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By Nick Heath, 10 January 2008 16:21

NEWS

With global mergers and acquisitions (M&A) predicted to peak at $5tr this year, IT chiefs believe that experience of M&A has never been more important.

The majority of CIOs have been involved in up to three M&As and also believe that IT divisions should be involved in the process from the outset, research by CIO Connect has found.

Two CIOs who respectively played a major role in the £1.75bn sale of the AA to CVC and Permira and the merger of TI Group and Smith Industries agreed that IT input was vital to the deals.

Without it they said companies' risk poor value-for-money, difficulties integrating their systems and not spotting problems with IT systems.

The CIO's role in the M&A process is also changing, with companies charging 46 per cent of them with responsibility for system infrastructure, 77 per cent with due diligence and 81 per cent with negotiating any new business over deadlines and budget levels.

Ric Francis, executive director of operations with the Post Office, was involved in both the Smith Industries merger and Safeway merger with Morrisons.

He said: "CIOs have a lot to offer the process of M&A, I think their contribution is right up there to make integration as effective as possible - the value release so often will come through technology.

"In the first deal [Smith Industries] I was very involved. I was less involved in the Safeway deal and think it was less successful as a result, I do not think they made the best decision for what was needed to realise the technology value and value of integrated organisations."

He added: "I think the experience is part of the broad skillset that is needed by a CIO today."

The scale of IT costs in a merger was estimated at less than 20 per cent by 42 per cent of CIOs - but 54 per cent of CIOs believed IT was responsible for at least 20 per cent of the benefits resulting from the acquisition.

Trevor Didcock, former CIO of the AA, said his input played a key role in getting value for money for Centrica - AA's owners at the time - and ensuring the smooth transfer to Permira's systems.