Five things IT leaders need to think about when contemplating the work required to merge two enterprises.
“Mergers and acquisitions are always trickier than anyone ever thinks they are,” says Dan Dalton, a professor at Indiana University’s Kelley School of Business. With this in mind, Dalton offers five things to remember when embarking on an M&A:
1 You’ll need to figure out how you’re going to recover the premium you will have paid in order to acquire the company in the first place.
2 Don’t overestimate the economic synergies (economies of scale, merged workforces [see number 3 below], aggregated resources) you expect to reap.
3 Don’t underestimate the number of good people you will lose. Even if the merger involves two stellar CIOs, there will be only one CIO job.
4 There will be hundreds of new processes and procedures, and every single one of them is certain to upset someone.
5 Your customers and suppliers will want to know what the M&A means for them. And they will almost certainly be reevaluating their relationship with you. Be honest and open and communicative with everyone involved.