The world of M&A is complicated and nuanced. Whether a spin-off, split-off or carve-out, CIOs in particular face incredible complexity when factoring in people and culture, intellectual property, organizational process and especially IT systems and foundational digital solutions. While acquisitions have complexities in merging cultures and systems, many times breaking apart is far more challenging, especially when considering regulatory, legal, privacy and security factors. Integration provides the luxury of time to operate independently and strategically, while a divestiture is driven by the all-important TSA (transition service agreement), which impacts IT more than any other division.
Regardless of the flavor of M&A, CIOs encounter some of their toughest business problems during a divestiture or a merger. Here’s the expert advice you need to know.
Ken Crafford, SFG founding partner, says it’s crucial for CIOs to get ahead of the curve early to understand the direction needed for technology-related activity. Your first step is to work hard to understand the things you can’t manage. That may include:
SFG Partner Mark Egan literally wrote the book on M&A when he contributed a chapter focused on M&A to CIO Perspectives. His advice underscores three main focus areas:
SFG Partner Lars Rabbe says to deeply understand and be true to what the main reasons for M&A action is. “Too often the fog of war distracts from this and the real benefits are never actually achieved,” he says.
During times of change, the unknown is always the biggest challenge. Leaders often struggle with the age-old question: “How do you know what you don’t know?” When planning for a merger, spin-off or carve-out, having an experienced perspective can be a determining factor in success or getting mired in challenges, such as:
The most valuable player on any deal team is someone who’s done it before, a lot. Collectively, SFG partners are the MVPs who’ve worked more than 320 deals for companies large and small. This strategic perspective of the landscape from the CIO/CISO point of view, and access to tried-and-true playbooks build on decades of experience, will help any company approach M&A with efficiency and empathy.
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Author:
Ken Crafford, Mark Eagan, Lars Rabbe 2020
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