CIOs face major challenges during mergers and acquisitions (M&A), and failures occur for many reasons. In some cases, companies are not a good fit—business leaders just cannot decide on how best to take advantage of their combined strengths. In others, it’s because IT organizations became too bloated and inefficient. But one thing is certain: too many M&A failures are simply the result of a lack of planning and foresight.
Here are three of the most common mistakes CIOs make during M&A.
Given the intense pressure and uncertainty present during mergers and acquisitions, it is important to remember the end goal of IT is to drive business goals. M&A can create numerous problems that lead to unhappy employees, inefficiency, and abandoned projects. However, by aligning technology integrations with core business objectives, enumerating priorities, and basing decisions on data, companies can have more successful integrations and emerge from the transitions stronger and better able to face new challenges.
CIOs play a particularly important role in ensuring that the transition is a success, but many IT leaders face an overwhelming number of projects and goals during a merger or acquisition. This can lead to a lack of focus that in turn leads to abandoned projects and inefficiency. Many companies undertake a merger or acquisition without fully defining the goals of the process. Without pre-established metrics, there is no way to know what success looks like and no way to formulate actionable strategies to get there. Before making any decisions about integration, CIOs should run a structured analysis of the situation and ask themselves the following questions:
Proper planning is the key to achieving the desired outcome. Many CIOs fail to understand or properly prepare for the immense change that the transition will bring. This inevitably leads to significant problems when the reality of the merger or acquisition demands action. Avoiding failure requires a commitment to creating a viable integration plan and the means to follow through on it.
Companies need to have effective, tested strategies in place to reduce risks and lead to positive outcomes. Contact WGroup’s M&A experts for insight in planning a successful merger or acquisition.
Domenic leads the firm’s research, marketing, and communications function as WGroup’s CMO. He is a skilled strategic advisor, a thought leader on IT transformation, and a subject matter expert on a broad range of topics including M&A and Run Optimization. He works closely with WGroup’s consultants, and helps clients drive their businesses forward by optimizing business performance, creating value, and achieving cost savings.