Make IT a Partner in Successful M&A Due Diligence

Many organizations are unaware of the essential role IT plays prior to executing a merger or acquisition.
IT-related activities are usually the largest cost items in an M&A, and when these costs are overlooked or underestimated, it can end up costing organizations millions in additional costs down the road.
Even if IT is involved early, the time between the Letter of Intent and the signed deal may be as little as three to four weeks.

Our Advice

Critical Insight

To mitigate risks and create accurate cost estimates, the CIO must force their way into the M&A conversation before the deal has closed.
Gathering and analyzing information is an iterative process that is ongoing throughout due diligence. Update your assumptions, risks, and budget as new information is obtained.
Communication with the M&A team and business process owners should be constant throughout due diligence. IT integration does not exist in isolation.

Impact and Result

CIOs have to force their way into the conversation during the due diligence phase, before the deal is closed and it is too late to make changes or price adjustments.
The CIO has a line of sight into IT integration considerations that the business often does not consider or take into account. As such, the CIO has an obligation to explain the IT cost implications of the M&A to the business in order to ensure they understand the whole picture before they make their decisions.
The CIO needs to collect information on both their own organization and on the target organization, analyze the information, and then make critical assumptions to define the resultant IT enterprise. By doing this, the CIO can provide the M&A team with the accurate cost information they require to make holistic decisions.

Make IT a Partner in Successful M&A Due Diligence 91制片厂 & Tools

1. Investigate challenges and benefits

Having IT involved in the M&A process from the beginning can lead to reduced operating costs, quicker decision making, and increased synergy capture.

2. Gain executive buy-in

It is essential that the IT team and CIO are aligned with the M&A business goals and objectives.

3. Determine current state of target organization

Collect as much information as possible about the target organization.

4. Consider current state of own organization

Recognize the key pieces of information that should be gathered about the current state of your own organization.

5. Define resultant enterprise

Understand the resultant business end state, and design the target end-state environment for IT.

6. Close gaps and estimate costs

Develop assumptions to close M&A gaps, and finalize IT investment costs.

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What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

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Get the help you need in this 3-phase advisory process. You'll receive 6 touchpoints with our researchers, all included in your membership.

Guided Implementation 1: Launch Due Diligence

Call 1: Introduce project steps and assess member fit.
Call 2: Gain executive buy-in for IT involvement in M&A due diligence.

Guided Implementation 2: Gather Information

Call 1: Determine the current state of the target organization.
Call 2: Consider the current state of your own organization.

Guided Implementation 3: Perform Analysis and Estimate Costs

Call 1: Define the resultant enterprise.
Call 2: Close gaps and estimate costs.

Authors

Amanda Robinson

Jason Petrovic

Contributors

Dave Spinelli, Senior Enterprise Architect, Microsoft Services
Bob Vukovic, Head of Technology, Direct Energy
Brenda Hobbs, Director, Records and Document Management, Barrick Gold Corporation
Jack Nestell, Owner, Nestell Consulting (M&A IT Advisory Services)
Roy Bartlett, IT Executive, Project Delivery and Data Centre Management, Novintro, Inc.
Vincent Briere, Director, Information Technology, SightLife