IT M&A I Best Practices I NuggetHub

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I T M & A
Best Practices

IT M&A Frameworks2
Introduction1
Agenda
IT M&A Operating Models3
IT M&A Processes4
IT M&A Post Merger Integration5

Realizing synergies, achieving growth targets and closing strategic gaps are key to
achieve the overall target of value creation
Objectives of M&A operations
Strategic acquisitions
 Acquire strategic resources:
- R&D related potential (patents, inventors, R&D expertise, tec.)
- Trademarks and brands difficult to build ex nihilo (e.g. perfumes in
cosmetics business)
- Intangible assets (key people, reputation)
 Allow strategic diversification
- Change Core business
- Complete activities and enrich Core business
- Geographical expansion, vertical integration
 Consolidate / Increase market power
- Infrastructures (e.g. distribution network)
- Products, Customers
- Follow industry trends
 By-pass customs, administrative and protectionist
barriers
- Political regulation
 Change competition rules
- Suppliers, price coordination
- Horizontal integration
 Initiate internal changes
- Cultural change
- Social impact
Financial acquisitions
 A firm is taken over purely for the reason of improving
efficiency and being sold (in parts) or stock listed as exit
 Typically in the form of a Leveraged Buy-out (LBO) or a
Management Buy-out (MBO)
 Motivations:
- Inefficient management
- Under pricing
- Wealth transfers
- Exit strategy with significant reasons
 Increase financial resources
- Generate cash due to assets easy to divest
- Leverage capacity of investment
- Tax benefits

In case of an acquisition, various Business drivers aims at achieving growth
targets and/or closing strategic gaps
Business-side acquisition drivers
Product/services
newold
newold
Market coverage
Market
dominance /
cost reduction
Geographical
expansion
Product
expansion
Diversification
merger
Restructuring and/or focusing on Core business lead to acquisitions transactions
but also to carve out operations
Strategic target Business drivers
Market dominance
/ cost reduction
 Cost reduction (economies of
scale)
 Asset portfolio improvement
Geographical
expansion
 Access to new customer /
suppliers
 Forward / backward integration to
protect sales / supply
Product Expansion  Increase current market
leadership
 Realize economies of scale and
scope
Diversification
Merger
 New opportunities through
diversification and expansion
 Form business conglomerate

IT M&A Frameworks2
Introduction1
Agenda
IT M&A Processes4

Even if M&A activities follow cyclic waves, operations take place during both
growth period and economic downturn
Merger and Acquisitions – Overview
Key messages
 M&A activities follow cyclic waves
 Financial crisis has triggered a new
wave of M&A activities
 Businesses can be taken over for
relatively low prices
 Strategic M&A are considered to
strongly re-position a business during
an economic downturn
Value of M&A deals 1980 – 20081 (in trillion USD)
5,0
4,5
4,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
08

More than half of the Merger & Acquisition (M&A) operations do not deliver
the expected value
Success rate and key success topics of mergers
Number of
operations
45% Succeed55% Fail
80
70
60
50
40
30
20
10
0
90
0.35
0.45
0.55
0.65
0.75
0.85
0.95
1.05
1.15
1.25
1.35
1.45
1.55
1.65
1.75
More
Stock price / stock price index of the new company sector along a 2-year period after the deal
M&A Operations in a ten year period

Main reasons of M&A failures are related to People, Process and IT systems
Why mergers don’t work
 Loss of critical people
 Declines in market share from competitor
opportunism
 Lost market share from negative customer
perceptions
 Uncontrolled costs
 Unrealised synergies: business processes and
information systems not properly integrated
 Strategic confusion
 Leadership crisis
 Loss of confidence
- Financial markets
- Customers
- Employees
Reasons why M&A fail … … and the results
 Pre-deal reasons
- Lack of compelling strategic rationale
- Unrealistic expectations
- Inadequate financial and strategic due
diligence badly conducted
- Competitive bidding - Paying too much
- Synergies overestimated
- Path to unrelated diversification
- Following the industry leader
 Post-deal reasons
- Increased difficulty in management due to
the new, more complex firm; failure to
effectively integrate
- Synergies not delivered / took too long
- Stakeholder resistance underestimated
- Egos
- Conflicting corporate cultures
M&A will become more and more difficult due to complexity of information management

IT M&A Frameworks2
Introduction1
Agenda
IT M&A Processes4

As M&A operations are usually complex and combine both approaches –
Integration and separation – With some common activities to be managed
Merger / Acquisition
Company A
Company B
Company A Company A
Carve-out: creates a new subsidiary while retaining control.
Transaction creates separate legal entities
Company B
Carve out / Demerger
Day 0
Deal announced
Day 1
Ownership changes
Separation strategy Due diligence
Carve-out
Transition / Integration
Cutting Day 2
Demerger: Corporate strategy to sell off
subsidiaries or divisions of a company.
It can also result from government intervention,
usually by way of anti-trust/competition law
Subs.
Company A Company A
Company C
Company A
Company B

