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Story URL: http://www.silicon.com/research/specialreports/network/0,3800013777,39163534,00.htm

CIOs must not fear M&A deals
Seize the opportunity and get involved early on, says Gartner

By Andy McCue

Published: Wednesday 25 October 2006

CIOs can play a vital role in the success of mergers and acquisitions (M&As) by getting involved early and helping reduce risk and support clearer decision-making, according to Gartner.

The research claims CIOs are ideally placed to understand and influence their organisation's merger, acquisition and divestment strategies but warns they must take a positive and decisive approach - not one of trepidation.

Dave Aron, VP and research director at Gartner, said CIOs must get the IT infrastructure and asset base ready before any specific deal is on the table.

He told silicon.com: "CIOs inexperienced in this area wait until the deal is done to get a plan. Experienced CIOs start as soon as they hear about the deal."

M&As should also be viewed as an opportunity to enhance staff and assets, and not just a "scary, onerous burden", while risk management and legal expertise are two more areas that the CIO is in a good position to contribute to the due diligence team, Aron added.

He said: "M&As are typically huge complex projects and it is not business as usual. You need very good risk management."

Garter also said CIOs put themselves in a better position to take on the CIO role of the new organisation by engaging with their counterpart from the acquired company early on, instead of being protective of their domain.

Aron said: "The classic view is that knowledge is power but the willingness to be open and communicate is actually power."

He said the CIO of the target organisation can also take precautions to make sure they are well prepared for an acquisition.

He said: "We advise CIOs in this situation to have their processes, human resources and assets well documented, and to take an honest view of their position. In the early days we would recommend trying to learn as much as possible about your suitor and developing a plan accordingly that will keep staff motivated and onside."

Nakis Papadopoulos, joint-CEO at business intelligence specialist IMGroup, told silicon.com that CIOs have the tools at their disposal to provide the information the business needs for M&A deals.

Papadopoulos said: "The first things to look at are the opportunities for improvements, optimisation and cost savings. There is lots of data to analyse there, so the CIO has the opportunity there to help the executives make decisions quickly and decisively."