M&A Information Technology Best Practices E-Book

Janice M. Roehl-Anderson

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Finance Editions
• Sprache: Englisch

Seitenzahl: 764

Veröffentlichungsjahr: 2013

Beschreibung

Add value to your organization via the mergers & acquisitions IT function As part of Deloitte Consulting, one of the largest mergers and acquisitions (M&A) consulting practice in the world, author Janice Roehl-Anderson reveals in M&A Information Technology Best Practices how companies can effectively and efficiently address the IT aspects of mergers, acquisitions, and divestitures. Filled with best practices for implementing and maintaining systems, this book helps financial and technology executives in every field to add value to their mergers, acquisitions, and/or divestitures via the IT function. * Features a companion website containing checklists and templates * Includes chapters written by Deloitte Consulting senior personnel * Outlines best practices with pragmatic insights and proactive strategies Many M&As fail to meet their expectations. Be prepared to succeed with the thorough and proven guidance found in M&A Information Technology Best Practices. This one-stop resource allows participants in these deals to better understand the implications of what they need to do and how

Leseprobe

Table of Contents

Series Page

Title Page

Copyright

Preface

This Book's Setup

Acknowledgments

PART I: Introduction

Chapter 1: Introduction to the IT Aspects of Mergers, Acquisitions, and Divestitures

Role of IT in M&A

Due Diligence

Integration/Separation Planning

Integration/Separation Execution

Wrapping It Up

Chapter 2: The Role of IT in Mergers and Acquisitions

Quest to Capture Synergies

Capturing the Benefits

Wrapping It Up

Chapter 3: Aligning Business and IT Strategy during Mergers, Acquisitions, and Divestitures

The Business-Aligned Integration Model

Enterprise Blueprint and IT Alignment

IT's Role in Functional Blueprinting

Decision Making and Business Alignment

Business Alignment in Due Diligence

Wrapping It Up

Chapter 4: Mergers and Acquisitions IT Strategy, Approach, and Governance: IT and Its Customers

Strategy

Approach

Governance

Finance

Operations

Human Resources

Information Technology

Wrapping It Up

PART II: Information Technology's Role in Mergers, Acquisitions, and Divestitures

Chapter 5: IT Due Diligence Leading Practices

Objectives and Complexities of IT Due Diligence

Areas of Investigation

Proprietary or Product Technology–Driven Due Diligence

Impact of Transaction Type on the Due Diligence Investigation

Investigation for Strategic Buyers versus Financial Buyers

Considerations of Planning IT Due Diligence

Considerations of Conducting IT Due Diligence

Considerations of Finalizing IT Due Diligence

Tying Due Diligence to the Next Steps in the Post-Merger Process

Wrapping It Up

References

Chapter 6: IT Infrastructure Aspects of Mergers, Acquisitions, and Divestitures

IT Infrastructure Blueprinting

IT Infrastructure Planning

IT Infrastructure Dependencies

Wrapping It Up

Chapter 7: M&A IT and Synergies

IT's Role and Contribution to Synergy Capture

Synergy Capture and Benefits Tracking during the Merger, Acquisition, and Divestiture Lifecycle

Wrapping It Up

Chapter 8: Supporting Business Objectives with M&A-Aware Enterprise Architecture

Sources of IT-Related Synergies during M&A

Post-Merger IT Integration Planning: The Model Makes the Difference

M&A-Aware Enterprise Architecture Models

Divestitures and the Enterprise Architecture Frameworks

Wrapping It Up

Chapter 9: The Importance of a Tested IT Strategy and Approach for Mergers, Acquisitions, and Divestitures

