@ProjectExpert writer David Hannon (@DaveatWisPubs) interviewed Newport Consulting principal Matt DeBenedetti recently on his forecasts and observations on the growing mergers and acquisitions path and what makes or breaks M&A activities. In this article, Matt provides these insights on how organizations fare in the post-merger environment:
Typically, the first question IT projects teams need to address during the acquisition process is when to get involved. Although involving IT in a deal too early can prove a waste of time, the more common mistake is not involving IT project teams early enough, which delays the integration and can ultimately have an effect on the success of the acquisition.
“The worst example I’ve seen was a company that wasn’t able to recognize revenue because the IT merger team didn’t migrate their financial systems fast enough,” says Matt DeBenedetti, a principal consultant at Newport Consulting. “They couldn’t book any business for an entire quarter.”
Additionally, Matt talks about what should happen and when in the corporate merger sequence, particularly at the outset through proper due diligence.
Once an acquisition is put in motion and due diligence begins, the IT project team can begin to build the long-term IT strategy and analyze how the newly acquired company fits into that strategy and the IT landscape. DeBenedetti says this “initial assessment phase” should include tasks such as defining critical success factors, conducting a risk assessment, and doing a preliminary estimate of synergies and compatibilities — but not yet embarking on any real integration work.
The acquisition’s closing allows the acquiring company to perform a detailed assessment and actual inventory of the acquired company’s IT assets. That inventory audit, says DeBenedetti, should go beyond the applications, modules, versions, and hardware. “It should include an analysis of the contracts and service level agreements each company has for its hardware and software. If the acquired company has a better contract for a certain asset than the buyer, it could be worth keeping.”
You can read the full article at ProjectExpert (an SAP Experts publication), featuring results from a recent BDO survey here. (Subscription required) Thanks again to Dave for permission to share Matt’s insights here.