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Successful Mergers and Acquisitions

IT’s role in a smooth integration

IT’s role in a smooth integration

Relationships and Jobs

Other critical IT issues in an M&A of like-sized companies involve people and job slots. It’s a fact of life that redundant jobs must be reduced. However, managers in the surviving IT department should meet with employees of the disappearing IT department to identify those people who can help integrate the departments and, critically, have credibility with the acquired company’s employees, who are also its IT users.

Building relationships among the people being retained can avoid internal problems that can fester in the acquired operations and stymie the original merger objectives.

Employees of the disappearing IT department often have little or no leverage regarding their employment status following the merger. But how well they articulate their ability to help the surviving IT department implement its system in their company will have a direct bearing on the question foremost in their minds: Will I keep my job?

A Real-World Example

The value of properly conducted due diligence—asking the right set of questions upfront—can’t be overstated.

“One of the biggest mistakes from an IT perspective in an M&A is not asking the right questions, thinking things out and listening to problems before the deal closes,” Wener says. “If you get expectations on both sides clear and accurate during due diligence, the integration process on the back end becomes much smoother.”

One of the smoother M&A integrations Wener has seen involved a manufacturing company (Company A) that bought a company with two small plants (Company B). After examining the IT operations of both companies, Wener recommended that Company A implement Company B’s IT system because it was better suited to the combined company’s needs.

To integrate the companies, employees from Company A met with and taught Company B employees about Company A’s products. Then Company B’s IT team traveled to Company A and taught employees how to use its IT system, why the system worked well for Company B and how it could work effectively for Company A.

During this time, Company A’s IT team supported Company B’s operations while Company B’s IT team helped implement the new system. The result was a closely integrated business operation and a closely knit IT department that smoothly supported the combined operations.

The merged company was quickly and easily integrated and relationships grew out of knowledge sharing and good communications around the surviving IT system. Strong executive leadership and working with the two IT departments and operations teams to make sure everyone understood the goals of the merger were critical to the combined company’s eventual success.

Company A’s IT team was evaluated on how well it integrated with Company B’s IT users and vice versa. Both IT departments were evaluated on how well they worked together.

“The goal is make the integration go smoothly, and often a successful integration is not a technical issue, but rather a people issue,” Wener says. “Cross-pollinating knowledge and sharing expectations between IT departments enhances the potential for success. In this example, everyone knew their roles and what they would get from a successful integration.” Both companies’ management, employees and IT departments worked to understand the needs and expectations for a smooth integration.

IT’s Critical Role

IT departments have a vested interest in ensuring M&As go smoothly. With proper due diligence, planning and communication, IT can play a critical role in helping make the M&A process as pain free and successful as possible so the new business can grow and thrive.

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



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IT’s role in a smooth integration

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