M&A IT Organization and Strategy

A Tested and Repeatable Approach for IT Integrations

A Tested and Repeatable Approach for IT Divestitures

Wrapping It Up

Chapter 10: Cloud Considerations for M&A IT Architecture

Understanding Cloud Solutions

Types of Cloud Solutions

Cloud Solution: Potential Benefits

Opportunity during Post-M&A Integration

Cloud Solutions for Post-M&A Plug-and-Play IT Frameworks

Determining Suitability for Cloud Solutions

Assessing Cloud Migration Timing

Establishing a Cloud Strategy

Evaluating Cloud Providers

Cloud Solution Success Factors

Wrapping It Up

Chapter 11: Data Implications of Mergers and Acquisitions

Criticality of Data Management in M&A Transactions

Data Governance and Organizational Considerations

Data Confidentiality, Privacy, Security, and Risk Management

Data Archiving Requirements

Data Management Road Map

Customer Data Considerations

Wrapping It Up

Chapter 12: Using M&A to Streamline the Applications Portfolio

Overview of an Applications Rationalization Program

Achieving Cost Synergies through Applications Rationalization

Achieving Operational Synergies through Applications Rationalization

Technology and Cost Impact in a Divestiture Event

Emerging Trends

Best Practices for Applications Rationalization in an M&A Scenario

Wrapping It Up

Chapter 13: Third-Party Contracts in M&A: Identifying and Managing Common Implications

Challenges Inherent in Different Types of M&A Transactions

Typical Realities

Primary Challenges

Tackling Challenges

Program Management

Wrapping It Up

Case Studies

Lessons Learned

Chapter 14: M&A IT Architecture and Infrastructure: Developing and Delivering Transition Services Agreements

Plan Early and Resource Appropriately

Foster Deal Team and Business Collaboration to Document Appropriately

Price Services Conservatively

Establish a Practical Governance Approach

Plan Exits and Remove Stranded Costs

Wrapping It Up

Chapter 15: Day 1 Implications for IT Functions

Top Day 1 Priorities for IT

Wrapping It Up

Chapter 16: Transition Services Agreement (TSA)—Untangling the Web

Key Considerations for Drafting an Effective TSA

Structuring the TSA

Managing TSAs

Governance of TSA Services through a Parallel Structure

Rationale for Accelerated Exit of a TSA

Key Considerations for TSA Exit

Wrapping It Up

Chapter 17: IT Risk, Security, and Controls in M&A: Identifying and Managing Common Considerations

Understanding the IT Risk, Security, and Controls Current State

Practices for Managing IT Risk, Security, and Control Considerations

Wrapping It Up

PART III: The People Aspects of Mergers, Acquisitions, and Divestitures

Chapter 18: The Role of the CIO in Mergers, Acquisitions, and Divestitures

The Double-Duty Role

The Internal Role

The External Role

Some Lessons Learned

Wrapping It Up

Chapter 19: The Role of CFO

Strategist Face

Catalyst Face

Operator Face

Steward Face

Wrapping It Up

Chapter 20: Managing the People Side of IT M&A

Key Priority: Communicating for Impact

Merger Stages

Effective M&A Communication

Key Priority: Defining the Future-State IT Organization

Steps in M&A Organization Design

Key Priority: Assessing and Selecting IT Talent

Key Priority: Managing Change

Start with Your Leadership Team

Transition Employees

Consider Cultural Implications

Assess Integration Progress

Wrapping It Up

Chapter 21: Planning for Business Process Changes Impacting Information Technology

Pre-Day 1 Planning

Day 1 Integration Imperatives

Long-Term Integration Requirements

Wrapping It Up

PART IV: M&A IT Project Governance, Testing, and Business Intelligence

Chapter 22: Integration Management Office Best Practices

Roles and Responsibilities

Key Activities

Sample IMO Templates and Deliverables

Managing the Deal

Wrapping It Up

Chapter 23: IT Program Governance during the Deal

Establish Governance Model

Establish the Program Management Office

Execute the Plan

Wrapping It Up

Chapter 24: Important Role of Data in an M&A Transaction

Current Challenges and Lost Opportunities

Top 10 Ways to Use Information Management to Improve M&A

Wrapping It Up

Chapter 25: Overview of Testing

Types of Testing

Testing Functions and Tools

Test Preparation Activities

Timing of Testing

Wrapping It Up

PART V: Conclusion

Chapter 26: Why Mergers, Acquisitions, and Divestitures Fail, and Considerations to Help Avoid a Similar Fate

M&A Risks

Common Pitfalls

Critical Success Factors

Wrapping It Up

Chapter 27: M&A IT Key Success Factors

Key Success Factors

Wrapping It Up

Chapter 28: M&A IT, Summing It All Up

Best Practices

Best Practices to Be Considered Prior to the Deal

M&A IT Strategy, Approach, and Governance Best Practices

M&A IT Security and Privacy Implications Best Practices

M&A IT and Synergies Best Practices

M&A IT Contracts Best Practices

M&A IT Organizational Implications Best Practices

Best Practices to Consider in Order to Execute the Deal

Lessons Learned

Wrapping It Up

Appendix A: M&A IT Playbook Overview

Scope of the Playbook

M&A Playbooks Should Be Alive

Variation in M&A IT Playbook Considerations Due to Differences in Types of M&A Deals

