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Successful Mergers and Acquisitions

IT’s role in a smooth integration

IT’s role in a smooth integration

Typically something is amiss if these subsystems are running in tandem with IT. At a minimum, it’s a sign of major inefficiencies, with duplicate data entry to the main system for show purposes and to the desk-drawer system for operating purposes. At its worst, this can be a sign of ineffective management, overstaffing and lack of operating controls.

Other problems that desk-drawer alternative systems could signal include inadequate initial user training and supervision, staff turnover where new people aren’t properly trained or poor initial systems implementation.

When these problems present themselves, properly reinstalling the main system and adequate training can often address them without the acquiring company spending significant money and resources for a new system.

Data-governance issues—how well data is captured, processed and managed for both the acquiring and acquired companies—also must be considered for a successful integration. Sales tracking, inventory-management systems and billing are supported by the IT systems in place. For the resulting company to function effectively, it’s critical that the data provided is accurate, timely and actionable.

The data must also be captured and managed at a level of detail that’s consistent for the two companies and provides meaningful information to operational and management users in the merged organization. If the data is inaccurate or vague, bringing it up to an acceptable level during the merger can be a huge—and expensive—challenge.

Which System is Best?

Large companies typically force their IT systems onto their smaller acquisitions. However, when two like-sized companies are merged thoughtfully, they’re more inclined to act pragmatically and determine which system works best for the combined company.

Once this decision is made, smoothly implementing one system into both companies, including merging data-governance objectives, with a continuation of processes and databases, is critical. This process begins with a close look at technology to determine if the acquired company’s infrastructure can support the new system.

Infrastructure includes wiring and communication tools to link workstations, laptops, external devices (smart phones, operating tools and others), servers and networking capability. If any of these items are found deficient, money and time are required to bring them up to speed.

“Often, depending on cost and feasibility, there may be several options to improve the infrastructure and bring it up to speed,” Wener says. “For example, you can improve infrastructure by adding servers. Or if the servers are adequate, you can enhance the communication capabilities to allow use of existing servers.”

Next, deciding how to implement one system across both companies is critical. If handled properly, using the employees of the driver IT department to install and implement their system in the acquired company provides an opportunity for the IT departments to work together, rather than being a source of conflict between the two IT organizations. Approaching this issue properly often results in a smoother and less expensive process than hiring an outsider to install a new system for one or both companies.

Tom Brandes is a freelance writer for variety of subjects, including technology, healthcare, manufacturing, sustainability and more.



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