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CIOs may not have input into critical business planning, such as the decision to acquire another company. Yet much of the burden of making a smooth transition falls on IT's shoulders.
Companies acquire other companies to expand product portfolios, to fill in vital areas of core competency they think they need, to eliminate competition, to enter into new markets and territories, and so forth. The decisions to pursue acquisition targets are usually explored early on at high-level meetings between CEOs, CFOs, attorneys, and board members. The less strategic C-level officers, like those at the helm of HR and IT, ultimately assume important roles in an acquisition—but they are not usually involved in the early decision-making meetings.
The rationale for this is simple: Strategic business decisions, like an acquisition, are not determined primarily by tactical and other "make happen" operations, like IT.
Nevertheless, once the decision to acquire an organization is made, the ramifications of that decision probably have more impact on IT than on any other department. If IT's job is not done well, failings can influence the opinions of outside stakeholders, industry analysts, and the investment community—all of which are observing how well the parent organization is assimilating the organization that has been acquired.
In other words, CIOs often find themselves in the spotlight, and they're expected to perform in a situation for which they have limited information. Let's look at some of the major acquisition challenges to IT.
Conversion of undocumented and/or very unlike systems
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System conversions are among the most difficult of IT projects. Almost always, you don't have all the information you need. You may also face hostile reactions from IT staff of the company being acquired, as well as from a system vendor that stands to lose an account.
Staff demoralization and sabotage
When IT staff for both the acquiring and acquired companies don't know where they're going to stand after an acquisition or merger is complete, they get anxious and staff productivity and morale begin to drop. This is also a period when the risk of internal sabotage runs higher.
Business process stability
If systems are being replaced in acquired companies, business operations are also affected. This can cause a company to falter in its normal business processes, irritating customers when accounts are handled ineptly. Equally risky is the process of business continuation and disaster recovery, given that there are new systems that may be difficult to document and incorporate in your failover and DR plans.
Different IT organizations have different cultures. When you bring new people together, it takes time to build cohesive teams that deliver optimal performance.
So how can you mitigate these situations to make acquisitions go more smoothly?
Be comfortable in your own job
Often, acquisitions mean that one CIO will be staying and the other will be going. If you're unhappy with your own role in the new organization, you should work with your superiors to resolve any issues of discomfort. If you can't get behind the new plan, it's best to move on.
Communicate with old and new staff—often
You should build bridges with IT'ers in both the acquired and the acquiring organizations. As soon as possible, everyone should be informed of the departmental direction and of the job roles they will be playing in it. This relieves anxiety and assures staff that there will be a place for them. If any staff members lose their jobs, they should be given every support resource available and a fair severance package. Your remaining staff will take note of how these employees are treated.
Go to the cloud
If you can't easily convert an acquired company to your in-house system, consider having the newly acquired company use a more generic cloud-based version of your system that is run by your vendor. The system may not be exactly the same as your internal version, but at least the people in the acquired company will begin learning the basics of the system.
Discuss project progress with other C-level officials
The sooner you do this, the more others will understand and appreciate the acquisition system project load that IT has— and also how these tasks will affect the day-to-day project work that already was on the slate for IT before the acquisition.