The technological implications of major business transactions
Mergers, acquisitions, and spin-offs
While business strategy takes the lead when determining which activities to undertake and when, the importance of strategy doesn’t diminish once the last contracts are signed. Mergers, acquisitions, and spinoffs require organizations to separate and/or integrate all operational activities, including:
- legal operations
- business procedures
- core business processes
- organization-related activities
This places the emphasis on change management, which in today’s landscape is led by IT strategy. Effectively managing the transaction across the key areas of processes, technology, and people within the specified TSA (transitional service agreement) period is crucial to achieving the anticipated return on investment in any merger, acquisition, or spin-off.
The exact type of change management required depends on the type of activity undertaken by the business.
Mergers & Acquisitions
Mergers and acquisitions involve the integration or re-integration of a separate subsidiary into the parent organization. This is often done to mitigate anticipated risks to the subsidiary or to capitalize on expected benefits of integrated operations.
Depending on the nature of the business combination, mergers and acquisitions can require both carve-in and carve-out operations. A carve-in process generically refers to the process of integrating multiple business entities into one single entity. In more technical terms, this involves integrating or consolidating multiple tenants into one tenant.
Business Drivers and Technological Considerations
In today's landscape, business decisions and information technology are more closely connected than ever. Regardless of which considerations are placed first (business or IT), any decision made in either category has significant impacts on the other. Therefore although mergers, acquisitions, and spinoffs are undeniably strategic business decisions, they trigger major IT activities such as carve-in and carve-outs.
Continue reading to learn about the key decisions to be made and the most important considerations to weigh when preparing for a carve-in/carve-out.