CXO

10 things IT needs to do during a merger

A merger or acquisition can unleash an avalanche of complex issues for IT departments. Here are 10 survival tips to minimize the disruptions and help preserve your sanity.


hero
Image: iStockphoto.com/maxsattana

Business decisions to merge or to acquire are almost never made for IT reasons. But operationally, IT quickly becomes a major factor. Many technical IT considerations are involved, as well as political and risk management factors. Here are 10 items you should have on your checklist if your company is active in mergers and acquisitions.

1: Be transparent

Even if your company is the acquiring company, mergers and acquisitions inspire fear among employees—including IT staff. Whatever staff decisions are looming, be as transparent as possible so you don't create an environment of secrecy and rumors.

2: Do staff planning—and let everyone in on the planning as soon as you can

As soon as there is a clear plan, communicate to employees. If a merger or acquisition means some employees will change positions, let them know. If there are employees who stand to lose jobs, let them know—and arrange to actively help them find new employment. If possible, avoid terminating employees because of mergers and acquisitions. It's better to redeploy them elsewhere in the company. You and your staff will feel better about it.

3: Check governance compatibility, not just systems

Whenever IT systems from different companies must be made to work with each other, the focus is on technical systems compatibility. However, especially if you're in a highly regulated industry like healthcare, insurance, or finance, equal billing should be given to compatibility of security and governance practices between the two organizations.

4: Consider end-customer and investor worries

It's easy for IT managers to get caught up in meeting deadlines for system migrations and conversions that come about in mergers and acquisitions and to forget about the outside world of investors and customers who are wondering what doing business with the new company (and its systems) will be like. If there are system complications, plans should be in place to deal with political and people matters as well as the technical problems.

5: Have a failover plan

System migrations and conversions seldom work flawlessly when the IT systems of two companies are blended. This is why it's crucial to have failover plans for all mission-critical systems that can be immediately activated if the necessity arises.

6: Decide which systems you won't continue... and get agreement

From a technical and even a business standpoint, it might appear straightforward to decide which systems are mission critical and must be continued and which can be done away with. However, it's equally important to remember that most of these systems have internal supporters. Never put yourself in a position where you unilaterally make choices on which systems to unplug. Instead, take the time to gather together users so everyone can collectively agree on the decisions.

7: Touch base with vendors and gauge cooperation

In most mergers and acquisitions, the two companies involved have at least several systems that do the same thing but that are from different vendors. Vendors don't like to lose customers, so if a decision is made to terminate a particular vendor's system, you should first perform due diligence on how cooperative that vendor is going to be. Lack of vendor cooperation and responsiveness can extend the time of a system migration or conversion for weeks and even months.

8: Make disaster recovery provisions and update your DR plan

Failover provisions must be made during system migrations and conversions. But at the same time, it's important to be updating the long-term disaster recovery plan to incorporate the addition of a new organization.

9: Secure systems and networks

With the addition of a new organization, there are also new networks and network nodes to look after. One of the greatest security exposures companies face post-acquisition is ensuring that there are no unsecured backdoors or open ports into corporate networks. This can easily happen after an acquisition, because there is so much IT ground to cover that a backdoor can easily be overlooked.

10: Consider the possibility of sabotage

No one likes to consider employee malice or sabotage, but that can happen during a merger or an acquisition because there are usually at least some employees who are upset. The possibility of employee sabotage is highest in IT, where significant damage can be done to systems. If you feel that you have at-risk areas in your organization, the activities in them should be closely monitored. If a potential sabotage begins to unfold, you need to act swiftly and call in outside expertise if necessary. Do not try to handle the entire situation yourself.

Also read...

IT tips for M&A

Have you guided your IT department through the tricky waters of a merger or acquisition? Share your experiences and advice with other IT pros.

About Mary Shacklett

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...

Editor's Picks

Free Newsletters, In your Inbox