Published on AXIAL Forum, January 2016, by John Beauford. He has broad experience in large scale software development and IT for Fortune 100 companies as well as startups. In his spare time, he blogs about technology and business at johnbeauford.com and researches business deals looking for that diamond in the rough. John has a Bachelors degree in Electrical Engineering from Oklahoma State University.
Traditional M&A deal teams run the risk of missing substantive issues that could impact deal structure, terms, and integration success.
Where does this risk come from?
Often the answer is simple: a lack of informational technology (IT) visibility.
Most M&A deal teams comprise accountants, lawyers, M&A professionals, and executives. These are the small teams that engage and form the deal framework with a target firm.
This small team approach can work well and move quickly. But business today is increasingly IT dependent, and these teams may overlook crucial items that could make or break a deal.
How can M&A deal teams mitigate this risk? Involve IT professionals as part of the deal team to help assess a broad overview of the IT landscape of the target firm and identify any substantive issues that may exist early in the deal making process.
This may seem crazy to some. Traditionally, IT is viewed a functional unit of a business — far down the food chain when it comes to M&A deal making. Information technology is not considered at the beginning of the process unless the acquisition is IT-related.
However, here are six reasons that an IT representative should be involved in your next deal team...