Growing your business

Merging IT isn't just about building common systems. It's about creating value.

The effective integration of IT departments can support a successful merger and help to create real value for the emerging company.

It's a fact of business life that every business must grow - whether that means expanding internationally, breaking into new markets or becoming a larger, consolidated organization. Growth presents its own challenges, but we're here to help our customers manage expansion successfully.

The continuing wave of mergers, divestitures and acquisitions across all industries, puts IT in a pivotal role. Mergers or acquisitions certainly allow companies to combine resources and create a platform for growth. But when companies are so dependent on IT, the pressures and expectations on the respective IT departments are high.

80% of merged companies experience a slump in IT performance in their first year.

Smooth integration becomes vitally important and there's a demand for flexible IT structures that can be scaled rapidly according to the needs of the growing business.

History reinforces the point. It's an unfortunate fact that many mergers and acquisitions fail - often for mundane reasons such as the inability to merge the information systems of both parties effectively or quickly enough. Even on a smaller scale, Gartner reports that 80% of merged companies experience a slump in IT performance in their first year. One of our priorities throughout is to reduce the duration and the depth of that slump.

So how do we achieve a smooth integration?
We get involved early. We employ a well-developed process of analysis and planning that brings IT objectives into line with the overall objectives of the business and establishes a solid basis for creating value as the new company moves forward.

Phase 1: Planning

Involve the IT unit as early as possible:
- Set the strategic, financial and operational objectives for integration
- Establish the integration program
- Complete first round of planning and prioritization
Phase 2: Design and Integration

Integrate the people, processes and technology from the organizations:
- Establish a minimum ‘to-be’ situation
- Lock down required resources
Phase 3: Value Creation

Transform the new organization by implementing best practice, involving the redesign of organizational and business systems and conversion to bring the company to new levels.

Relevant cases

Streamlining IS/IT and Reducing Cost Together

During the integration of Hydro's Oil & Energy division with Statoil, a key issue was the harmonisation of the two companies' IS/IT systems and architecture, ensuring that duplication and unnecessary cost were avoided and keeping operational stability. The key to success was trustful close cooperation, based on high IS/IT, project and business competence and experience within the area of mergers and acquisitions.

End of 2007 it was decided that Statoil would merge with Norsk Hydro's Oil & Energy division into a new company, StatoilHydro, later to become Statoil. While the migration was taking place, it was paramount to maintain operational stability in order to avoid impacting normal business operations. Nonetheless the migration should also be executed as quickly as possible in order minimise the time and therefore cost associated with operating duplicated environments

Exit Management Process

In terms of size and complexity, this was Norway's largest ever IT project at the time. Our long and successful experience of handling similar processes was probably one of the reasons why EVRY was chosen to run the program “Exit Management”, initiated after the initial integration project.

Whilst EVRY took the lead for the formal program and project management, the process required a very close and precise coordination with Statoil's IS/IT and business organisation, in order to define and agree upon what should be changed or removed, how and when. It was this trustful close cooperation between the different parties that was key to ensuring the success of the project, where EVRY was also able to take the role of an advisor and help to balance conflicting requirements for simplifying and harmonising the IT system landscape by keeping operational stability.

The Result

The Exit process has been executed with minimal disruption to business operations or unplanned downtime of the affected systems. The exit program has resulted in cost reduction, followed-up professionally by EVRY, with clear KPI reporting.

Whilst cost reduction was a primary aim, other benefits as a result of the process include a simplified system landscape with increased application transparency and a harmonised user experience – same access interface and processes, regardless of whether system came originally from Hydro or Statoil.

Phase 1: Planning

Phase 2: Design and Integration

Phase 3: Value Creation

Exit Management Process

The Result