Not all of the M&A activity taking place today will result in thriving companies and happy shareholders. What makes for a good M&A? Mercer Management Consulting studied 340 large acquisitions that took place between 1986 and 1996 and found a success rate (good returns to shareholders compared with industry averages) of less than 50%. When acquisitions did succeed, the cause, Mercer says, was less likely to be price or strategy than "post-merger management." What makes for successful post-merger management, and are there implications for the IT function? Mercer cites three key characteristics:
- A compelling, ambitious vision that is understood and valued by shareholders and management and is well communicated to all, particularly the internal audience.
- A pragmatic approach to alignment of all functions, including corporate culture.
- Fast, focused transition that avoids a common pitfall: forgetting or ignoring promised synergies because the transition was allowed to drag on too long. "If companies take too long to align IT, for example," says Mercers Erich Almasy, "theyll get the systems talking, eventually, but wont take advantage of the actual information they possess about customers to strengthen relationships and discover new opportunities."