Whenever an acquisition or a merger happens, a number of challenges can emerge in the workplace. The employees begin to worry about the new business structure and whether they will retain their jobs. The executives in upper management are also worried about ensuring that the merger proceeds in an appropriate way. This is so that they can maintain smooth business operations and the interests of shareholders or regulators. Studies have shown that in 60% of all mergers and acquisitions that occur in business, the Information Technology (IT) department is not seriously considered in the process. This department is not consulted during the initial processes of forward-planning or due diligence. In light of this unfortunate statistic, groundwork and proper management in the IT department are required so as to create a changeover that is smooth and successful. Here are the elements in IT that need attention so as to ensure a successful transition.
Contracts
Whenever this dramatic business event is occurring, the IT department should collect all the contracts that they have with service providers or vendors. This is so as to analyze and determine termination clauses, transferability and future assignments. This initiative maintains a good relationship with vendors. It also limits the exposure of these stakeholders to the effects of the business transition. Furthermore, a deep comprehension of the commitments that have been made by the company to entities operating externally should be made. This activity promotes communications that are transparent throughout the process.
Legal matters
The IT landscape is governed by specific laws and regulations. These should also receive attention during the business transition. The IT and legal departments of all companies should have meetings to chart a path forward in regard to maintaining compliance. The results of these meetings can be a Transition Service Agreement (TSA), specific milestones or deadlines.
Agreements and carrier contracts
Both featuring prominently in IT departments today, carrier contracts as well as agreements should be assessed. According to CCCIT, this should be done so as to examine if they can be transferred after the corporate transition is over. If it is possible, business continuity is ensured. Otherwise, brand new circuits need to be ordered and other contracts signed.
Website domains
A merger or acquisition normally involves 2 or more companies. Each of these has its own unique website domain that they use so as to communicate with the world. An acquisition or a merger can cause confusion about which one to use. Therefore, the IT departments of all the participating companies should develop a plan to create a new website that represents their products, services or interests. They can also decide to pick one domain and do away with all others. This will ensure a cohesive brand message on the Internet.
Communication through messages
The cooperative workforce of today lays tremendous importance on messaging. The relay of information from one party to the next can improve productivity in the workplace by 20% to 25%. Messaging can be conducted in-house or located in Cloud infrastructure. Therefore, each company involved in the business transition should be queried about the type that they use. Doing so will help in the creation of an all-inclusive integration plan. This is to ensure the smooth transfer of this crucial business element.
Licensing of software
The licensing process of software is also an important part of due diligence in the IT department prior to a merger or acquisition. The transfer of these licenses can be a tricky situation. That’s because there is no standard procedure to follow in this regard.
Every business transition is unique. It may require the carve-out of a big firm or involve two separate firms. Ownership of licenses is important because of compliance issues. Improper handling can result in large penalties. Therefore, the licensing of software is an important element to consider during acquisitions or mergers.
Toolkits
There are specific tools which are used in the Information Technology (IT) department for the purpose of communication. They include mail forwarding, archiving of emails, Audio-Video systems and VOIP telephony. These tools should be identified and documented. This is so as to help in handling the overall workflow and productivity of employees after the business transition has occurred.
Managing the IT infrastructure
Just like any other sector of an organization, the Information. Technology (IT) department relies on a collection of infrastructure. Following a merger or acquisition, it can be integrated or outsourced. This decision should be guided by finances and practicality. It should also be made prior to the business transition.
Conclusion
A merger or acquisition is a momentous event in the lifetimes of the businesses involved. Therefore, the IT departments of all firms that are participating in this activity should get together and address every Rem in this checklist. Doing so results in a good plan and the implementation of due diligence. This prevents the emergence of disruption in business or confusion.