Keys to the Kingdom: How an Integrated IT Capability Can Increase Your Odds of M&A Success

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An exclusive Accenture research initiative demonstrates that effective IT integration has a clear and positive impact on the financial success of a merger or acquisition. Read the official News Release

Our experience with hundreds of leading companies over the past decade has repeatedly shown that integration and stabilization of the Information Technology (IT) capability is a critical activity during a merger or acquisition.

Through interviews and analysis of approximately 60 post M&A integration projects in North America and Europe, we have identified what we hold to be the “keys to the kingdom”—a set of practical and achievable imperatives that can lead to faster and more effective integration of the IT capability, stabilizing its services and leading to faster support for the business.

Of those deals that were more successful financially, 71 percent said that they were driven by a vision of the future IT capability toward which they were moving (compared to 35 percent who did not score as high in terms of financial success).

The vision of future IT capability enabled achievement of IT stability more quickly which, in turn, led to greater financial value of the merger.

Companies that involved IT in the pre-deal deliberations for the M&A scored higher on our financial rating scales, and were more likely to describe the overall merger integration as a success. When IT leadership is involved earlier in the business planning, they can help develop a technology approach that supports the new business.

Companies that performed an IT due diligence realized greater financial value from the M&A and also reported a more successful integration experience. Through a due diligence, companies can identify potential capacity constraints, low service levels or undocumented technologies.

In general, the most important finding from the Accenture IT Integration research initiative is clear proof that successful IT integration activities are a strong contributor to overall merger success.

We found that those companies with more effective integration in such areas as IT Planning and Management, IT Operations and Application Delivery were more likely to achieve better financial results from the merger, and were also more likely to describe the merger as a success. But what specific activities during IT integration increase the odds of stabilizing the IT capability quickly, enabling a more successful merger?

The Accenture IT Integration Research Study, combined with our extensive experience with clients, points to several practical imperatives by which organizations can more effectively plan and manage IT integration, which then leads to greater business value from the merger or acquisition.

• Drive the IT integration program based on a vision of future IT capability.
• Involve IT early in business discussions about the deal.
• Perform an IT due diligence before the deal is signed.
• Engage in detailed IT integration planning.
• Appoint a dedicated IT integration team and manager to oversee the IT integration.
• Use experienced staff to manage the IT Integration.
• Use external staff to help execute the IT integration activities.
• Engage in IT cultural change and human performance-related programs.