Deal Type—IT Divestures

Tools and Templates

Wrapping It Up

Appendix B: Sample M&A IT Checklists

IT Due Diligence

IT Integration Readiness

IT Divestiture Readiness

IT Transition Services Agreements (TSAs)

Data Requirements

Wrapping It Up

Appendix C: M&A IT Sample Case Studies

Introduction

Case Studies

Wrapping It Up

About the Editor

About the Website

Index

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Library of Congress Cataloging-in-Publication Data:

M&A information technology best practices / Janice M. Roehl-Anderson, editor.

pages cm. — (Wiley finance series)

Includes index.

ISBN 978-1-118-61757-1 (cloth) – ISBN 978-1-118-74095-8 (ePDF) – ISBN 978-1-118-74106-1 (ePub) – ISBN 978-1-118-69202-8 (o-Book) 1. Information technology–Management. 2. Consolidation and merger of corporations. 3. Business enterprises. I. Roehl-Anderson, Janice M., editor.

HD30.2.M3 2013

004.068′1—dc23

2013019139

Preface

One of the most important aspects of many executives' jobs can be making sure a merger, acquisition, or divestiture is successfully completed and anticipated benefits are realized. Additionally, these executives need to help ensure that the information technology (IT) aspects of the deal are appropriately addressed.

In 2012 alone, the global deal volume was over $2.6 trillion.1 Given the increasing importance of IT over the past several years, there has been a significant amount of change in how systems impact the ultimate success (or failure) of a transaction. As a result, it is hard to stay abreast of the latest system trends and best practices2 for mergers, acquisitions, and divestitures. This book is focused on providing executives with an understanding of some of the most important system-related areas that can impact a merger, an acquisition, or a divestiture.

This Book's Setup

This book has been written to serve as a guide to mergers, acquisitions, and divestitures for executives and their direct reports. It is written in nontechnical terms and focused on helping facilitate successful deals by appropriately leveraging the IT function throughout the transaction. In short, it is a guide to IT best practices for mergers, acquisitions, and divestitures.

This book is divided into the following parts:

Part I: Introduction (Chapters 1 to 4):

Many organizations can fail to successfully address the systems aspects of a merger, acquisition, or divestiture. This part includes a detailed discussion of the IT aspects of deals, the role of IT during those deals, how business and IT strategy can be aligned during a deal, and some key components of how IT needs to manage its operations during a deal.

Part II: Information Technology's Role in Mergers, Acquisitions, and Divestitures (Chapters 5 to 17):

Information technology generally plays a critical role in the successful completion of a deal. As a result, it is important the IT area be included from deal conception to closure. In this part of the book the following key topics are discussed:

The importance of conducting thorough IT due diligence prior to deal closure.

Why it is important to assess and address the IT infrastructure (e.g., the hardware, software, and networks) prior to, during, and after the deal closes.

How IT can help capture significant synergies, including rationalizing the applications portfolio.

The importance of considering cloud computing as part of the deal, and why the data aspects of the transaction must be addressed up front.

An overview of third-party contracts and why they need to be considered during any deal.

Day 1 and Day 2 IT implications and the importance of transition services agreements (TSAs).

This part concludes with an overview of the IT-related risk, security, and control aspects of a merger, acquisition, or divestiture and why they need to be addressed.

Part III: The People Aspects of Mergers, Acquisitions, and Divestitures (Chapters 18 to 21):

One of the most important aspects of a merger, acquisition, or divestiture is addressing the people aspects of the deal. It is imperative for executives to understand the people-related components of these deals, whether they are the buyer or the seller. This part of the book contains overviews of and best practices related to the following aspects of these deals: the role of the CIO and CFO in mergers, acquisitions, and divestitures; an overview of how to manage the people side of the deal; and the importance of planning business process changes impacting IT.

Part IV: M&A IT Project Governance, Testing, and Business Intelligence (Chapters 22 to 25):

In this part, we review a number of topics critical to the success of a deal: program management office (PMO) best practices, the importance of strong IT governance during the deal, the business intelligence–related aspects of a deal, and the importance of testing the new systems.

