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Small and Medium sized companies are inevitably faced with a variety of complex integration issues upon closure of their merger and acquisition transaction. Hopefully, the largest business and technology risks have been identified through a quality due diligence effort.

Top Technology Integration Issues

• Infrastructure inadequacies – skills and environment
• Mission critical business applications  -  interfacing/migration/”sunsetting”
• Single points of Failure Identification
• Customer Advocacy – problem/project resolution/accountability

Rarely, do these companies have the expertise on staff that can rapidly prepare and execute proper mitigation plans to deliver a smooth transition with the forecasted return on investment. The delivery of a 180 day plan is surely to be required by the investors – synergies need to be implemented to realize the projected ROI. Risk and Change management requirements of the transaction are often underestimated and the existing management team is typically struggling to recover from the exhaustive pre-transaction activity!! With facing new challenges, the company may need to augment the management team on a temporary basis with some expert heavy-lifting from an experienced consultant.
Most CEOs hate the idea of Consultants but the wise ones realize that, correctly chosen, the Consultant can provide the needed expertise to “jumpstart” the transition and then should seamlessly - exit. The ideal choice would be a consultant who has been a valuable part of the transaction team during the due diligence effort – or has done similar, quality engagement work. Obviously this would minimize the ramp-up time and shorten the duration of the engagement.
The organization needs to obtain the exemplary technology management consultant who will collaborate with the management team to develop and execute the tactical, short term plans. The project management expertise of the consultant should be able to provide the necessary guidance to the team to accurately prioritize the outstanding business and technology projects while improving the accountability of in-flight projects. It’s pivotal for business and technology leaders to align their needs to achieve operating efficiencies and implement expected synergies.
Long term planning (post 180 day) may also be achieved but the consummate Consultant should incorporate a leadership transformation component in the plan – the consultant’s exit strategy! Delivering quality education, instilling best practices and mentoring leaders are tasks that the consultant should plan and perform throughout their engagement – or they are doing a disservice to their client.

Senior Executive inspires and motivates team members with music greats to “get through” the Information Technology quagmire.

The process to achieve remarkable results in business functional areas with the information technology tool set is less than fun. The phrase ‘put away all sharp objects’ including your tongue is vastly appropriate when dealing with mind-numbing details of technical specifications and business requirements.

Often I mark time, mark the moment with really great music.  What was playing when you finished your last final exam –ever?  What tune was beating in your head when you struck a major deal or scored a major victory?  Powerful, meaningful, breathtaking - leaving an indelible, positive imprint in your mind.

Below are some imprints I have chosen to share to help others positively, readily identify a milestone of success with great music.  Is it one of those branding, marketing ideas that I took a bit too far?  Perhaps, but listen and hopefully you will enjoy and be inspired. The intent was to make very dry, technical material a little more tolerable!!

One may ask – how do you connect Clapton and Dylan with Due Diligence and Project Management?  Tough to do, but I find that achievement of each milestone comes with a bell ringing – the tone may differ, the mood change, the direction alter but we celebrate and move through with more energy and creativity to be released.

My musical references are often sarcastic even cynical but accurately reflect the emotion of the project phase and the promise of the next steps. I hope you are inclined to listen to these songs and that they provide inspiration and motivation in your future endeavors.

In the guide book “FLUSH”  the project phases are those you would expect to encounter during a typical due diligence effort for a corporate merger and  acquisition.

The Initiation Phase :  filled with anticipation and excitement of new opportunities and engaging personalities

“My Aim Is True” - Elvis Costello

The Execution Phase: the dust has settled, things are not as expected, people are reeling from the disclosure and level of information

“Dazed and Confused”  - Led Zeppelin

The Closing Phase:  the conclusions have been drawn and quartered – so have the companies!!

