M&A Information Technology Best Practices

JANICE M. ROEHL-ANDERSON is a Principal at Deloitte Consulting LLP, coordinating key components of the M&A IT–related services area. She has been responsible for leading some of Deloitte's most complex global mergers, acquisitions, divestitures, and initial public offering projects from a technology perspective. She has written numerous books on controllership and information technology and successfully passed the CPA exam.

• Preface xvAcknowledgments xixPart I IntroductionChapter 1 Introduction to the IT Aspects of Mergers, Acquisitions, and Divestitures 3Varun Joshi and Saurav SharmaRole of IT in M&A 4Due Diligence 6Integration/Separation Planning 8Integration/Separation Execution 16Wrapping It Up 20Chapter 2 The Role of IT in Mergers and Acquisitions 23Peter Blatman and Eugene LukacQuest to Capture Synergies 24Capturing the Benefits 26Wrapping It Up 32Chapter 3 Aligning Business and IT Strategy during Mergers, Acquisitions, and Divestitures 35Jason Asper and Wes ProtsmanThe Business-Aligned Integration Model 36Enterprise Blueprint and IT Alignment 38IT’s Role in Functional Blueprinting 39Decision Making and Business Alignment 43Business Alignment in Due Diligence 43Wrapping It Up 44Chapter 4 Mergers and Acquisitions IT Strategy, Approach, and Governance: IT and Its Customers 47Chris DeBeer and Michael H. MooreStrategy 48Approach 49Governance 50Finance 51Operations 54Human Resources 57Information Technology 60Wrapping It Up 66Part II Information Technology’s Role in Mergers, Acquisitions, and DivestituresChapter 5 IT Due Diligence Leading Practices 69Mark Andrews and David SternbergObjectives and Complexities of IT Due Diligence 70Areas of Investigation 72Proprietary or Product Technology–Driven Due Diligence 76Impact of Transaction Type on the Due Diligence Investigation 77Investigation for Strategic Buyers versus Financial Buyers 78Considerations of Planning IT Due Diligence 79Considerations of Conducting IT Due Diligence 82Considerations of Finalizing IT Due Diligence 86Tying Due Diligence to the Next Steps in the Post-Merger Process 88Wrapping It Up 88Chapter 6 IT Infrastructure Aspects of Mergers, Acquisitions, and Divestitures 91Rick Kupcunas, Mike Trisko, Jeffry Sprengel, and Mushtaque HeeraIT Infrastructure Blueprinting 91IT Infrastructure Planning 93IT Infrastructure Dependencies 100Wrapping It Up 102Chapter 7 M&A IT and Synergies 105Jim Boland, Ronald Goldberg, Colin Hartnett, Sunil Rai, and Stephen RonanIT’s Role and Contribution to Synergy Capture 105Synergy Capture and Benefits Tracking during the Merger, Acquisition, and Divestiture Lifecycle 120Wrapping It Up 135Chapter 8 Supporting Business Objectives with M&A-Aware Enterprise Architecture 137Pavel Krumkachev, Shalva Nolen, Nitin Prabhakar, and Rajat SharmaSources of IT-Related Synergies during M&A 137Post-Merger IT Integration Planning: The Model Makes the Difference 139M&A-Aware Enterprise Architecture Models 139Divestitures and the Enterprise Architecture Frameworks 143Wrapping It Up 144Chapter 9 The Importance of a Tested IT Strategy and Approach for Mergers, Acquisitions, and Divestitures 145Pavel Krumkachev, Shalva Nolen, Nitin Prabhakar, and Rajat SharmaM&A IT Organization and Strategy 145A Tested and Repeatable Approach for IT Integrations 149A Tested and Repeatable Approach for IT Divestitures 152Wrapping It Up 155Chapter 10 Cloud Considerations for M&A IT Architecture 157Mike BrownUnderstanding Cloud Solutions 157Types of Cloud Solutions 158Cloud Solution: Potential Benefits 158Opportunity during Post-M&A Integration 158Cloud Solutions for Post-M&A Plug-and-Play IT Frameworks 159Determining Suitability for Cloud Solutions 160Assessing Cloud Migration Timing 160Establishing a Cloud Strategy 162Evaluating Cloud Providers 163Cloud Solution Success Factors 164Wrapping It Up 165Chapter 11 Data Implications of Mergers and Acquisitions 167Sascha ElsingCriticality of Data Management in M&A Transactions 167Data Governance and Organizational Considerations 167Data Confidentiality, Privacy, Security, and Risk Management 168Data Archiving Requirements 168Data Management Road Map 169Customer Data Considerations 172Wrapping It Up 173Chapter 12 Using M&A to Streamline the Applications Portfolio 175Colin Whiteneck, Joydeep Mukherjee, Ted Veterano, and Venky IyerOverview of an Applications Rationalization Program 178Achieving Cost Synergies through Applications Rationalization 178Achieving Operational Synergies through Applications Rationalization 182Technology and Cost Impact in a Divestiture Event 188Emerging Trends 193Best Practices for Applications Rationalization in an M&A Scenario 194Wrapping It Up 198Chapter 13 Third-Party Contracts in M&A: Identifying and Managing Common Implications 199Christine