Why M&A Requires More Project Management Expertise than Your Run-of-the-Mill IT Projects

Why M&A Requires More Project Management Expertise than Your Run-of-the-Mill IT Projects

No matter their size or scope, M&A transactions—mergers, acquisitions, carve-outs, and other divestitures—present unique challenges for the IT departments involved. These teams are changed with more than just implementing a new CRM or upgrading the billing system (which aren’t trivial in themselves). Instead, they must carefully combine all the systems and data (and for most mergers, the teams and employees and cultures) of two distinctive brands. Or in the case of divestitures, they must extract and separate systems, data, and people that have become highly intertwined over years of operation. Even if the business focus of all entities involved is similar, it’s a massive undertaking.

Indeed, the complexities of M&A place a far greater demand on IT project management than most are accustomed to. It’s not simply a matter of merging systems and philosophies. It’s melding together or breaking apart disparate business approaches. Maintaining continuity and productivity in the face of upheaval. Training or retraining whole teams while keeping the now larger merged (or separated) entities moving forward.

Let’s explore three ways M&A-relate IT projects require more expertise from IT project management than your typical IT initiatives.

Enabling The IMO To Do Its Job

The IT portion of an M&A transaction is a critical project, but it’s only part of the much larger program. A key responsibility of the program management office (PMO)—or in the case of mergers and carve-outs an integration management office (IMO)—is the establishment and oversight of project frameworks and processes across all project workstreams and business functions. Some of the more critical steps include:

  • Developing a comprehensive approach to coordinating the myriad projects and subprojects involved in the merger.
  • Defining the roles and responsibilities for each stakeholder in the merger or divestiture, including accountabilities, chains of command, and delegation of tasks.
  • Gaining proper buy-in from respective stakeholders to keep each group engaged across the full scope of the acquisition.
  • And many, many others.

IT project management that is knowledgeable and experienced in M&A activities can help ease the burden on the PMO/IMO when it comes to overseeing the technology aspects of the program. Their understanding of the unique challenges of guiding M&A programs, not to mention complexities and risks involved in wholesale infrastructure changes, allow them to assist the IMO with the IT change management process.

IT project management that understands the intricacies M&As create

Of course, the PMO provides more than oversight for M&A-related activities. It also secures and works with the project management teams that schedule, track, and ensure completion of the program as a whole and each project without the program.

This is especially critical for IT-related projects, as these systems and processes touch practically every aspect of an M&A transaction. These projects cover the integrations of the target entity’s systems and platforms (or addressing the lack thereof), including accounting, customer service, and retention, HR, IT, marketing and sales, and operations.

For project managers, pre-merger tasks may include:

  • Strategy sessions on the technical viability of potential acquisition targets
  • Conducting IT due diligence for the proposed acquisition
  • Gauge risk and examine the needs and requirements of onboarding a diverse set of systems, merging them, or replacing them
  • Integration planning
  • Develop reasonable Transitional Service Agreements (TSA’s)
  • Engaging external resources to provide the necessary systems and migration expertise

Post-merger, the focus shifts to the IT integration project itself which requires project management to:

  • Establish new or recalibrated processes and procedures
  • Maintain budgets and track spending and resource allocation
  • Plan and execute data migration and conversions
  • Recreate out-of-perimeter networks and services
  • Monitor progress, calculate performance, and hold respective parties accountable
  • Communicate, communicate, communicate—ensuring all stakeholders are aware of progress as well as any roadblocks encountered

Project management needn’t always be intimately knowledgeable of the core business of the entities involved in the M&A activity (though it certainly doesn’t hurt). What is essential, however, is their grasp of the intricacies of merging or dividing IT systems and infrastructure on such a wholesale scale.

M&A-related IT projects require skills/experience many project managers lack

Though your IT project management team may prove perfectly capable in their day-to-day endeavors, coordinating a complex M&A-related IT project is a different beast entirely. The expanse of issues to navigate that mandate having the aptitude for accountability, communication, and problem-solving that goes beyond your ordinary, run-of-the-mill IT project.

Remember, you’re not simply bringing a new service platform online or decommissioning an old one. You’re onboarding (or creating) a whole other entity, one that brings to the table its own IT schemes, strategies, and protocols, not to mention its own mindset about doing business and how IT serves that function.

Project management must not only be sensitive to a broader array of concerns and monitor, track, and communicate for sweeping initiatives like these, it must have the experience in what makes M&A-related IT projects unique. Often, the entities involved in the M&A activity lack that unique combination of capabilities. Even if yours is a private equity firm that regularly engages in M&As, your seasoned IT team may lack the level of project management necessary to ensure a successful merger or divestiture of your IT infrastructures.

Collaboration with a trusted IT consulting partner whose experience and expertise focus squarely on PEs and M&A activities does more than instill confidence you can navigate the M&A process. It frees up your internal ranks to concentrate on more individualized tasks, areas where they can apply their specializations that better serve your M&A efforts and beyond.

Scroll to Top