A company executing a merger or acquisition without consulting the CIO is like scoring a touchdown in football without bringing in the field goal kicker for the extra point. In other words, IT priorities that are a key to business functionality and success (from application rationalization to operations integration) are being ignored.
5 IT Faux Pas of the Acquisition/Merger
According to InformationWeek’s Fred Latala, there are five ways a failure to bring IT into the merger/acquisition could foil the new business’s strategy:
- CEO is thinking short-term.
- Wrong IT culture prevails.
- Functionality is ignored.
- Size betrays compatibility. Team geniuses jump ship.
Sometimes it’s a failure of leadership. The quarterback (CEO) is so focused on throwing that touchdown pass and they’re not thinking about the overall game. If a CIO were at the table, they’d be wondering if the other organization was application ready. In the case of a merger, what’s at stake is literally the helm of the newly formed company:
It's the CIO's role to audit both of the IT organizations and determine which culture should prevail. In the airline merger, this happened, and the nimble and more agile organization came out on top. That decision has greatly benefited the newly merged company.
Third, functionality is more than just plugging in a phone or setting up email accounts. Where the reputation of the new organization is at stake, IT is instrumental to a smooth transition. This reality comes into play whether the acquired company is a global, multi-million dollar company, or just a standard mid-sized business.
A final concern is the loss of human capital. In other words, a CIO can help identify those on the IT team with exceptional potential who may be spooked by the merger/ acquisition.