McKay, Joseph Joy, Ramkumar Jayaraman, and Ninad DeshmukhChallenges Inherent in Different Types of M&A Transactions 200Typical Realities 200Primary Challenges 204Tackling Challenges 206Program Management 215Wrapping It Up 217Case Studies 218Lessons Learned 221Chapter 14 M&A IT Architecture and Infrastructure: Developing and Delivering Transition Services Agreements 225Olivier May and Kevin CharlesPlan Early and Resource Appropriately 227Foster Deal Team and Business Collaboration to Document Appropriately 229Price Services Conservatively 231Establish a Practical Governance Approach 235Plan Exits and Remove Stranded Costs 247Wrapping It Up 250Chapter 15Day 1 Implications for IT Functions 253Sejal Gala and Sandeep DasharathTop Day 1 Priorities for IT 253Wrapping It Up 263Chapter 16 Transition Services Agreement (TSA)—Untangling the Web 265Simon Singh, Nikhil Uppal, and Jennie MillerKey Considerations for Drafting an Effective TSA 267Structuring the TSA 270Managing TSAs 271Governance of TSA Services through a Parallel Structure 273Rationale for Accelerated Exit of a TSA 278Key Considerations for TSA Exit 279Wrapping It Up 281Chapter 17 IT Risk, Security, and Controls in M&A: Identifying and Managing Common Considerations 283David Caruso, Kelly Moynihan, John Clark, Jamie Fox, Joseph Joy, and Scott KaufmanUnderstanding the IT Risk, Security, and Controls Current State 283Practices for Managing IT Risk, Security, and Control Considerations 293Wrapping It Up 301Part III The People Aspects of Mergers, Acquisitions, and DivestituresChapter 18 The Role of the CIO in Mergers, Acquisitions, and Divestitures 305Irwin GovermanThe Double-Duty Role 305The Internal Role 307The External Role 314Some Lessons Learned 317Wrapping It Up 320Chapter 19 The Role of CFO 321Rich Rorem, Trevear Thomas, Nnamdi Lowrie, Heith Rothman, Venkat Swaminathan, Chelsea Gorr, Jenny Xu, and Mia VelasquezStrategist Face 324Catalyst Face 329Operator Face 332Steward Face 338Wrapping It Up 341Chapter 20 Managing the People Side of IT M&A 345Tammie Potvin, Don Miller, Suseela Kadiyala, Michael Proppe, Sarah Hindley, and Laurel VickersKey Priority: Communicating for Impact 346Merger Stages 348Effective M&A Communication 351Key Priority: Defining the Future-State IT Organization 352Steps in M&A Organization Design 353Key Priority: Assessing and Selecting IT Talent 358Key Priority: Managing Change 363Start with Your Leadership Team 363Transition Employees 366Consider Cultural Implications 367Assess Integration Progress 369Wrapping It Up 370Chapter 21 Planning for Business Process Changes Impacting Information Technology 373Blair KinPre-Day 1 Planning 373Day 1 Integration Imperatives 376Long-Term Integration Requirements 380Wrapping It Up 388Part IV M&A IT Project Governance, Testing, and Business IntelligenceChapter 22 Integration Management Office Best Practices 393David Lake and Mauro SchiavonRoles and Responsibilities 393Key Activities 395Sample IMO Templates and Deliverables 398Managing the Deal 398Wrapping It Up 403Chapter 23 IT Program Governance during the Deal 405John UccelloEstablish Governance Model 405Establish the Program Management Office 408Execute the Plan 413Wrapping It Up 415Chapter 24 Important Role of Data in an M&A Transaction 417Lynda Gibson, Anil Tondavadi, and Chris VuCurrent Challenges and Lost Opportunities 418Top 10 Ways to Use Information Management to Improve M&A 419Wrapping It Up 438Chapter 25 Overview of Testing 439Angela MattixTypes of Testing 439Testing Functions and Tools 443Test Preparation Activities 444Timing of Testing 446Wrapping It Up 448Part V ConclusionChapter 26 Why Mergers, Acquisitions, and Divestitures Fail, and Considerations to Help Avoid a Similar Fate 451Nikhil MenonM&A Risks 452Common Pitfalls 453Critical Success Factors 455Wrapping It Up 457Chapter 27 M&A IT Key Success Factors 459Nadia Orawski and Luke BatesKey Success Factors 459Wrapping It Up 461Chapter 28 M&A IT, Summing It All Up 463Habeeb Dihu, Nadia Orawski, Justin Calvin, Luke Bates, Bryce Metro, and Eric NiederhelmanBest Practices 464Best Practices to Be Considered Prior to the Deal 464M&A IT Strategy, Approach, and Governance Best Practices 467M&A IT Security and Privacy Implications Best Practices 472M&A IT and Synergies Best Practices 473M&A IT Contracts Best Practices 473M&A IT Organizational Implications Best Practices 475Best Practices to Consider in Order to Execute the Deal 477Lessons Learned 478Wrapping It Up 479Appendix A M&A IT Playbook Overview 493Joseph Joy, Shalva Nolen, Simon Singh, and Nikhil UppalAppendix B Sample M&A IT Checklists 509Shalva Nolen, Sreekanth Gopinathan, and Devi AradadaAppendix C M&A IT Sample Case Studies 521Manish Laad, Abhishek Mathur, and Prasanna RajappaAbout the Editor 531About the Website 533Index 535