Merger, acquisition, and divestiture events require significant IT planning to ensure that the business value of the deal in progress can be realized. Wavestone has helped clients tackle difficult strategic IT challenges at all stages of the M&A process lifecycle. In line with our philosophy of business-driven IT, we design the best-fit approach for each client’s specific deal thesis and business plan. Our primary focus is on maximizing speed to value and capturing synergies to deliver deal value while minimizing risk and business disruption.
M&A Integration Planning
While Wavestone strongly encourages companies to include the IT organization very early in merger integration planning, we have found that this is rarely the case. IT typically gets involved in these processes only after the acquisition and merger decisions have been made, deals have been announced, and the aggressive integration clock has started ticking.
Our experts help clients in these situations quickly assess the technology systems and processes of all parties undergoing integration. We also address prior acquisitions that may not have been fully consolidated. Our approach is to normalize and compare each company’s current IT function across six primary dimensions – organization, process, infrastructure, applications, suppliers, and financials. With this baseline assessment in hand, we factor in the company’s business strategy to determine which elements of IT need to be standard across the integrated company and which parts should be unique to a particular business unit. We then identify redundancies and make recommendations regarding rationalization and consolidation across those dimensions.
Key Elements of Mergers & Acquisition IT Strategies
Carve-Out and Divestiture Planning
Wavestone also helps clients plan spinoffs and divestitures from an IT perspective. In these scenarios, our consultants take a two-pronged approach. Early in the process, we help identify and market existing IT capabilities that enhance the value of the deal. These may include customer engagement systems, process automation or key data repositories, and analytical systems.
Further along in the process, our consultants will plan an orderly separation of the carved-off unit’s IT function from the parent. These separations may include data segregation, systems cloning (application and infrastructure), organizational division, and asset allocation (hardware and software). IT separation also typically involves the creation of a transition services agreement (TSA) to enable a swifter resolution by allowing the parent to perform services for the new organization under a third party contract.
Our experts have also worked directly for spinoff entities to define a new target IT operating model. We can set up a tailored IT function after helping resolve legacy IT issues imposed by its former parent.
Synergy Capture
Even the most carefully developed value creation strategies and synergy models don’t guarantee value delivery. Wavestone will meticulously identify, manage, and execute on synergy opportunities from due diligence through to the integration of the newly-combined entity. Continuous tracking of synergy progress will help keep the focus on the right activities at the right time, including application rationalization, infrastructure consolidation, security parity, and cost synergy realization.
We underpin all mergers and acquisition IT strategies and recommendations with a financial model and business case to determine both the investment required to integrate and the cost synergies achievable in the process. We then help you develop a formal, detailed, and executable integration plan inclusive of a program timeline, resource plan, financial requirements, risk mitigation plan, and communications strategy. Where required, we support our clients with program management and the execution of all integration efforts.
Businesses that work with the same partner throughout the IT merger and acquisition process, from due diligence all the way through the post-merger acquisition, reduce their risk of business disruption and increase value opportunity. Wavestone can be that partner as they help clients cut merger and acquisition costs while enhancing process efficiency and boosting speed to value.
The M&A Playbook for IT
Overcome the biggest IT integration challenges and drive business goals.
Featured Expert
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Jeff Romano
Vice President of Consulting
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Jeff Romano brings more than 30 years experience to Wavestone. He has held senior IT management positions in various industries, including an engagement that exceeded $1.9 billion in total contract revenue.
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Jeff Romano brings more than 30 years experience to Wavestone. He has held senior IT management positions in various industries, including an engagement that exceeded $1.9 billion in total contract revenue.
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