When the dust settles

Mergers and acquisitions can be a source of worry to employees while they are happening, but the IT department has additional worries. ACN talks to CIOs about how they handle the integration of two often very different IT systems when the talks are over and the merger begins.

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By  Brid-Aine Conway Published  January 26, 2008

Mergers and acquisitions (M&A) is a topic of heated debate amongst the world's media, economists and thinkers. But whether they are on side or not, the fact is that consolidation and expansion are now global forces and M&As are a large part of that movement.

While controversy surrounds private equity fund ownership, the possibility of global monopolies and the future of local employment during M&A talks, once the agreement has been signed and the dust has settled around which offices/factories will stay open, there is a lot less interest in the way the companies will actually function as one.

Post-merger, the first step is staff communication because the moment they become aware of the merger, they want some communication.

M&As can be a source of worry to employees in terms of their job security and position, but the IT departments have that and also a much bigger headache. They're the ones who are instrumental in the integration of the companies by merging two IT systems which could well be completely different.

It is simply not logical to try to run two separate IT systems side by side, according to Stephen Savage, CIO of CA, a company which has been very active in M&As.

"The idea is that in order to grow, an organisation needs a scalable infrastructure and if you're going to maintain separate systems for each acquisition you actually limit your ability to scale. The idea, at the end of the day, is to have some commonality. A common transaction should run across the organisation that you integrate the acquisition into, giving you the ability to scale as an organisation," he says.

A large of the integration of two companies lies in a common IT system, which necessitates a lot of planning for both IT teams.

Gary Moscardini, EMEA IS/IT manager at Mitel has been busy dealing with its recent acquisition of Intertel, a provider of business communications solution. During the planning stages, Mitel took into account the IT systems of both companies and compared them.

"You have to start reviewing the IT functions and applications that are in use. So what we did is a very typical methodical IT approach, where you get a list of all the IT functions and applications and pretty much run through three key areas. The first would be assessing the strengths and weaknesses of each of those applications in both companies," he explains.

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