IT: make or break the deal
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The document discusses the influence of digital strategy and architecture on mergers and acquisitions, emphasizing the importance of IT synergies and complexity management post-merger. Key takeaways include the need for careful planning of IT integration, prioritization of system groups with minimal interfacing, and the potential benefits of maximizing automation. Additionally, it highlights the significance of thorough due diligence to avoid costly integration issues.
IT: make or break the deal
- 1. Michel de Goede Digital Strategy & Architecture IT: Make or break the deal
- 2. digital strategy & architecture 1. Alliander: pleased to meet you 2
- 3. digital strategy & architecture 2. Alliander M&A: First Transaction 3 1898
- 4. digital strategy & architecture 2. Alliander M&A: Number of major transactions 4 And counting….
- 5. digital strategy & architecture 2. Alliander M&A: Deal trend 5
- 6. digital strategy & architecture 2. Alliander M&A: Today 6
- 7. digital strategy & architecture 3. IT in M&A: underserved 7Source: EY
- 8. digital strategy & architecture 3. IT in M&A: high synergy relation 8Source: McKinsey
- 9. digital strategy & architecture 3. IT in M&A: high spend 9Source:Roehl-Anderson, Janice M, M&A Information Technology Best Practices, Wiley (2013)
- 10. digital strategy & architecture 3. IT in M&A: unsurprising impact 10
- 11. digital strategy & architecture 4. Post-Merger IT: goals 11Source: Theron Advisory Group
- 12. digital strategy & architecture 4. Post-Merger IT: prioritization 12Source: Booz & Company
- 13. digital strategy & architecture 4. Post-Merger IT: the move 13 1. As-Is 2. Lift & Shift 3. Virtual Migration 4. Backup & Restore 5. New?
- 14. digital strategy & architecture 4. Post-Merger IT: FMO 14
- 15. digital strategy & architecture 5. IT product choice: life-cycle 15Source: Simon Wardley
- 16. digital strategy & architecture 5. IT product choice: consequences 16Source: Simon Wardley
- 17. digital strategy & architecture 5. IT product choice: targets 17Source: Simon Wardley
- 18. digital strategy & architecture 6. Complexity: definition 18 ‘The complexity of a system is a function of the number of states in which that system can find itself’. Source: Roger Sessions, Object Watch
- 19. digital strategy & architecture 6. Complexity: size 19Source: Roger Sessions, Object Watch ‘Glass’ Law states that for every 25% increase of complexity in the problem space, there is a 100% increase of complexity in the solution space’. Meaning: to the power of 3.1!!!!
- 20. digital strategy & architecture 6. Complexity: how it works 20Source: Roger Sessions, Object Watch
- 21. digital strategy & architecture 6. Complexity: where it works 21Source: Bain & Company
- 22. digital strategy & architecture 6. Complexity: includes data 22
- 23. digital strategy & architecture 6. Complexity: and process steps 23
- 24. digital strategy & architecture 6. Complexity: and organization 24Source: Dion Hinchcliffe, Adjuvi
- 25. digital strategy & architecture 7. Post Merger IT Synergies: realization 25 Are we solving the right problem?
- 26. digital strategy & architecture 7. Post Merger IT Synergies: legacy 26
- 27. digital strategy & architecture 7. Post Merger IT Synergies: FMO exploration 27Source: Amin Nasr
- 28. digital strategy & architecture 7. Post Merger IT Synergies: FMO calculation 28 1. Startup costs 2. Operational costs 3. Retirement costs
- 29. digital strategy & architecture 7. Post Merger IT Synergies: FMO gains identification 29Source: McKinsey
- 30. digital strategy & architecture 7. Post Merger IT Synergies: FMO gains identification 30Source: McKinsey
- 31. digital strategy & architecture 7. Post Merger IT Synergies: optimization 31
- 32. digital strategy & architecture 7. Post Merger IT Synergies: residual risk 32 Risk strategies: • Ignore, the ostrich ‘see-no-evil-hear-no-evil’ tactic; • Accept, the potential impact of some risks may be deemed acceptable to your organization; • Reduce, e.g. the potential impact or probability of occurrence of a risk, like the banking app; • Transfer, use insurance or subcontracting to transfer potential consequences of risk; • Avoid , not entering the type of business that may incur potential risk impact deemed too high; • Exploit, risk is also an opportunity and high risk investments may yield high returns.
- 33. digital strategy & architecture 7. Post Merger IT Synergies: optimize better 33 1. Calculate future cash-flows 2. Calculate volatility 3. Calculate option value Source: Ronald Poppe, Reader Financial Engineering, Rotterdam School of Management / Erasmus University
- 34. digital strategy & architecture 7. Post Merger IT Synergies: check 34 Did we consider all relevant solutions?
- 35. digital strategy & architecture 8. Example 1: ERP Consolidation 35
- 36. digital strategy & architecture 8. Example 1: ERP Consolidation 36Source: Marcel van Driel, Eduard Lagendijk, Alliander
- 37. digital strategy & architecture 8. Example 1: ERP Consolidation 37Source: Marcel van Driel, Eduard Lagendijk, Alliander
- 38. digital strategy & architecture 8. Example 2: GIS 38
- 39. digital strategy & architecture 8. Example 2: GIS 39
- 40. digital strategy & architecture 8. Example 2: GIS 40
- 41. digital strategy & architecture 8. Example 3: Endinet 41 Buy Lift & Shift Modernize Sell
- 42. digital strategy & architecture 3. Takeaways 42 - Do never underestimate the complexity of IT PMI - Better spend a bit more on IT DD / FMO exploration then losing big on integration - Today, IT PMI synergy goals cannot hardly be too ambitious - Focus on groups of related systems having minimal outside interfacing - Fewer storage, fewer processing steps, fewer intermediate stock, fewer half products, fewer variations - Maximum automation and commoditization of IT and IT jobs - Plan (the cost of) any IT component with its retirement in mind - Always, ALWAYS, check your hypotheses
- 43. digital strategy & architecture Thank you! 43