Part V: Conclusion (Chapters 26 to 28):

This part of the book covers a number of topics that are important to any executive involved with a merger, acquisition, or divestiture: why deals fail and how to try to avoid a similar fate; the critical success factors for a merger, acquisition, or divestiture; and an overview of the key aspects the deals.

This book also includes valuable appendixes for readers as they embark on a merger, acquisition, or divestiture, including:

Appendix A: An overview of an IT playbook that can be used to help guide the IT team during the deal.

Appendix B: Sample IT checklists that can assist companies with making sure they are addressing the key aspects of a deal.

Appendix C: Case studies.

Notes

1 “Headwinds Put Crimp on Global M&A Deals,” Anapreeta Das and Dana Cimilluca Wall Street Journal, January 2, 2013.

2 “Best practices” represent the contributing authors' collective experience of what works in the real world and hundreds of years of their combined time facilitating the successful delivery of information technology projects.

Acknowledgments

Given the rapidly changing merger, acquisition, and divestiture environment, it was critical for the material in this book to be as timely and relevant as possible and also to represent the collective 200-plus years of experience of the contributing authors. The contributing authors, listed here in alphabetic order, wrote the chapters as follows:

Mark Andrews, Director, Deloitte Consulting LLP: Chapter 5, “IT Due Diligence Leading Practices”

Devi Aradada, Consultant, Deloitte Consulting LLP: Appendix B, “Sample M&A IT Checklists”

Jason Asper, Principal, Deloitte Consulting LLP: Chapter 3, “Aligning Business and IT Strategy during Mergers, Acquisitions, and Divestitures”

Luke Bates, Senior Consultant, Deloitte Consulting LLP: Chapter 27, “M&A IT Key Success Factors”; Chapter 28, “M&A IT, Summing It All Up”

Peter Blatman, Principal, Deloitte Consulting LLP: Chapter 2, “The Role of IT in Mergers and Acquisitions”

Jim Boland, Manager, Deloitte Consulting LLP: Chapter 7, “M&A IT and Synergies”

Mike Brown, Principal, Deloitte Consulting LLP: Chapter 10, “Cloud Considerations for M&A IT Architecture”

Justin Calvin, Manager, Deloitte Consulting LLP: Chapter 28, “M&A IT, Summing It All Up”

David Caruso, Manager, Deloitte Consulting LLP: Chapter 17, “IT Risk, Security, and Controls in M&A”

Kevin Charles, Senior Manager, Deloitte Consulting LLP: Chapter 14, “M&A IT Architecture and Infrastructure: Developing and Delivering Transition Services Agreements”

John Clark, Partner, AERS: Chapter 17, “IT Risk, Security, and Controls in M&A”

Sandeep Dasharath, Senior Consultant, Deloitte Consulting LLP: Chapter 15, “Day 1 Implications for IT Functions”

Chris DeBeer, Senior Manager, Deloitte Consulting LLP: Chapter 4, “Mergers and Acquisitions IT Strategy, Approach, and Governance: IT and Its Customers”

Ninad Deshmukh, Consultant, Deloitte Consulting LLP: Chapter 13, “Third-Party Contracts in M&A: Identifying and Managing Common Implications”

Habeeb Dihu, Senior Manager, Deloitte Consulting LLP: Chapter 28, “M&A IT, Summing It All Up”

Sascha Elsing, Director, Deloitte Consulting LLP: Chapter 11, “Data Implications of Mergers and Acquisitions”

Jamie Fox, Senior Manager, AERS: Chapter 17, “IT Risk, Security, and Controls in M&A”

Sejal Gala, Senior Manager, Deloitte Consulting LLP: Chapter 15, “Day 1 Implications for IT Functions”

Lynda Gibson, Director, Deloitte Consulting LLP: Chapter 24, “Important Role of Data in an M&A Transaction”

Ronald Goldberg, Principal, Deloitte Consulting LLP: Chapter 7, “M&A IT and Synergies”

Sreekanth Gopinathan, Senior Consultant, Deloitte Consulting LLP: Appendix B, “Sample M&A IT Checklists”

Chelsea Gorr, Manager, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

Irwin Goverman, Principal, Deloitte Consulting LLP: Chapter 18, “The Role of the CIO in Mergers, Acquisitions, and Divestitures”

