How One Company Handles IT Integration During M&As

Loraine Lawson
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Integrating IT systems can be one of the great tasks of a merger and acquisition; indeed, for some, it's a Herculean task that can be a stumbling block to a successful M&A.


When it comes to integrating IT shops, even Hercules couldn't manage it better than Avnet, an electronic components distributor. The company has acquired over 69 businesses and along the way, has honed its IT integration plan of action so well that CIO Steve Phillips says it can bring an acquired company's IT systems within the Avnet fold within 90 days.


It sounds crazy, right? Phillips thought so, too, when his own company was acquired by Avnet.


Phillips spoke about Avnet's integration strategy at this month's Computerworld Premier 100 IT Leaders Conference and Computerworld blogger Mitch Betts wrote about Phillips' presentation. When one reader expressed disbelief about the 90-day number, Phillips actually responded:

I think I told Avnet's CIO at the time that he must be mad to believe they could integrate the IT systems in 90 days. I gladly took back those words when I saw that that it is very possible based on Avnet's depth of experience and sheer amount of institutional knowledge. Now, five years later, I've been involved in integrating more than 20 acquisitions. Many of those IT integrations were completed in 90 days after the transaction closed.

Computerworld also recorded a video chat with Phillips before the event, asking for his top five tips for integrating IT systems during a merger and acquisition. My favorite: He cautioned against over-analyzing the situation. Instead, he said, move with deliberate, thoughtful speed. His other four tips:

  1. Focus on synergies, particularly cost synergies.
  2. Create a living document to contain up-to-date guidelines about what worked and what didn't. Avnet uses SharePoint for this and revises it after every M&A.
  3. Be open, honest and transparent with the other company-and this includes sharing as much information as you can about job losses and changes. My guess is most companies do just the opposite.
  4. Be ruthless about the IT integration. Stop any in-progress endeavors and focus everyone on the IT integration so the work is completed quickly.


In his comments to Betts' blog post, Phillips did acknowledge complete integration takes longer than 90 days. But the fact is, technology integration is often a huge cause for failure during mergers and acquisitions. By integrating IT first and quickly, a company improves its chances of success with the overall acquisition. As Phillips says, (again, in the reader comments):

At Avnet, one of the first areas we focus on following an acquisition is making sure that the IT systems of both companies are integrated. This provides a great starting point for everyone to begin communicating and doing business as one unified company. It's a key first step on the path to cultural integration.

And 90 days to integrating anything, much less two different IT divisions, is impressive. I'm guessing not many companies can best that time.

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