Merger Integration

IT plays a vital role in creating a smooth transition for merging organizations. Often, it can be the difference between a merger that succeeds and one that falls short of expectations.

Captavo focuses its support on key areas of IT merger integration, including application, portfolio, infrastructure, IT organization, projects and end-users. We partner with clients to address key technology-related M&A challenges:

  • Planning post-merger integration: Integration plans need to be uniquely tailored to the nature of each deal and needs to begin early in the process. We work with clients to assess existing IT environments and capabilities, and then identify the opportunities and threats of changes in business structure through our due diligence process.

  • Developing IT integration approaches: We work together to develop a tailored strategic IT roadmap and migration plan and to guide the IT decisions and actions required to realize the deal’s maximum value and nothing less.

  • Accelerate integration: We help clients develop an IT integration approach that is closely linked with the business integration plan. With our trademark rigor and objectivity, we estimate category-specific synergies and required investments in advance of action, so that leaders can make necessary trade-offs based on data rather than intuition.

 

Supporting the business case: 

The business case that drives a merger almost certainly depends on significant cost savings—both immediate and long-term. IT ushers these in by combining the two companies IT cost structures, thus driving future cost savings and reducing operational risks.

 

Reducing overlap: 

Merged firms often find that they have many similarities between their IT functions—even when there are seemingly few geographic, industry or product overlaps. Companies can save between 10 and 30 percent by reducing portfolios and outlining the skills and competencies needed for the future IT model.

IT + Business Strategy = Merger Success

 

Captavo Consulting approach to integrating IT requires aligning IT with the newly merged company's business strategy. We used this approach to help several companies save millions of dollars in IT costs while smoothing out often-rocky post-merger transitions. 

Enabling other synergies: 

While investors watch for signs of success or failure in a merger, IT is the "glue" that binds the business together, integrating major business functions, improving communications, enhancing processes, and ensuring that customers receive uninterrupted service. This last point is vital: At the end of the day, a company's customers will decide whether to accept or reject the merged company.

 

Building long-term capabilities: 

IT will help build the combined company's capabilities and operational model. Once the short-term integration work is complete, IT can devote its energy to support the planned business growth of the new company. A cost-effective technology infrastructure is a prerequisite for success.

  • Document the current technology portfolio: This may be one of the most challenging steps in the process. The IT staff and end users  will need to document the technologies that they use to do their jobs.

  • Assess each piece of the current technology: Each part of the existing tech has to be assessed for its business value to the new organization. During this stage, apps and hardware might be categorized into those which should be enhanced, migrated, discarded, and perhaps, temporarily tolerated.

  • Rationalize: After evaluating each piece of current technology, it’s important to provide supporting reasons for decisions. These reasons should be aligned with overall business and IT goals. For example, some processes may be eliminated in order to standardize business processes or to consolidate data and reduce errors.

  • Document the new portfolio: Ensure that the new portfolio gets documented and maintained. In this evolving digital age, this certainly won’t be the last time that a company will go through the rationalization process, so good documentation will make the next process much easier.