Part of a blog series.<\/a><\/em><\/p>\n Mergers and acquisitions<\/a>, particularly when it comes to IT, don\u2019t end when you\u2019ve wrapped up due diligence and the ink dries on the contract. After you\u2019ve conducted due diligence, identified synergies, cost savings and innovation potential, and addressed risk factors, it\u2019s time to begin post-merger integration.<\/p>\n Also called M&A integration or post-acquisition integration, this process is critical to ensuring the two former companies operate seamlessly as one and create the expected value for the acquiring business. Much of the IT post-merger integration revolves around infrastructure, software applications, changing business processes<\/a>, and redesigning the company to streamline, add new skills and eliminate redundancies.<\/p>\n Ideally, during the due diligence process, the companies will discuss potential integration options, as well as align the goals and budget for this phase of the project.<\/strong> The reality, however, is the decision of what route to follow often doesn\u2019t take place until after the transaction.<\/p>\n Before getting into integration, both parties must agree on modeling.<\/strong> There are several modeling options for you to consider, but it often has to do with how the acquiring company plans to operate in its end state. Here are a few to choose from:<\/p>\n Once you\u2019ve identified a model, the acquiring company will follow the final steps of a successful assessment approach: designing the future state, building a roadmap and execution plan, and finally executing the roadmap.<\/p>\n Along with completing steps one and two \u2014 the current state assessment during IT Due Diligence<\/a> \u2014 this step covers what the company looks like in terms of IT once you complete the integration. A clear understanding of the objectives and the journey to get there is essential to the ultimate success of IT post-merger integration.<\/p>\n Architect the future state of IT in the following areas:<\/strong><\/p>\n While it may seem like you\u2019ve been creating the integration plan all along, this is the step where you lay everything out in a clear, cohesive and understandable way. It\u2019s imperative to understand your company\u2019s current state and end state goals to determine a roadmap for getting there with the resources and budget allocated.<\/p>\n Elements of this phase include:<\/strong><\/p>\n Once all the pieces are in place, you can begin the post-merger integration. Despite the planning, you must closely manage the final phase of PMI to ensure continuity, continue to assess resource and risk management, and ensure the integration stays on track in terms of schedule and budget.<\/p>\n Without a comprehensive approach encompassing a high level of detail laid out in a post-merger integration plan, a complete understanding of the elements, and how they align, companies expose themselves to unnecessary risk and PMI failure. Companies who don\u2019t effectively plan their PMI IT strategy<\/a> are less likely to achieve revenue targets, marketing objectives, market share and other higher-level company goals.<\/strong><\/p>\n According to Morgan Stanley bankers, the M&A market in 2021 is already on the rebound<\/a> and poised to accelerate. Further, Business Chief Magazine<\/a> reported that according to collated research and a recent Harvard Business Review<\/a> report, the failure rate for mergers and acquisitions sits between 70 percent and 90 percent.<\/p>\n \u201cWithout a clear strategy, effective project management and open communication between stakeholder groups, the merger or acquisition will struggle to deliver the desired results. The process must be transparent, realistic and involve all areas of management if success is to be achieved,\u201d Business Chief noted.<\/p>\n It\u2019s important to remember that no two post-merger integrations are alike, and IT is a critical element in today\u2019s business world.<\/strong> That\u2019s why it\u2019s crucial to lay out the steps, plan, provide appropriate project oversight and continuity assurance, and continue to monitor risks, budget and timeline. Stay the course, continue to be mindful of the overall company goals and follow the proper steps to help ensure a successful PMI.<\/p>\nModeling Options for IT Post-Merger Integration<\/h2>\n
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Step Three: Design the Future State<\/h3>\n
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Step Four: Build a Roadmap and Execution Plan<\/h2>\n
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Step Five: Execute the Roadmap<\/h2>\n
Conclusion<\/h2>\n
\nReady to get started with IT due diligence? Ask yourself these questions first.<\/h4>\n