The ExCo realises that the same set of products is being delivered via three different platforms, and that customer data is horribly fragmented. Virtues of each platform are re-extolled. A scientific investigation into process and IT integration is commissioned. Clear, signed-off business directions are an absolutely essential prerequisite to IT investigations. The astute CIO will ensure that terms of reference are adequate for the job in hand and that, as above, the investigators are knowledgeable, independent and have no stake in the eventual outcome.
Stage 5: Reality Bites
Science overcomes pre-merger euphoria. Genuine integration options with realistic costs, benefits and disruption factors are placed on the table. There is much wringing of hands and gnashing of teeth. Some participants decide to make career changes.
The CIO is a natural scapegoat as most of the expensive works programs will fall within his or her purview. Stakeholder engagement and independent advice throughout the preceding stages is mission-critical.
Stage 6: Action
This stage consists of anything except the original integration program, which by now has been consigned to the dumpster.
Key Messages for the CIO
In pre-acquisition activity, there are exquisite tensions between getting the deal closed quickly and getting an accurate picture of post-acquisition realities. In our view, the CIO’s job is to ensure that all parties have a well-researched understanding of the post-acquisition IT options, costs and impacts. Regrettably, realism and popularity aren’t always mutually supportive. Our experiences lead us to these suggestions:
- Get in early. Adequate pre-deal due diligence is the key to success.
- Stakeholders are emotional. Rely on independent experts.
- Remember that you have to live with your promises. In a publicly-listed company, this means that pre-merger estimates are monitored by post-merger shareholders.
- The business climate will remain unclear, confused or combative for some time. Stress the importance of stabilising the business context before defining the works program.
- Avoid religious wars. There will be only a small number of genuine integration options.
- Everything always takes longer.
While researching this article, we noted that Cisco and BT include IT integration components within their acquisition methodology. Cisco and BT are serial acquirers with immense experience. Aspiring acquirers could do worse than follow their example.
Allen Shatten specialises in IT strategies and programs for medium and large enterprises. He also has extensive experience as a vendor of IT services and software products. Allen is the proprietor of Lattice IT, an information technology planning company www.latticeit.com.au.
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