The business world is becoming more and more digital and management cannot make critical decisions without the data from systems. However, each company uses its own systems, and in many cases they are tailor-made for them, which tends to create complicity in the M&A field (at least I have suffered from this complicity in the past deals). IT DD is becoming important, but the system is very complicated, so it is not until the merger is done when acquirers can really see how the system is structured in very detail. As I said, management needs the data from the system, so how quickly acquirers can achieve IT integration is the key to successful PMI.
I agree with your line of reasoning. The question is how to do a reliable IT DD and what the impact is on the expected Integration costs. Are there any best practices to consider related to this topic?
I can assume that two complete different, custom IT systems take a lot of integration effort, jeopardising the synergie potential of the deal.
Also agree with your reasoning. Also comprehensive planning is crucial: It is imperative to thoroughly assess the IT systems, infrastructure, and processes of both merging entities during the pre-merger stage. This evaluation helps identify potential integration challenges, compatibility issues, and areas requiring immediate attention. Developing a detailed integration plan with clear objectives, timelines, and resource allocation is vital to minimize disruptions and ensure a smooth transition.
A best practice could be to conduct a comprehensive IT due diligence and to establish a dedicated integration team.