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Outsource magazine: thought-leadership and outsourcing strategy | July 26, 2017

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Post-merger integration

Post-merger integration
Christian McMahon

Post-Merger Integration (PMI) is all about delivering the value and benefits realisation of your investment against the predetermined resource and budget. Deviate from this and it’s amazing how quickly any benefits and goodwill can vanish.

People are naturally an important component of any acquisition and as any acquisition can be traumatic in many ways they should be treated with respect and courtesy. People coming across during acquisitions are naturally sceptical and nervous as to the working practices, structure and culture of their new parents.

Senior management roadshows to the key locations and regions of the acquiree are important, where each presents and discusses their areas of the business, taking questions and holding meetings. It’s important to hold more detailed ‘orientation’ meetings at regional hubs where back-office services explain procedures, working practices and policy whilst providing necessary equipment such as laptops etc. If you or your senior teams don’t already do these, I would encourage you to do so as they are great introductory sessions and key to forming strong working relationships.

I have always found that if you create a structured and logical platform from which to operate your IT estate, it is much easier to perform PMI. If your planning is well thought through, you will have realised pretty early on in the acquisition process where the acquired systems or services will sit or be migrated to within your enterprise architecture. You will have already thought about how you are going to manage the migration of any proprietary data formats or purchased any third-party services or connectors to perform this for you.

If your systems are provided by cloud vendors, you need to work with them as soon as you have started your initial due diligence to work upon the possibilities of what may be needed (don’t wait for surprises down the line or plan for ‘expecting’ things to work). Often, cloud vendors will have predetermined connectors or partners to import data from defined products, but if your ‘new’ data is coming from a proprietary or unsupported product you will have to work out which data format it is best to get the data in to for bulk importing.

As with any PMI project, you need to think about any increase to the size of your data estate. This is especially prevalent if you need to purchase additional hardware, data centre or cloud service storage to manage the increased size of your data. Failing to pick up on this early on, even if it’s only necessary in a transient phase, will quickly evaporate your predetermined budget.

As a CIO you have to be careful when planning the integration of an acquisition to not leave yourself short in the long run. This may well please the CFO in the short term but longer-term the problems will come thick and fast. You need to be frank and honest with peers (especially the CFO) in terms of what you need to complete the integration and manage the enlarged organisation going forward.

Make sure you factor in the cost of resourcing in to your acquisition planning, especially if it involves hiring new people or contractors to bridge or migrate across to your existing systems and platforms. Training and support costs for new technologies and platforms are often missed: so do your homework and work out where the enterprise architecture changes will be made and support them accordingly.

Good luck!

Comments

  1. Legal Technology IT

    some law firms are even finding that by having the right IT in place it makes them more attractive in terms of M&A

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