We understand why business leaders have to maintain secrecy on M&As, but does it hurt the business?
Consider a typical M&A scenario: Business leaders have been in talks for 30 days before informing IT that they’re making an acquisition. They have made a number of assumptions about technology, including many of IT’s highest impact areas. IT scrambles to get its bearings and perform due diligence under a tight deadline. IT finds that various cost and scope estimates are off by a few million dollars and spends the next few weeks fixing that mistake, costing the company time and money, and potentially jeopardizing the deal.
Isn’t it odd that technology plays a crucial role in every part of the business today, yet many companies still hold on to old assumptions that IT is not a strategic partner, that technology is something to be addressed later? It’s clear that IT must have a seat at the M&A table from day one. But how?
I would recommend the following:
1. Re-engage the business. CIOs should strive to become a true partner to the business. Start by reaching out to business leaders across the organization to find out what they want to achieve and how IT can help. In your discussions, make M&As a part of the agenda. With your finger on the pulse, you’ll be less likely to be caught unawares and more likely to be included in discussions earlier.
2. Assemble an M&A SWAT team. This is a small, cross-functional team of highly skilled, highly trained individuals across IT, including infrastructure, applications, cloud, and network. 10 or fewer members would be ideal. The purpose of the team is to identify the talent you need beforehand and close any skill gaps before an M&A. Being part of the M&A SWAT team shouldn’t be a full-time job, but members should reserve enough bandwidth to react quickly if the business comes in with an M&A request. If your company has a particularly kinetic M&A strategy, a full-time M&A SWAT team will be necessary.
3. Develop an M&A playbook. The goal here is to ensure that the integration process for every M&A event is consistent and repeatable. With a playbook, the team will know what information to gather and which questions to ask. Without it, teams would be reinventing the wheel every time as different people apply their own approaches. Having a repeatable process will allow IT to get the most out of every M&A event and add more value to the company.
To sum up, CIOs should be involved in M&A talks from day one, but they’ll have to make a case for their inclusion. IT must show that it can add value by working closely with business leaders and making extensive preparations to handle M&As effectively.
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