Colin Hartnett, Principal, Deloitte Consulting LLP: Chapter 7, “M&A IT and Synergies”

Mushtaque Heera, Specialist Leader, Deloitte Consulting LLP: Chapter 6, “IT Infrastructure Aspects of Mergers, Acquisitions, and Divestitures”

Sarah Hindley, Principal, Deloitte Consulting LLP: Chapter 20, “Managing the People Side of IT M&A”

Venky Iyer, Specialist Leader, Deloitte Consulting LLP: Chapter 12, “Using M&A to Streamline the Applications Portfolio”

Ramkumar Jayaraman, Manager, Deloitte Consulting LLP: Chapter 13, “Third-Party Contracts in M&A: Identifying and Managing Common Implications”

Matthew A. Jones, Consultant, Deloitte Consulting LLP: Chapter 26, “Why Mergers, Acquisitions, and Divestitures Fail, and Considerations to Help Avoid a Similar Fate”

Varun Joshi, Senior Manager, Deloitte Consulting LLP: Chapter 1, “Introduction to the IT Aspects of Mergers, Acquisitions, and Divestitures”

Joseph Joy, Director, Deloitte Consulting LLP: Chapter 13, “Third-Party Contracts in M&A: Identifying and Managing Common Implications”; Chapter 17, “IT Risk, Security, and Controls in M&A”; Appendix A, “M&A IT Playbook Overview”

Suseela Kadiyala, Specialist Leader, Deloitte Consulting LLP: Chapter 20, “Managing the People Side of IT M&A”

Scott Kaufman, Business Analyst, Deloitte Consulting LLP: Chapter 17, “IT Risk, Security, and Controls in M&A”

Blair Kin, Senior Manager, Deloitte Consulting LLP: Chapter 21, “Planning for Business Process Changes Impacting Information Technology”

Pavel Krumkachev, Principal, Deloitte Consulting LLP: Chapter 8, “Supporting Business Objectives with M&A-Aware Enterprise Architecture”; Chapter 9, “The Importance of a Tested IT Strategy and Approach for Mergers, Acquisitions, and Divestitures”

Rick Kupcunas, Director, Deloitte Consulting LLP: Chapter 6, “IT Infrastructure Aspects of Mergers, Acquisitions, and Divestitures”

Manish Laad, Senior Manager, Deloitte Consulting LLP: Appendix C, “M&A IT Sample Case Studies”

David Lake, Senior Manager, Deloitte Consulting LLP: Chapter 22, “Integration Management Office Best Practices”

Nnamdi Lowrie, Principal, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

Eugene Lukac, Specialist Leader, Deloitte Consulting LLP: Chapter 2, “The Role of IT in Mergers and Acquisitions”

Abhishek Mathur, Manager, Deloitte Consulting LLP: Appendix C, “M&A IT Sample Case Studies”

Angela Mattix, Senior Manager, Deloitte Consulting LLP: Chapter 25, “Overview of Testing”

Olivier May, Principal, Deloitte Consulting LLP: Chapter 14, “M&A IT Architecture and Infrastructure: Developing and Delivering Transition Services Agreements”

Christine McKay, Specialist Leader, Deloitte Consulting LLP: Chapter 13, “Third-Party Contracts in M&A: Identifying and Managing Common Implications”

Nikhil Menon, Manager, Deloitte Consulting LLP: Chapter 26, “Why Mergers, Acquisitions, and Divestitures Fail, and Considerations to Help Avoid a Similar Fate”

Bryce Metro, Business Technology Analyst, Deloitte Consulting LLP: Chapter 28, “M&A IT, Summing It All Up”

Don Miller, Senior Manager, Deloitte Consulting LLP: Chapter 20, “Managing the People Side of IT M&A”

Jennie Miller, Consultant, Deloitte Consulting LLP: Chapter 16, “Transition Services Agreement (TSA)—Untangling the Web”

Michael H. Moore, Manager, Deloitte Consulting LLP: Chapter 4, “Mergers and Acquisitions IT Strategy, Approach, and Governance: IT and Its Customers”

Kelly Moynihan, Senior Consultant, AERS: Chapter 17, “IT Risk, Security, and Controls in M&A”

