Whether it's Facebook and WhatsApp or Burger King and Tim Horton's, we're living in a business culture that hinges on the next merger or acquisition, with hundreds of millions to billions of dollars at stake.
All too often, however, CIOs and IT leaders are not part of the planning for mergers or acquisitions. In the fast-paced excitement of executing the deal, IT priorities like application rationalization and operations integration can be viewed as an afterthought.
Waiting to include input from the CIO until late in the due diligence process – or even after the deal is made – is usually a recipe for disaster, only adding to the high percentage of acquisitions that fail to meet target objectives.
Simply put, CIOs need a seat at the table during merger or acquisition planning. Here's why.
1. The CEO's not asking the right questions
Do the CEO and the due diligence team know how old the other company's data centers are, and how urgently a significant investment must be made? Do they know all of the organization's enterprise applications, when licenses will expire and what the maintenance fees are? What about something as simple as the enterprise's hundreds or thousands of laptop computers? In general, does the CEO know when equipment warranties will expire and when millions of dollars must be spent on upgrades?
These are questions a CIO is ready to answer if asked to participate in an acquisition planning process. The insights gleaned from a deep-dive into the IT organization of the potential acquisition can add up to hundreds of millions of dollars, and may even affect the final purchase price.
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As vice president of data center solutions, Fred Latala leads a team that helps clients address the challenges and optimize the opportunities that legacy and next generation data centers face. This team brings together professionals across the disciplines of strategy, ... View Full Bio