Timing Is Everything
CIOs who approach organizational M&As as opportunities to grow staff and strengthen IT assets give their companies a significant advantage over those who view M&As with trepidation. According to a new Gartner report,"Timing Is Everything in Mergers, Acquisitions and Divestments," CIOs who take on the role of integrator from an early stage in the process can improve the success of the overall deal.
"Integrating the IT systems of two or more enterprises is a vast, complex, and potentially costly process and it is a major challenge for the IT organization," says Dave Aron, vice president and research director at Gartner. "However, if the process is handled in the right way, it can provide the opportunity to upgrade and update existing systems for overall business benefit. Proactive CIO involvement in the MA&D [merger, acquisition, and divestment] process can also play a significant role in identifying and reducing information and process based risks that span multiple business areas, as well as spotting opportunities related to that information."
CIOs who are proactive and who take an optimistic approach towards M&As are likely to ensure long term success for the IT department as the effects of the merger are felt. "IT organizations which are M&A-ready tend to have a CIO who has been engaged in the process from an early stage," Aron says. "In such cases the CIO is ideally placed to both maximize the value of future integrated systems and retain employees who will be of long term value to the organization. With M&A deals on the rise again, CIOs need to understand and influence their enterprise's M&A agenda."
Aron stresses that when it comes to mergers, acquisitions and divestments, timing is everything. "Practiced CIOs are more likely to engage, prepare, and execute on the process earlier than a classic M&A timetable would suggest, with a strong bias towards fast, clear decision making and people issues."
According to Aron, although the CIO of the acquiring company may have been on the inside of the deal much earlier than the CIO of the target organization, the target CIO can take precautions to ensure that he or she is similarly well prepared, should an acquisition be in the cards. "We advise CIOs in this situation to have their processes, human resources, and assets well documented, and to take an honest view of their position. In the early days we would recommend trying to learn as much as possible about your suitor and developing a plan accordingly that will keep staff motivated and onside."
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