Blame it on the crisis. Or simply on the global economy. In any case, we have all seen it over the past years – mergers and acquisitions have become more frequent.
While this can provide a strategic platform for future growth (or simply for survival), the bad news is that they can also result in major IT challenges experienced by any organization that is growing or changing.
Even though most companies are likely to outgrow their IT systems as they evolve over time, a merger or acquisition will in most cases accelerate and amplify this natural evolution. In these cases, you now have two companies that are typically different in many ways, including in their respective operating models and IT systems.
Many companies have not been sufficiently focused on these issues, resulting in surprises and delays in realizing merger benefits.
However, IT don’t need to be a surprise or disruptive to a merger or acquisition. Here is some free advice to help prepare for the potential challenges of merging companies and their IT systems.
Standardize business processes before selecting IT platform IT
While it may be very tempting to jump directly into the discussion of “Which software are we going to keep for the new and combined company?” right away, it is important not get carried away by looking at this as an IT issue. To determine which systems will best support the merged organization going forward, it is important to understand how the business is going to run going forward. Otherwise, the decision of which systems to keep and which to decommission will become driven by internal politics more than by tangible business requirements and needs. Make sure you focus on the business drivers for the merger, and that IT support those drivers. Maybe what was best-fit before, is no longer so.
Define the best IT roadmap and systems landscape for the new organization
To be able to define the future IT roadmap and systems landscape, it is important to understand the future operating model of the new company setup. How much will the two companies standardize operations? Will they remain independently operated? Will there be functions that are shared across both organizations, such as finance, bunker desk, HR, etc? These and other strategic decisions should ideally be made before finalizing the systems landscape and IT roadmap.
Recognize that organizational change management will be even more challenging than for a normal IT system implementation
In addition to typical IT project challenges, employees at newly combined entities have many unique stressors and potential sources of resistance, such as new job roles and responsibilities, uncertainty related to job security, new reporting structures, and a host of other issues that serve to further complicate. So not only is there a need to discuss and agree new ways of doing things, and what methods should prevail – it also happens in a climate of multi-dimensional changes that for some individuals can be difficult to comprehend. An effective organizational change management program will account for these and other sources of organizational resistance.
Make the process repeatable
Some companies will find it useful to assume this won’t be the last merger or acquisition that they go through. If so, they should document standard business processes, develop a corporate center of excellence, and facilitate other activities that will make future merger integrations more effective.
Last words of advise
Mergers and acquisitions are strategic initiatives driven by solid business needs and arguments. However, IT alignment and implementations is too often the last thing on executives’ minds in such a situation, where they might even be fighting for their own future jobs. By going into the process with eyes wide open, applying the proper attention – and experts if no experience is present in-house – management teams will be much better prepared to get the most return on investment and a smooth implementation.