Why IT Needs A Seat On The M&A Team

Mergers are a fast pace, increasing every year for the past nine years. The number of mergers and acquisitions in the United States has grown for eight consecutive years, reaching an all-time high of 15,558 deals in 2017. A record $2.5 trillion in mergers were announced during the first half of 2018, The New York Times reports.

Understanding The Difference Betweens Mergers, Acquisitions

Although the terms are often used interchangeably, they have slightly different meanings. As Investopedia explains, “a merger occurs when two separate entities (usually of comparable size) combine to form a new, joint organization,” whereas “an acquisition refers to the purchase of one entity by another (usually, a smaller firm by a larger one).”

Mergers of equals aren’t common, but acquisitions (sometimes called takeovers) have a more negative connotation. As a result, both types of deals are increasingly referred to as merger and acquisition (M&A) transactions, rather than just a merger or an acquisition.

IT Challenges Of The Merger Process

And while this is a great way to increase market share and quickly enter new industries, it does create some challenges for IT.

Often IT leaders aren’t included early in the merger process. Without a seat at the table, they aren’t able to identify issues early. Called in too late, this oversight can drive a merger off-track.

If your company is planning an acquisition, make sure IT has a seat at the due-diligence table. With a strong communications plan and the right technology, IT integration can be a key strategic factor in executing a successful M&A.

Benefits Of Including IT On Your Merger Team

Just like the other specialists on the team, having a dedicated IT resource allows them to look at the merger through a technology perspective. They’ll be able to see where there are ways to easily merge systems and can tell when there are conflicting technologies.

They’re also able to evaluate which systems will best serve the newly merged company and can give realistic timelines for when things can be transitioned. They’ll also be able to identify other technology-related areas for cost-savings.

Bringing an IT resource onto the merger team not only saves time, it can save money and contribute to an overall more successful merger.

To learn more about how to use IT strategically for your next merger, download our new eBook, “Make Your Next M&A Painless With These IT Strategies.”

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