How CIOs Can Support the 6 Phases of a Merger and Acquisition

How CIOs can support MnAs | Binary Tree


We’ve said it before—mergers and acquisitions are some of the toughest projects an organization will ever face. Executives and shareholders often have sky-high hopes for the outcome of a merger, whether that’s to grow capabilities, do things better, or expand to new markets. But a lot of things need to line up before you’ll start seeing the benefits.

Plus, more than 50% of the effort in these types of projects relies in some shape or form on IT. As Gartner says, IT won’t make the deal, but it can absolutely break it. So here are some actions CIOs can take before, during, and after a merger—all of which can greatly up the chances for success.

Get ahead of the game

First, a note about something CIOs can be doing now, even well before an M&A is a mad glint in your CEO’s eye. You don’t have to wait until your execs bring an M&A to you. Instead, bring an M&A process to your executives. See how savvy CIOs get involved earlier in M&A planning.

Phase 1: Scout for and screen targets

This is where you look at publicly available information to decide which organization to buy. Historically, many CIOs were not involved in this phase. But in this digital age, it can be helpful to have a technology perspective up front to check for digital compatibility. A target’s IT maturity can drive what approach you take, whether that’s absorption, merger of equals, etc.

Action items:

  • Be aware of any M&As that might be on the horizon
  • Set criteria to estimate the IT maturity of other orgs
  • Review public info the org has shared, like case studies, presentations, and demos
  • Talk to employees in-house who might have previously worked for the org
  • Use the above info to recommend the type of integration model to use

Phase 2: Do your diligence

This is the “getting to know you” phase. Here, focus on gathering as much information as possible about the target, which will help confirm if you want to make a purchase offer. It’s a great opportunity for the organizations to get to know each other and start building rapport.

Action items:

  • Set up a small team to do an IT audit of the target’s capabilities, assets, and liabilities
  • Do an on-site visit with a clear agenda and list of people to talk with
  • Estimate the required cost and timeline for integration
  • Point to any major integration risks—and ideas to mitigate them
  • Decide if you need to ask for IT transition services from the divesting org (if applicable)
  • Start looking at third-party vendors who could help with the integration

Phase 3: Plan for integration

By this phase, you’ve chosen a target (or are well on your way). Now, you need to plan for an efficient integration, starting with delivering an effective Day 1. This is when the deal legally closes and the orgs start working together as one company.

Action items:

  • Start this phase concurrently with due diligence
  • Plan out all integration activities and assign clear owners and timelines
  • Document the project (activities, timeline, resources, efforts, costs, risks, dependencies)
  • Prioritize activities with mandatory outcomes, like legal, financial, and HR
  • Build in wiggle room, as things are sure to take longer than expected
  • Develop communication and retention strategies for your IT staff
  • Define meaningful leading and lagging success metrics

This is also the time to carefully consider the experience of your IT resources. Have your team members helped mastermind a merger before? And recently? If not, M&As aren’t ideal projects on which to wing it or learn on the job. A better approach is to hire an experienced partner who can walk you through every step. That way, your internal team can learn the ropes from more seasoned resources who have done this before.

Phase 4: Kick off Day 1

This is often the shortest phase, but it’s a critical one. Day 1 sets the tone for your merger. It’s the first day that the organizations come together and start working as one company.

Hands down, the top thing that IT should do for Day 1 is making sure employees across the merging organizations can easily work together. You probably won’t be able to get everyone on the same collaboration platform before the merger kicks off. But you can sync up existing collaboration tools, like email and calendars.

By day 1, employees should be able to:

  • Look up colleagues in a shared directory
  • Send and receive emails under the same brand (email domain)
  • Schedule and update meetings

For more, see 4 messaging must-haves for Day 1 of a ‘no compromise’ M&A.

Phase 5: Do the deeper integration

This phase often takes the longest, usually across several waves that can stretch months or even years. Many organizations tend to have goals for the first 90 to 180 days of the merger, as that’s usually by when execs and stakeholders want to start seeing results.

Action items:

  • Execute your integration plan, ideally on target, on time, and on budget
  • Focus on integrating across people, processes, and systems—not just IT
  • Appoint a well-known, invested business exec as the overall integration program leader
  • Maintain solid oversight and strong program management capabilities
  • Set clear escalation paths to the CEO or exec committee for any blocking issues

Phase 6: Reap the benefits

At this point, it can be tempting to want to put the whole thing behind you. But don’t fall into that mental trap. There are still a few things you can do to help wrap up the merger, and make sure it leads to the benefits you hope.

Action items:

  • Do a postmortem to discover what went well—and what didn’t
  • Document all lessons learned
  • Develop a repeatable M&A playbook that you can apply to later mergers
  • Report ongoing about how you’re doing on the success metrics you defined in phase 3
  • Look for ways to keep optimizing the integration, based on the metrics you see

Engage an expert

Because M&As tend to happen infrequently and need to move quickly, many organizations choose to partner with an expert who does this day in and out. Our friends at Gartner say that more than 50% of organizations reach out for help with IT integration during a merger.

To that end, we at Binary Tree offer end-to-end M&A solutions that can help you:

  • Plan for a smooth 'Day 1'
  • Set up a global address list
  • Integrate your systems after 'Day 1'
  • Get new users up to speed on Office 365

To find out more about how we can help, get in touch.


Source: Gartner. IT Primer on Mergers and Acquisitions, October 2017