IT chiefs urged to prepare for renewed M&A activity

IT's role is crucial in a merger or acquisition

Gartner has warned that the end of the recession will spur new mergers and acquisitions (M&A) activity, and that chief information officers should brush up on their integration skills.

Reaping the benefits of a merger or acquisition is a "notoriously tricky business", according to the analyst firm, and requires an effective IT team to ensure success.

"There is no established governance body spanning the whole organisation, there are normally aggressive goals and time frames, and there are often many surprises along the way as each side learns about the other," said Dave Aron, a vice president at Gartner.

"On top of all this, the business must continue to serve clients, run operations and execute in the face of major, often disruptive, integration activity, making IT's role critical."

IT should be placed firmly at the heart of M&A plans, according to Aron, with an involvement that begins at the due diligence planning stage and culminates at the "reap the benefits" phase.

Other parts of the process include "signalling", during which the effects of the merger should be visible, such as unified email addresses and security badges, and the "commercial" stage during which the benefits are discussed.

Mary Mesaglio, a research director at Gartner, suggested that these stages will differ in methods and timings and vary from company to company.

"A good rule of thumb is that roughly 25 per cent of a typical M&A integration effort will come from IT. But the time and effort that each phase requires from IT varies significantly," she said.

"For example, a large amount of IT resources is typically needed for a relatively short time in the initial/commercial phase, whereas a smaller, but still substantial, IT effort is needed over a longer period in the main integration and reap the benefits phases."