IT Case: What happens with the IT when an PMI / company spit occurs?

Hi,

There are several sets of questions you have to answer:

1) What are the real reasons for the deal (Make sure you cover it in clarifying questions). Criteria for success

2) How do we choose a system?

• Will it be one system or two systems?
• Is it "Adopt and go" approach or we take the best of both systems and create a new one?
• Integrate now, innovate later? Or Innovate now, when you have time?

3) Early wins and potential integration risks

4) What is the integration plan across different entities? Take into account that It may take years

Regarding your second question - it depends on whom you are selling to. If it's a merger they will have a similar set of questions. Otherwise, you have to split or switch the system. 

Best!

Hey anonymous,

This is a very interesting question related with real life projects and companies (not so many cases about this topic though). In real life, the IT convergence in the post-merger phase is one of the biggest nightmares for the management team, as often the companies have different softwares and most of them are super legacy that are very difficult to addapt.

There are some two major ways of approaching it: new overall system (probably the most costly but efficient solution) or trying to integrate the several bits and pieces which is what most of the companies do because it's cheaper (at least in the short-run).

I would say it's much easier in case of a company split, as they can just chose which systems anda data to stay with

Btw, in real life this can correspond to a 1-2 years implementation project

Best

Bruno

Wanted to add that in the event of a split/spin-off the criticality is that TSA (transaction services agreements) will need to be set up for the first few months as the set up of new systems and augmentation of IT team (since IT team will be either split or will remain at one of two companies), as stated, doesn’t happen overnight. Moreover it is important to start negotiating with current or new vendors the new contracts as the costs per users/unit of measure will go up significantly as the size of the split companies will be much smaller than original one and thus will not be able to command similar rates.