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Licensing the big M&A bugbear, say IT bosses

Antony Savvas

Software licences and liabilities pose one of the biggest IT challenges to chief information officers following a merger, according to research from Computacenter.

Senior IT executives view the prospect of a merger as a minefield of software compliance and legal issues, and the concern comes at a time when mergers and acquisitions (M&As) are reaching levels not seen since the dotcom boom.

The Computacenter research, based on responses from 100 CIOs, found that over two-thirds (68%) of IT directors agreed that M&As were a minefield of compliance and legal issues.

In addition, 47% said they would have software compliance concerns following a merger or acquisition.

On a more positive note, 44% of the 100 CIOs recognised that the audit, change and consolidation involved in the M&A cycle could be an opportunity to improve existing IT systems and procedures.

But over a fifth (22%) didn’t see any potential improvements that could be realised post-merger.

When it came to savings, 45% of IT directors agreed that savings from hardware were easier to achieve, with only 13% thinking software savings were easier to realise.

Ovum analyst David Mitchell said, “If a company says it is looking to make savings of X when an acquisition takes place, then we estimate that between 30% and 50% of those savings will come from IT.

“We put about 25%-40% of the IT savings down to software. In simple terms, if they’re quoting £5m savings, there's at least £1m to play for.”

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