The Top Ten Things a CIO Wants the CEO to Know About M&A
By Mark Rapier, Senior Advisor, M&A Partners
Information technology (IT) is often cast in terms of its role in M&A and its significance to risk mitigation, operational continuity, and achieving optimal deal results. Yet, many C-level executives outside of IT don’t have an adequate understanding of how M&A impacts the IT organization and its overall effectiveness throughout the M&A lifecycle.
A client once asked, what are the top ten things our CIO should make sure our CEO knows about the impact of M&A on IT. This list is summarized from that conversation.
Top Ten things the CIO wants their CEOs and Corporate Development Leaders to understand about the impact M&A has on IT.
10. You will have more IT vendors than you want for longer than you want. Fully migrating to the future state will take time. You need to build and maintain good relationships with the IT vendors who are not part of your long-term strategy.
9. IT Challenges will increase exponentially as the number of borders crossed increases. With more countries comes more data privacy issues, vendor relationships, support obligations, and more challenging team dynamics.
8. The road to the future is not straight and is always under construction. How you deliver IT today may not be what you need long-term. The buyer’s legacy platform may not be the optimal platform to unlock deal value. The target company’s solutions may be better a better fit. Or you may need something completely different.
7. Don’t let organizational design changes demolish your integration team. To meet the long-term objectives, you may need to retain key talent longer than the corporate development or finance would like according to the synergy plan or contract additional support that was not identified during the due diligence and synergy planning phase.
6. Use the deal to future-proof IT. With proper funding and time, M&A initiatives can accelerate broader strategic IT initiatives.
5. It’s all about Cloud. Cloud services for infrastructure (IaaS), platform (PaaS), and application (SaaS) solutions are more flexible and enable multiple deals over time.
4. It’s all about data. Many say that data is the new oil, and it is imperative to understand all of the data you gain from the acquisition. Treat data as an asset. Make sure you understand it and store it so it can be easily leveraged.
3. Don’t Let Deal Speed Become Ludicrous Speed. From announcement to close, there is never enough time to migrate IT operations as you would like. Interim solutions will be needed. If the need for speed becomes too great, the temporary solutions may impede business process change, increase your cyber risk, mismanage your data assets, or delay/reduce deal synergy.
2. Amp up Cybersecurity before you even learn how to spell acquisition. The minute bad actors believe you are contemplating M&A, they will look for weakness to exploit.
1. “If you don’t tell us where you are going, we won’t be ready when you get there.” Much as families without children buy homes based on the quality of the schools, IT needs to build more for the future than the present. If IT does not know the plan, they cannot develop an operating model that can scale as needed. The right approaches to data center planning, cloud adoption, managed services contracts, and vendor selection can take months or years to implement.
For these and many other reasons, IT needs to be fully engaged with key executive leaders and corporate development when planning and executing their company’s M&A strategy. Finally, it’s important to remember, there are MANY more priorities, challenges and opportunities for IT to impact M&A results beyond these 10 factors, and each company must determine its priority sequencing of these needs.
ABOUT THE AUTHOR: Mark Rapier is a Senior Advisor with M&A Partners, the exclusive integration partner of the M&A Leadership Council. Prior to joining M&A Partners, Mr. Rapier worked for PWC, NTT DATA Services, Cognizant, and HP Enterprise Services (formerly EDS). With a focus on applications modernization and managed services delivery, he has worked with clients with revenues ranging from $300M to $150B and has worked with several Fortune 20 organizations. Mr. Rapier has led multiple global programs that delivered M&A and ongoing services in over 100 countries. Mark holds a Bachelor of Business Administration degree from The University of Texas at Austin. He is also a certified coach and brings these skills to building effective teams for M&A Management Offices, global deployment teams, ongoing support services as well as a Certified M&A Specialist® (CMAS) designation.