Joydeep Mukherjee, Senior Manager, Deloitte Consulting LLP: Chapter 12, “Using M&A to Streamline the Applications Portfolio”

Eric Niederhelman, Business Analyst, Deloitte Consulting LLP: Chapter 28, “M&A IT, Summing It All Up”

Shalva Nolen, Senior Manager, Deloitte Consulting LLP: Chapter 8, “Supporting Business Objectives with M&A-Aware Enterprise Architecture”; Chapter 9, “The Importance of a Tested IT Strategy and Approach for Mergers, Acquisitions, and Divestitures”; Appendix A, “M&A IT Playbook Overview”; Appendix B, “Sample M&A IT Checklists”

Nadia Orawski, Senior Manager, Deloitte Consulting LLP: Chapter 27, “M&A IT Key Success Factors”; Chapter 28, “M&A IT, Summing It All Up”

Tammie Potvin, Principal, Deloitte Consulting LLP: Chapter 20, “Managing the People Side of IT M&A”

Nitin Prabhakar, Specialist Leader, Deloitte Consulting LLP: Chapter 8, “Supporting Business Objectives with M&A-Aware Enterprise Architecture”; Chapter 9, “The Importance of a Tested IT Strategy and Approach for Mergers, Acquisitions, and Divestitures”

Michael Proppe, Manager, Deloitte Consulting LLP: Chapter 20, “Managing the People Side of IT M&A”

Wes Protsman, Specialist Leader, Deloitte Consulting LLP: Chapter 3, “Aligning Business and IT Strategy during Mergers, Acquisitions, and Divestitures”

Sunil Rai, Senior Manager, Deloitte Consulting LLP: Chapter 7, “M&A IT and Synergies”

Prasanna Rajappa, Senior Consultant, Deloitte Consulting LLP: Appendix C, “M&A IT Sample Case Studies”

Stephen Ronan, Manager, Deloitte Consulting LLP: Chapter 7, “M&A IT and Synergies”

Rich Rorem, Principal, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

Heith Rothman, Senior Manager, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

Mauro Schiavon, Senior Manager, Deloitte Consulting LLP: Chapter 22, “Integration Management Office Best Practices”

Rajat Sharma, Manager, Deloitte Consulting LLP: Chapter 8, “Supporting Business Objectives with M&A-Aware Enterprise Architecture”; Chapter 9, “The Importance of a Tested IT Strategy and Approach for Mergers, Acquisitions, and Divestitures”

Saurav Sharma, Manager, Deloitte Consulting LLP: Chapter 1, “Introduction to the IT Aspects of Mergers, Acquisitions, and Divestitures”

Simon Singh, Manager, Deloitte Consulting LLP: Chapter 16, “Transition Services Agreement (TSA)—Untangling the Web”; Appendix A, “M&A IT Playbook Overview”

Jeffry Sprengel, Specialist Leader, Deloitte Consulting LLP: Chapter 6, “IT Infrastructure Aspects of Mergers, Acquisitions, and Divestitures”

David Sternberg, Specialist Leader, Deloitte Consulting LLP: Chapter 5, “IT Due Diligence Leading Practices”

Venkat Swaminathan, Senior Manager, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

Trevear Thomas, Principal, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

Anil Tondavadi, Manager, Deloitte Consulting LLP: Chapter 24, “Important Role of Data in an M&A Transaction”

Mike Trisko, Specialist Leader, Deloitte Consulting LLP: Chapter 6, “IT Infrastructure Aspects of Mergers, Acquisitions, and Divestitures”

John Uccello, Senior Manager, Deloitte Consulting LLP: Chapter 23, “IT Program Governance during the Deal”

Nikhil Uppal, Consultant, Deloitte Consulting LLP: Chapter 16, “Transition Services Agreement (TSA)—Untangling the Web”; Appendix A, “M&A IT Playbook Overview”

Mia Velasquez, Business Analyst, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

Ted Veterano, Senior Manager, Deloitte Consulting LLP: Chapter 12, “Using M&A to Streamline the Applications Portfolio”

Laurel Vickers, Senior Manager, Deloitte Consulting LLP: Chapter 20, “Managing the People Side of IT M&A”

Chris Vu, Manager, Deloitte Consulting LLP: Chapter 24, “Important Role of Data in an M&A Transaction”

