Mergers and Acquisitions: IT can make or break

Coming into 2020, business continues to boom. After years of record global merger and acquisition (M&A) growth, it’s set to be another good one for strategic expansion. With major deals like Charles Schwab’s announced merger with TD Ameritrade in late 2019, economists and experts seem to have consensus that while there was a small decline in total M&A from 2018—$4.1 trillion down to $4 trillion globally—momentum has been strong heading into 2020.

According to JP Morgan’s global co-heads of M&A, Hernan Cristerna and Chris Ventresca, the market will be active, with expectations that a more aggressive strategy will return in the future. That means, as companies look for new growth, gain new capabilities or enter new or unproven markets, risk of the unknown is greater. And that unknown is directly affected by the tricky—and vital—integration of the IT organizations.

IT is tasked with a tall order when it comes to M&A. Along with making sure there isn’t a disruption in service to employees and customers, CIOs and IT leaders are also responsible for assessing prior due diligence as well as mitigating risk throughout the integration.

IT must also determine the best ways to support business unit and corporate function assimilation— finance, HR, operations and more. Not to mention the more traditional IT management tasks, like rationalizing hardware and software, plus identifying standard applications for deployment, optimizing software licensing and ensuring compliance.

As enterprises grow through M&A, it’s also not uncommon for business units to retain control over the IT spend allocated to their cost centers. Flexera’s 2020 State of Tech Spend report found that 26 percent of respondents overall had IT spend decentralization (23% in the United States and 32% in Europe), with business units controlling their own IT spend. Add to that that this type of growth brings new technologies into the portfolio, and many organizations are at various stages of digital transformation planning and processing, making the normalization of assets and processes even more demanding.

Talk about having your hands full. With a significant weight of M&A success falling on IT, how do they scale this mountain of requirements, and where can they go to find their footing?

Check out Complete IT Visibility: A Critical Success Factor for Mergers and Acquisitions to find out how technology leaders can get started on the right steps toward successful M&A.