Company mergers are failing to deliver cost-savings due to problems
with IT due diligence, according to a survey published this
week.
Despite the complexities of integrating IT systems after a merger
or acquisition, two-thirds of companies do not carry out technical
due diligence.
Just over half of senior IT managers are consulted about technology
fit and asset value.
But where technical due diligence standards are met they result in
the abandonment or delay of a fifth of mergers.
"The true costs of both acquisition and post-deal operating
overheads cannot be established without that work being carried
out," warned the report, which was based on the survey of leading
IT directors conducted by research firm the Bathwick Group.
Cultural integration and software and network integration are seen
by IT directors as the key business issues following a merger.
Skills and hardware integration are awarded the least
importance.
A widening of IT directors' roles means the job is increasingly
seen as a route to the job of chief executive, according to the
survey of 137 leading IT directors in the UK.
Almost three-quarters of those surveyed said the skills they
require have changed since the arrival of the internet, with
marketing and brand management, finance and customer product
development rising in importance and eclipsing traditional
technology skills.
This means almost half of IT directors' decision-making time is now
spent on business-related issues, bringing them into contact with
senior managers across the company.
Less than one-third of their time is given to technical
issues.
"It is clear that CIOs have become key asset managers, and as the
skill set demanded by the role becomes deeper, being a CIO may well
become a favoured route to the top job," said Jonathan Steel,
chairman of the Bathwick Group.
The new role means IT directors are finding their jobs increasingly
stressful.
The combined pressure of longer working hours, keeping up with new
technologies and coping with budgets and expenditure levels were
highlighted as the major causes of stress.
When coping with reduced budgets the most popular option for IT
directors is to lay off IT contractors and cut IT projects.
Cutting IT staff is rated at only seventh on the list of 10 likely
responses.
David Brown