Colin Whiteneck, Manager, Deloitte Consulting LLP: Chapter 12, “Using M&A to Streamline the Applications Portfolio”

Jenny Xu, Senior Consultant, Deloitte Consulting LLP: Chapter 19, “The Role of CFO”

In addition, the following individuals should be acknowledged for their outstanding support:

Janet Foutty, Deloitte Consulting LLP, who sponsored this book and provided guidance on its successful completion

Mark Walsh and Asish Ramchandran, Deloitte Consulting LLP, who led our M&A and M&A IT practices and provided support and wisdom

Mark Twomey and Suzanne Kounkel, Deloitte Consulting LLP, who were involved in building the eminence of the book

Mark White, Deloitte Consulting LLP, who has coordinated the marketing plans for the book

Tom Galizia, Deloitte Consulting LLP, who helped support the writing of the book

Jared Faellaci, Deloitte Consulting LLP, who is involved with marketing the book

Tony Scoles, Deloitte Consulting LLP, who provided outstanding legal support

Heidi Boyer, Deloitte Consulting LLP, who coordinated the marketing of the book

Eva Rowe, Deloitte Consulting LLP, who spent untold hours editing the book

Rupen Patil, Deloitte Consulting LLP, who assisted with tracking the chapters

Abhishek Singh, Deloitte Consulting LLP, who assisted with coordinating the development of the website materials

Piper Sims, Deloitte Consulting LLP, from Deloitte's Nerve Center, who helped launch the book

Danika Woods, Deloitte Consulting LLP, who assisted with preparing the book for publication

I am also indebted to the amazing folks at John Wiley & Sons, including:

Sheck Cho, Executive Editor

Stacey Rivera, Development Editor

Helen Cho, Editorial Program Coordinator

Kimberly Monroe-Hill, Senior Production Editor

Their ability to form the vision and guide the writing and editing of this book was beyond compare.

PART I

Introduction

Chapter 1

Introduction to the IT Aspects of Mergers, Acquisitions, and Divestitures

Varun JoshiSaurav Sharma

While many mergers and acquisitions (M&A) transactions fail to deliver value, a lesser-known but by some measures a more important fact is that the axis of value in mergers, acquisitions, and divestitures is more directly linked to getting information technology (IT) right than anything else. Information technology is generally the single biggest cost element in an M&A event (see Exhibit 1.1)—and can be the single biggest enabler of synergies. Getting IT involved early and often throughout the M&A lifecycle can be critical for effective execution and realization of benefits from a merger, acquisition, or divestiture.

Exhibit 1.1 M&A Spend Distribution

Source: Deloitte Analysis

Today, more than ever, the role of IT is under the lens as significant simultaneous disruptive forces are altering the technology landscape, and expectations are higher than ever from IT to enable changing business demand patterns. Disruptive technologies such as cloud computing, social media, mobility, and big data require a fundamental shift in the delivery and consumption of IT services. Business users now expect cheaper and more rapid deployment of technology to support business objectives through cloud computing and everything as a service (XaaS) platforms. Social technologies are enabling opportunities for collaboration, communication through social networks—the connected web of people and assets—and providing vehicles for discovering, growing, and propagating ideas and expertise. Mobility trends such as bring your own device (BYOD) are redefining mobile device management and enterprise security and privacy policies and procedures. Finally, through the application of big data, enterprises are looking to harness unstructured data formats that are not easily analyzed through existing business intelligence/analytics tool implementations.

These disruptive trends provide IT organizations with new tools to add to their arsenals, and through their appropriate utilization IT organizations can increase the likelihood of achieving three critical goals of an M&A transaction:

1. Execute an issue-free Day 1.

2. Enable the realization of synergy targets.

3. Establish future-state platforms to support business growth.

Role of IT in M&A

While the drivers for M&A can be varied, at the most fundamental level an M&A transaction is largely about realization of business benefits through synergy capture—whether cost savings or growth/strategy enablement (or both). The heavy reliance on information technology (IT) for business operations, management information, and financial reporting in today's business environment makes IT a priority item in the M&A agenda. An M&A transaction can add a significant degree of complexity to preexisting and often complex IT environments. Integrating or carving out complex systems requires a very strong focus on IT. However, companies often neglect or give low priority to IT during the early stages of the M&A lifecycle. The lack of focused IT involvement early on can have serious consequences, including: