Merger and Acquisition experience becoming ever more essential for today’s senior CIO Thursday 10 January 2008 PDF Print January 10th 2008 - International mergers and acquisitions (M&A) are becoming an increasingly important area of expertise for today’s senior CIOs, research from CIO Connect has reported. In a survey of its membership, 54% of CIO respondents had been involved in up to three M&A transactions with 42% reporting involvement in four or more during their career. And as M&A activity continues to rise across the globe, topping $4 trillion worldwide last year and predicted to peak at around $5 trillion in 2008 (source: Ernst & Young), the role of the CIO in the M&A trend looks set to grow. The majority of CIOs surveyed (58%) said that they should be involved in any merger plan right from the outset, and 46% reported that their organisations already gave them this responsibility in the area of systems infrastructure. And as mergers got underway 77% took responsibility for carrying out due diligence of the target company, with 81% of CIOs reporting it was also their responsibility to negotiate with any new business over deadlines and budget levels. When it came to the impact of IT on M&A, CIOs believe they are delivering for the business. Almost half of CIOs (42%) reported IT merger costs accounted for less than 20% of the total M&A integration costs and 54% believed that IT was responsible for delivering at least 20% or more of any post acquisition benefits. But the business IT specialists were critical of post acquisition and merger measurements. Although 92% of CIOs said their organisations undertook some form of review to measure the performance and success of M&A IT projects, one in five (19%) reported there were no accurate measurements of IT integration costs or post acquisition benefits across the organisation. Finally, the global nature of M&A became clear with 25% of respondents having been involved in projects in the emerging BRIC economies of Brazil, Russia, India and China, some 19% in Eastern Europe and 12% in other countries. “These findings demonstrate that the CIO involved in M&A needs to be an effective business leader, strategist, communicator and influencer, with appropriate levels of cultural sensibility and effective people management skills,” said Nick Kirkland, managing director of CIO Connect. “Indeed, those surveyed believed these business and people skills were considerably more important for the CIO than technical or operational management skills, which most respondents felt could be delegated to members of their team.” ”What was of concern however was the lack of accurate measurement of IT integration costs and post acquisition benefits. Without proper measurements, it is very difficult to improve efficiencies or processes for future M&A activity, or even to judge the merits of such activity. If organisations are not prepared or able to carry out such assessments, the CIO must use their influence to press upon senior management the need for this assessment.” CIO Connect published a number of recommendations for CIO consideration as a result of the research: • Get involved as early as possible. • Understand the business model, because other functions will make assumptions about what can be integrated that may be incorrect. • If you are in an industry where M&A is ever present, be ever ready. • Become ever faster at integrating businesses - maintain an up-to-date playbook. • Consider having a permanent M&A team. • Make the decision to integrate fast – don’t debate it for 3-6 months. • Tell people what’s happening as soon as you can. • Make speedy decisions. • Understand forward investment plans so you don’t waste time and money. • Be pragmatic. • Utilise suppliers’ M&A teams where you can. • Understand the business drivers for the M&A and work in the appropriate way. Ends Notes to Editors The survey was carried out in December 2007 and drew responses from 26 senior CIOs, approximately 10% of the CIO Connect membership. About CIO Connect CIO Connect is the independent networking forum for top CIOs and their direct reports. CIO Connect helps CIOs and their teams to make a greater contribution to their business through the exchange of experiences with their peers in a trusted environment. With more than 250 members, including most of the FTSE 250 companies and high-profile public-sector organisations, CIO Connect runs a comprehensive programme of events including conferences, roundtables and special interest groups. CIO Connect also offers a unique online information service, a quarterly magazine, and conducts regular research on topics of relevance to CIOs. CIO Connect supports CIOs to become an informed business and operational leader. CIO Connect is a service from the National Computing Centre, the UK’s leading independent IT membership organisation, serving corporate, vendor and government communities. For further information on CIO Connect, please visit www.cio-connect.com For further information on the National Computing Centre, please visit www.ncc.co.uk For further information contact: Paul Smith Paul@ps-pr.co.uk Tel: +44 (0)7770 828525 This press release was distributed by ResponseSource Press Release Wire on behalf of The Amber Group in the following categories: Computing & Telecoms, for more information visit http://pressreleasewire.responsesource.com/about.