“Hold On”  –  Sarah McLachlan

 For more “FLUSH” and Sweet Bitch - see EBOOKS category

 © Copyright 2011  Amelia W Wright

“Ways to Screw the Pooch” - a great urban phrase denoting major blunders and mistakes that one can make in crucial situations

Several of my top ones are listed below:

Know your abilities and do not overreach. Taking on the ITS due diligence assignment is not an easy one – especially for the novice. ITS is an environment fraught with acronyms, constantly changing hardware and software, complex policies and procedures. The ITS personnel can be very ‘challenging’ as well. They may feel threatened by the intensity of the requests and react in a defensive, posturing manner which may result in little cooperation and poor quality deliverables. Do not oversell your skills. You may need to request expert assistance to help investigate specialized topics or to work with challenging individuals, which will be hard to do if you have oversold yourself.
Don’t be left holding the bag - develop comprehensive ITS templates. As the ITS due diligence leader, you need to provide templates and instructions on how to complete them to appropriate team members. Best to take the “Template for Dummies” approach – the templates need to encompass all important IT subject matter areas within the organization. Team members are not typically comfortable on the IT topic – too much mumbo jumbo talk – so they prolong the effort as much as possible. Cover your ass and document your attempts for review, approval and closure. You do not want to be left ‘holding the bag’ while you are under a deadline to complete the due diligence effort.
Do Not Set Limits. You should not limit your request for information based on the organizational structure of the company that you are investigating. Substantial risks may be exposed because the ‘hand off’ between departments is flawed and appropriate controls are not in place. Your requests should be function or process driven, not organizationally.
Prepare for Interviews. Be sure to come to each interview prepared with proper introductions and quality questions. Know titles and reporting structure, pertinent historical and background information. Questions should include a) those that require explanation, b) those that you may already know the answer to but you would like confirmation and c) those that identify strengths and weaknesses in skill set. Always take notes but make strong eye contact. Try to establish a rapport – but at the end of the day- remember that you are the investigator – perceived by all, to be trying to find deficiencies within the organization. You are not trying to win friends or influence others! Your approach needs to be methodical, consistent and professional.
Do not Screw the Pooch twice. If somewhere along the review process an item or area is identified that you did not sufficiently cover in your investigation – ask for an extension to provide an analysis. DO NOT gloss over the oversight and make it seem ‘immaterial’. You never know what you do not know.

For more advice and counsel on successful Due Diligence efforts contact AWright at 610-405-1615 or Review her EBOOKS in the ebook category on this website.

© Copyright 2011  by Amelia W Wright

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Due Diligence for the Information Systems component of a Merger and Acquisition is not an easy task to perform well unless you have a substantial, well-rounded technical background & understand the concepts of  risk management and material importance.  Not an easy job description to fill - and yet this is a job that is essential to the success of a company’s future - regardless if the company is the potential buyer or the seller.  Often time the role is assigned to a professional that is less than qualified for a variety of reasons  - which I will outline in a future post. For now I want to help the professional who got the assignment.

1.  Request  Business Operations and IT organization charts - with job descriptions and salaries.  The Business chart should only need to go 2 or 3 levels of hierarchy to get an understanding of the corporate decision making practices and the interaction with the IT group.  The IT chart needs to be detailed - all positions (filled & opened, consultants, part-time) 

2.  Request an overview of the application and environment topology.  Provide an outline to help structure the overview and one that you can continue to refer to- for further detail.  This framework will help establish terminology (always different between groups) and keep everyone involved (the bankers, the funding organizations, the executives and you) organized, focused - and documented.  A key component of the framework should be the financials associated with IT annual costs and projected capital expenditures. 

3.  Request individual interviews with the leaders/managers within the IT group concentrating on their area of responsibility but getting answers on a core group of questions involving customer/business interactions. Typically these are related to vendor, project and change management practices and policies.

4.  Request individual or group interviews with business functional area leaders. The goal of these interviews is to understand  production support issues,  business application goals that may have an impact on current or future revenue projections.  These interviews will also serve to identify “gaps” between the business perceptions and IT perceptions of the information systems and the organization.  Always interesting.

5. Prepare initial findings and identify potential major risks - on a preliminary basis.  Next steps need to be prepared which will be dependent on your own talents and skills.  You may determine that you need a subject matter expert to further evaluate the risk - i.e. typical areas:  Network topology/redundancy, disaster recovery, vendor licenses. 

Please contact me for further information around framework, inital findings and getting prepared for the interviews - Best of luck

Rarely, in a healthcare acquisition due diligence effort will the technology findings materially impact the final decision, but they can certainly help once the deal is completed - if the technology due diligence effort is comprehensive - not just counting servers and establishing financial application risks!  A thorough evaluation would acknowledge what business systems need to be enhanced to maximize efficiencies and improve growth.   The analysis should include the infrastructure and implementation costs of the new systems, as well.  Upon close, immediate  execution of those findings could help the new owner’s recognize their financial expectations - perhaps even in a shorter time frame than projected.