Doug Zopfi

Principal Consultant, Ciber Supply Chain Practice

Mergers & Acquisitions – Alternative Approaches to IT Integration (6 of 10)

To continue our discussion of  IT integration in Merger and Acquisition environments, once the decision has been reached to proceed with integration of various systems and applications, there are different schools of thought on how aggressively the firm should proceed with systems integration:

  1. The most conservative approach is to maintain both former company’s technology platforms in the short term and focus on building interfaces and/or data conversion tables only where necessary to support those business processes that will be standardized.  While this approach is definitely the least disruptive and costly, it does little to encourage or force greater collaboration though-out the new entity and ultimately delays many of the benefits sought in the merger.  This strategy fosters an environment where “Its business as usual around here”
  2. The more traditional approach is to align IT strategy to integration activities on the business side where process and policy stakeholders are hammering through how and where to harmonize and standardize processes and policies going forward.  Once the new business model and operating environment has been defined, a supporting IT technology solution can be determined. A major pitfall of this approach is that in many M&A situations, the standardization of processes and policies can be a very contentious and time-consuming activity that is ripe with debate, obstacles and turf wars, all of which can significantly elongate the timeline to begin the technology platform integration.  The approach often results in a “But don’t you know, we’re different “ mentality.
  3. The most radical approach, designed to force the speed of process and policy integration is to develop and announce a hard timeline by which key systems and technology will be migrated to a common platform.  While it may seem backward to have IT actions drive business strategy, this approach does create the positive tension and sense of urgency to force the business side of the enterprise to make the tough decisions on how processes and policies will be harmonized.  This methodology, while unorthodox, does result in a “Let’s get it done” spirit.

Regardless of which approach is utilized, the primary catalyst of IT technology integration in M&A situations needs to be the degree of value creation that this action can either directly bring or enable for the consolidated business enterprise.  In addition, the required steps necessary to identify those business processes and policies which will be standardized versus those that will remain separate and distinct will not happen unless mandated and enforced by top level management.

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