Mergers and acquisitions have always been, and will always be, a powerful tool for companies to get lighter—to generate more revenue at less proportional cost. It is no surprise then that acquiring companies increasingly are scrutinizing the potential synergies, before and after the acquisition. Those include business processes that are IT intensive and which can be combined (such as online marketing), data centers and IT infrastructure, and the professionals to keep the processes and systems going.

1. Training for the M&A Marathon
Copyright © 2017 Tata Consultancy Services LimitedMay 2017
Dave Jordan
Vice President of Business Consulting,
Consulting and Enterprise Solutions
PERSPECTIVES VOLUME 8

2. M&A: Behind the Scenes
M&A helps companies
generate more revenue
at lower costs
Such strategies help
leverage synergies
between two or more firms
Securing those synergies by
quickly integrating the firms
is a challenge

3. The Price of Being Unprepared
An M&A is like a marathon: you need to prepare extensively well in advance. Not
planning ahead can cause three major problems:
Synergies will take
longer to generate
Superior business processes
and systems that provide a
competitive advantage
might be discarded in favor
of inferior systems
Valuable IT people
might be lost to the
competition

4. Unlocking the Synergies
IT is often ignored during due diligence, even
though IT infrastructure and applications power
critical business activities
Integrating the IT infrastructure is the biggest
challenge after an M&A
To unlock the synergies, companies need to first
focus on quickly integrating the IT-intensive
business processes and functions

5. Become an M&A Powerhouse
1. Build an M&A CoE
2. Measure synergies
5. Narrow the integration focus
4. Standardize systems and
business processes
3. Know the infrastructure
6. Embrace M&A

6. 1. Build an M&A Center of Excellence
Build a CoE to increase the chances of
success, especially when mergers become
routine and involve IT-related processes
CoEs should employ core staff and
build skills critical to the function
they support
The team should learn from every
deal and refine best practices

7. 2. Create Metrics for Synergies
Time is a great killer of
potential synergies,
especially in merging IT-
related operations
Organizations need to
move fast to gain from
and retain benefits from
integration
Set up an aggressive
timetable to ensure
integration efforts are
swift and effective

8. 3. Know Your Infrastructure
Starting to look for this information
during the integration process can add
months to the integration timetable
Organizations need an in-depth understanding
of their infrastructure to ensure their best
processes are not lost in M&A
Document the different components of the
infrastructure to save up to 40% of the
time taken to integrate after an M&A deal
i

9. 4. Standardize Enterprise Systems
M&A deals bring
together different kinds
of customized software
Integrating such
systems is time
consuming and difficult
Adhere to a policy of
standardized enterprise
systems to make IT
integration easier

10. 5. Narrow Your Integration Focus
Only a few processes truly matter to a company’s marketplace
performance
In most companies, 70% to 80% of their processes and systems are
commodities—infrastructure that does not distinguish the company
Identify processes and systems that are in the core 20% to 30%,
then spend 70% to 80% of your time deciding how to integrate them

11. 6. Embrace Continuous Improvement
For companies in mature and fast-
consolidating markets, M&A is
unavoidable
Mindsets must change—M&A is a necessity
to keep companies competitive
Organizations need to have a positive
outlook and constantly upgrade their
knowledge about IT

12. Companies with M&A as a
key growth strategy need
to prepare rigorously for
the day when they buy
another company
They need to hone their
integration skills and
learn to capture
synergies quickly
Companies that rise up
to this challenge will
have a powerful
advantage in a world
driven by scale and cost
advantages
Winning the M&A Race

13. Copyright © 2017 Tata Consultancy Services Limited
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