Top tips for CIO’s managing M&A projects

The importance of meticulous planning… 

The mergers and acquisitions (M&A) market which was impacted by the unique challenges of 2020 / 2021 is seeing renewed growth, with some industries not only rebounding but actually thriving. After many years of complex, mission critical systems integrations work and numerous IT M&A projects, SXiQ, an IBM Company has learned a thing or two about successful IT M&A integration.

It may sound obvious, but the importance of meticulously planning the IT integration of an M&A event can’t be understated. During the agreement phase, CIO’s will have assessed the IT environment and factored in any system and staff structure considerations.

Two of the most common and critical areas of an M&A are data segregation and infrastructure planning, and these need to be addressed in detail from the outset. When it comes to data implications, critical success factors include early identification and analysis of assets, effective data governance and ownership, and a focus on compliance and data quality.

Data Migration Architecture is often overlooked as part of M&A activities and the complexity of how data & configuration information is efficiently migrated from Seller to Acquirer to support a migration schedule is critical. M&A activities typically require migration of many applications which at the time may require data segmentation or masking to securely provide the data only relevant to the M&A. The rules, processes and responsibilities for how this is done needs to be planned and ideally incorporated into the contractual terms to avoid confusion and significant stalling of actual progress during the early initiation phase.

During the M&A process, the CIO can play a key role in understanding and negotiating viable software licensing strategies across LoB applications to avoid costly and unplanned adoption of less-than-optimal licensing models. This is especially important when moving from on-premise to cloud.

As for resourcing, one of the most important things to plan for is your people. Culture change is one of the most difficult parts, and your integration plan should address it. For staff, M&A announcements often trigger feelings of concern for their job safety. M&A transactions typically require restructuring and then upskilling and training those who remain in order to meet new job requirements. Managing this properly can have a huge impact on the success of the merger and the morale and output of both the existing and new team coming together.

It’s important to maintain a healthy, transparent relationship with all business partners to manage expectations efficiently and avoid any miscommunications. When forming a transition management office, be sure to include an equal representation of adequate functions such as IT Project Management Officer (PMO), IT transition lead, key functional leads, key technology leads, cyber security, compliance office and HR and change agents.

As you look to map out the completion of your M&A within a realistic timeframe, plan to the lowest level of detail. There is no better case study for 80/20 planning than M&A IT integrations.

To keep reading, download our eBook ‘A CIO’s Guide to Mergers & Acquisitions’.