Chief information officers (CIOs) should approach organisational mergers, acquisitions and divestments (MA&Ds) as opportunities to strengthen IT assets and boost business profitability, Gartner urged today.

According to new research from the analyst firm, 'Timing Is Everything in Mergers, Acquisitions and Divestments', CIOs who take on the role of integrator from an early stage in the process can improve the success of the overall deal.

The study from Gartner Executive Programs (EXP) notes that integrating the IT systems of two or more enterprises is a vast, complex and potentially costly process and it is a major challenge for the IT departments.

Dave Aron, vice president and research director at Gartner EXP, said: “However, if the process is handled in the right way, it can provide the opportunity to upgrade and update existing systems for overall business benefit. Proactive CIO involvement in the MA&D process can also play a significant role in identifying and reducing information and process-based risks that span multiple business areas, as well as spotting opportunities related to that information.”

A positive approach and attitude towards mergers and acquisitions is one of 10 powerful practices identified by Gartner in MA&D-savvy CIOs. “IS organisations that are MA&D-ready tend to have a CIO who has been engaged in the process from an early stage,” said Aron.
“In such cases, the CIO is ideally placed to both maximise the value of future integrated systems and retain employees who will be of long-term value to the organisation. With MA&D deals on the rise again, CIOs need to understand and influence their enterprise’s MA&D agenda,” he added.

Aron went on to argue that when it comes to mergers, acquisitions and divestments, timing is everything: “Practiced CIOs are more likely to engage, prepare and execute on the process earlier than a classic MA&D timetable would suggest, with a strong bias towards fast, clear decision making and people issues.”

Gartner's 10 distinguishing practices of MA&D experienced CIOs
1. Viewing MA&Ds as an opportunity to provide challenging roles for their staff, improve IT systems and demonstrate the value of the IS organisation.
2. Envisaging and positioning the role of the CIO and IS department as an integrator in the business – not just a functional expert – and therefore a key stakeholder in the deal.
3. Ensuring that the department is MA&D-ready long before a deal is on the table. It should be a key consideration when building a scalable enterprise architecture.
4. Creating and constantly reviewing a set of core strategies that help to build and improve MA&D capability.
5. Ensuring the counterpart CIO is involved early and often, as opposed to keeping them at arms' length.
6. Engaging the most able and experienced staff in the process, supporting their day-to-day responsibilities with contract staff. Heavy reliance on external consultants in the MA&D process makes integration much more risky and expensive, as they lack the deep contextual knowledge.
7. Thinking ahead and evolving an ever more detailed integration plan while the deal is being done.
8. Prioritising decisiveness above accuracy. The CIO needs to move quickly to reduce complexity and minimise uncertainty.
9. Making people and relationships the top priority. Staff retention and morale should be addressed from the outset. Left-brained technologists tend to be less comfortable with ambiguity and have extremely portable skills!
10. Embedding integration projects in the everyday workings of the business. Treating them as separate and special will damage ‘business-as-usual’.