IT Departments Aren't Enough; Develop an IT Business Strategy
As the Innovation Age progresses, technology continues to move to the forefront of many business strategies. Technological advances have...
2 min read
When two companies are attempting to finalize a merger, it’s normal to focus on the balance sheets to make sure that finances work out well. However, there are also important logistical decisions that must be considered. One of the major oversights that could arise during the merger has to do with technologies and software.
Visibility Into Potential Future Technology Issues Is Key
IT networks provide the essential circulatory systems of most businesses, so insight into any potential problems is critical to avoiding a hefty price tag after the merger or acquisition is complete. If two companies are going to become one, they need to have clear visibility into their future partner’s current state of technology; it’s in the buyer’s best interest to have the due diligence to investigate and understand the current state of all technologies before acquiring another entity.
Outdated technologies could be costing you more than you think [FIND OUT MORE]
Modern businesses typically take technology for granted, and expect it to work automatically and without issue. With this casual mindset, it can be easy for companies who are wading through the major complexities of a merger or acquisition to put IT on the backburner and focus on other priorities. However, for most mid-to-large size businesses, IT provides the foundation for all types of operations, so any type of breakdown could be detrimental to everyday processes.
IT Systems Should Be Compatible With Each Other
A lack of proper understanding of a company’s future IT assets can also lead to major technology incompatibilities. An essential step in combining two companies is to ensure that both companies have compatible software systems. If the software systems cannot speak to each other, it will be difficult to combine forces, merge data sets, and get all employees on the same page. Therefore, companies need to make sure that they both have software systems that can speak to each other. For best results, tech specialists from both sides should work together to examine the company's’ existing systems, and determine whether one or the other needs to make dramatic changes.
These tech specialists will typically ask a variety of specific questions in order to get a full vantage point into the inner workings of both businesses involved in the merger or acquisition. A few examples are:
- What applications are used to manage the company’s business operations?
- How will the combined organizations integrate the two information systems?
- Who has responsibility for control and maintenance over the target’s IT systems?
- Does the company have an adequate disaster recovery plan?
- What training resources are available to help employees transition to new systems and programs?
[Question] How old is your company's technology?
In order to accurately benchmark you and your partner's IT strategy prior to a company acquisition or merger, a professional advisor can help to provide objective advice before and after the close. A trusted advisor will immediately report issues, concerns and opportunities that may affect the transaction, so your company can rest assured that it has full visibility into its future partner’s IT assets prior to the deal being finalized.