February 22, 2010, 1:49 PM — There's probably no greater indication of a CIO's strategic importance to his company than what happens at the time of a merger or acquisition: Is the CIO a key player during pre-deal negotiations and analysis? Is his expertise sought on whether back-office IT consolidation will be able to produce the desired "synergies"? Does the board ask for his risk analysis on whether key ERP, CRM, BI or supply chain systems will be harmonious or disastrous?
Or is the CIO relegated to afterthought status, as in the CEO wondering: "I guess we should ask Gene if he can actually pull this off?"--after the deal has been consummated.
[ Just how good is Oracle at M&A? Read Oracle's Decade of Acquisition: Innovative or Just Well-Financed? on CIO.com ]
Unfortunately, even in 2010, when businesses know full-well how critical IT is to their success, the latter scenario happens more often than not.
That's according to a new Forrester Research report, A CIO's Guide to Merger and Acquisition Planning.
With a few exceptions, CIOs are still playing the part of Cinderella at the M&A ball, relegated to mop-up duties, writes analyst George Lawrie. And IT's presence typically vanishes like Cinderella's pumpkin.
Strategic M&A expertise has long been a skill set desired by CEOs and most needed by CIOs. And perhaps the Great Recession's credit crunch and paralyzing economic consequences pushed "M&A Capabilities" down the to-do list for many companies.
But as global financial markets continue to improve, companies are likely to see new corporate restructuring initiatives and "distress investing" strategies, notes Lawrie. IT's presence during such significant proceedings seems appropriate and smart.
And yet IT leaders interviewed by Forrester for the report still say that "the deal team, in any corporate restructuring, often omits significant IT involvement until the deal is closed." Lawrie contends that too many businesses "take IT integration lightly."
The Consequences of IT's M&A Absence