Managing it risk during a global business merger
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Managing IT Risk during a Global Business Merger Cheryl Danson April 2005 Managing the IT challenges and risks in a Global Business Merger My presentation is about Managing the IT challenges and risks in a Global Business Merger

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Managing it risk during a global business merger l.jpg

Managing IT Riskduring a Global Business Merger

Cheryl Danson April 2005


Slide2 l.jpg

Managing the IT challenges and risks in a Global Business Merger

  • My presentation is about Managing the IT challenges and risks in a Global Business Merger

    • What are the IT challenges and risks to be addressed in a global business merger?

    • What precautions should be put in place to manage these?

    • What are the priorities for IT integration to support the new business?

    • How should these be managed before, during, and after the merger?


My career l.jpg
My career Merger

  • 1967 - Vauxhall Motors, IT apprentice

  • 1972 - F International, IT consultant

  • 1981 - Lipton Export (Unilever PLC)

    • Roles included IT manager, Supply Chain Logistics Manager, Head of business systems

  • 1992 - Lever Industrial, Global IT Director applications and development

  • 1997 - DiverseyLever Global IT (Unilever PLC)

    • Roles included, Head of the Project management office including Help desk, Head of IT security, IT Director for emerging markets, IT Director Global Account Management Supply Chain

  • 2002 - DiverseyLever acquired by Johnson Wax to form a new company Johnsondiversey

    • My current role is IT Director, Functional Account manager IT for Global Supply Chain and EMA Research and Development


Overview l.jpg
Overview Merger

  • Integrated approach to IT systems management

  • Integration steps

  • People

  • Costs and risks

  • Potential benefits

  • (some of) the risks

  • Summary


Integrated approach to it risk management l.jpg

Business & Strategy Merger

Integrated approach to IT risk management

Processes

People

Systems

& data


Integration steps l.jpg

Pre-plan Merger

1

Integrate

2

3

Assimilate

Best Practice

4

Integration steps


People l.jpg

Retain Merger

1

Re-organise

2

3

Restructure

Retrain

4

People


Cost and risks l.jpg

Merged companies spend about 12% of their IT budget on training, consulting and severance at the outset of the merger;* source: Forrester research

Process

People

During a merger cost spend increases from 2% NPS to typically 4% NPS. This will reduce with the implementation of improved business processes

Systems

& data

Cost and risks


Potential benefits l.jpg

Merged companies spend about 12% of their IT budget on training, consulting and severance at the outset of the merger;* source: Forrester research

Process

People

Systems

& data

IT Benefits to be gained:

Opportunity to improve people, processes and systems

Retain best IT resources

IT savings in applications and infrastructure synergies

IT Organisational efficiency

Centralisation of data centre facilities

IT Contract negotiations and Buying power

Shared IT disaster recovery

Best practice processes

Do more for less

During a merger cost spend increases from 2% NPS to typically 4% NPS. This will reduce with the implementation of improved business processes

Potential benefits


Risk 1 l.jpg
Risk 1 training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • External and Internal Customer’s experience reduction in service

  • Risk Management:

    • Inform them about what is happening and what to expect

    • Web systems

    • Customer Invoicing

    • Service level definition and monitoring internal and external


Risk 2 l.jpg
Risk 2 training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • IT resources become unsettled and leave

  • Risk Management:

    • Get to know each other, ‘Face to face’

    • Keep everyone busy

    • Set up Retention schemes and Delivery bonus

    • Selective use of contractors/consultants

    • Ensure fair treatment in selecting people for roles in the New organisation


Risk 3 l.jpg
Risk 3 training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • Customers and employees have inadequate Communication

  • Risk management:

    • Implement quickly the internal IT communication systems, for example office applications and Email

    • Communicate regularly and appropriately to employees

    • Communicate regularly and appropriately to customers


Risk 4 l.jpg
Risk 4 training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • IT costs escalate and loss of control over IT spend

  • Risk management:

    • Align IT to business strategy

    • Stop non priority projects

    • Define the Governance processes and procedures

      • Project priorities

      • Project budget

      • Project monitoring


Risk 5 i l.jpg
Risk 5 (i) training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • IT applications and infrastructure do not support the merged business

  • Risk management:

    • Prepare Applications and Infrastructure Inventory

    • Determine interim Application and infrastructure systems strategy

    • Stop projects

    • Ensure quick integration of operations

    • Safeguard Financial reporting


Risk 5 ii l.jpg
Risk (5) ii training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • IT applications and infrastructure do not support the merged business

  • Risk management:

    • Determine location for Servers

    • Define standards for PC’s and management

    • Set up Help desk support for:

      • Application and system issue reporting

      • Define Service level

      • Monitor performance


Risk 6 l.jpg
Risk (6) training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • UnclearIT processes and ways of working

  • Risk management:

    • Define the IT ways of working

    • Set up a Project Management office

    • Be clear on Roles and Responsibilities

    • Monitor the implementation


Risk 7 l.jpg
Risk (7) training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • Business becomes vulnerable due to out of date IT security systems and tools

  • Risk management:

    • Ensure IT security is safeguarded

    • Identify IT risk and control

    • Set up Disaster recovery plans and testing


Risk 8 l.jpg
Risk (8) training, consulting and severance at the outset of the merger;* source: Forrester research

  • Risk:

    • Inadequate Management reporting to support the merged business

  • Risk Management:

    • Define the Key business statistics and KPI’s

    • Define and implement the business data structures

      • Standards

      • Products

      • Hierarchies

    • Develop reporting systems


Summary l.jpg
Summary training, consulting and severance at the outset of the merger;* source: Forrester research

  • A merger is hard work and stressful for IT and the business

  • Pre merger planning

    • Conduct Due diligence

    • Learn as much as possible about both companies IT systems

    • Ensure early involvement of IT

  • During the merger

    • Determine the IT priorities

    • Safeguard the external and internal customer interface

    • Retain IT resources

    • Implement Governance and controls

    • Merge as quickly as possible

  • After the merger

    • Improve people, systems and processes