, aligning IT policies and governance, harmonizing software and tools, managing change, and minimizing business disruption. Before proceeding, ensure to read the Due Diligence artifacts, which may include checklists, summaries, budget information, organizational structure, etc.

Following are some aspects that must be clearly thought through:

What Triggered the M&A?

Understanding the strategic reasons will greatly help in prioritizing the topics and sharpening the focus. For example, if it is a merger between a critical supplier and a manufacturing company (vertical merger) then perhaps it will make more sense to focus on supply chain related topics.

Management Goals and Expectations:

Senior management in all involved companies will have specific short/mid/long term goals following the M&A. These may include cost reductions (which can, unfortunately, imply potential layoffs). Understanding expectations will help to target and align underlying processes, platforms, tools and services.

Building Trust:

When two or more teams from previously separate entities come together in an M&A scenario and do not feel safe sharing information, the whole process is likely to be bumpy for everyone. Identifying PoCs (Points of Contact) early and spending time in building rapport will greatly help in collaboratively moving forward.

Portfolio View:

Portfolio views can be visualized in different ways. Understanding the IT portfolio of all involved companies in relation to the business processes can help to map if the same process is executed by different softwares and tools. The portfolio view should include future roadmaps and it should be discussed if the roadmaps still make sense. Clustering around business processes may help in efficiently and objectively comparing competing tools, services and platforms. Furthermore it will help launch workstreams with clear objectives. Generally, you will be looking into integration and migration of the tools (with business timelines in mind). One crucial aspect to clarify is the availability of the budget, as it always places limitations on ambitions!

Vendor List and Contractual Obligations:

This is largely about deciding the future strategy for vendors. The questions you should discuss include; Who are the vendors? When their contracts are expiring (or what is the penalty for early exit)? Do we have alternative vendors, and if so, does it make sense to consolidate to a single vendor for a particular function? Does the service require stricter SLAs/OLAs?

Proactive Approach:

It is highly advisable to keep a close eye on delivery and operational services, especially on the topics related to the end customer processes such as website, sales and customer care. Most likely, marketing teams on both sides are creating a lot of material and both Sales & Marketing teams may require rapid changes. In the initial days, people may be confused about their role and future in the company. At this point, you should work closely with the teams in the acquired companies, as they know the processes and products. Their advice and guidance will be important in continuing to deliver value to the customers.

Again, these are just a few key points to consider when starting the PMI process. In later stages, a more detailed plan must be created and followed to ensure a successful M&A.