Most of companies use 1 of these 3 classical models to set their corporate
consolidation / integration strategy
M&A Operations Types
CompanyA acquires Company B; 3 scenarios are possible for
property transfer and shares payment:
 Cession of shares
- Shareholders of the target (B) sell their shares to company A against cash
- Company B becomes subsidiary of Company A
- Increase debt and reduce treasury for Company A
 Shares swap
- Company A buys shares of company B
- Increase capital of company A
- Company B shareholders receive shares of company A
- Dilution of control for shareholders of company A
 Assets Paid-in
- Company B brings assets to company A
- Company B receive shares of company A and becomes shareholder
Financial modesMerger / Acquisitions
+
=
+
=
 Absorption
- Acquired organization is completely absorbed by
the acquirer
- Acquirer's business processes dominate and the
acquired organization must adopt them
 Stand-alone
- Acquired organization remains independent
- Keep areas of autonomy
- Mutualise and rationalize
- Least-disruptive model
 Merger of equals
- Best-of-breed organization is developed from both
parties
- Build a new business model from the strongest
components of each organization
- Assess each business process and the best are
selected and integrated into a new set of
processes to serve the new business model
- Highest degree of change and risk.

IT M&A Frameworks2
Introduction1
Agenda
IT M&A Processes4

Majors stakes for M&A operations are related to Strategy, Operations, Legal and
Finance
Integrated M&A Process
Strategy Review -
Screening & Selection
Pre-Deal Evaluation
Securing the Deal
Ensure Business
Continuity
Integration/
Separation
Execution
Closing
Strategy
Legal
Operations
Finance
Post-DealPre-Deal
 Geographical
expansion
 Product Expansion
 Diversification Merger
 Business continuity
 Suppliers policy
 Processes
 TSA
 Legal entities
 Anti-trust
 Synergies
 Control cost
 Cash
DAY 1 DAY 2
Envisage Prepare Secure Finalize
It is key to run an M&A operation as an integrated process, from strategy to execution.
All functions in the company need to be involved and coordinated to make the operation a success

Value is created when Acquisition / Carve-out operations are managed as a fully
integrated process
Integrated M&A Process
Deal Post-DealPre-Deal
 Target setting /
objectives
 Means to achieve
objectives
 M&A strategy
Strategy Review
objectives
 Screening and
profiling of
candidates
 Pre-selection
 First contacts
Memorandum of
understanding
Screening &
Selection
 Strategic re-
commendation
 Implementation
Pre-planning
Letter
of intent
Pre-Deal
Evaluation
 Due Diligence
 Negotiation
 Closure
Closing
of the deal
Securing the
Deal
separation projects
 Determine targets
and landscape
 Check-list of key-
decisions and
activities
 Tracking of
synergies / costs
Ensure
Business
Continuity
separation concept
 Tracking of
milestones and
indicators
 Mobilization and
communication
Integration/
separation
Execution
“100
days”
Signing
DAY 1 DAY 2
Transition
 Strategic direction  Define selection  Detailed evaluation  Financial structure  Launch / deploy  Detailed
and alignment criteria based on and assessment of the deal integration / integration/

Managing an M&A operation is very complex due to the various and numerous
actors involved in the different phases of the operation
Facing both vertical & horizontal dimensions is the key challenge of M&A program management:
Ensuring coordination of multi-functional team and alignment of the players all over the operation
Pre-Deal Evaluation
Securing the Deal
Ensure Business
Continuity
Integration / Separation
Execution
Strategy Review
-Screening &
Selection
Closing
Post-Deal
“100 Days”
Pre-Deal
Letter of intent
DAY 1 DAY 2
Signing
Executive committee
Strategy
Communication
Business operations
IT
Finance (incl. tax & controlling)
HR
Legal
External layers
Consultants

M&A program management objective is to minimize potential failures whilst
leveraging critical success factors
Critical success factors
 Avoiding or delaying the tough decisions
 Lack of Senior Management alignment
 Organisational confusion / miscommunication
(internal, external)
 Planning too little too late
 Failure to capture key value components in first 100
days
 Inappropriate performance measurement systems
 No explicit value tracking
 No common framework / language for managing the
merger process
 Over-focus on strategic rather than operational
integration / separation
Failures – leading to value leakage
Strong
Leadership
Prioritisation
/ Speed
Strategic
alignment
Risk
Management
Communi-
cation
Quality of
delivery
Change
Management
Retain Key
Talent
Sufficient
Resources
Performance
Tracking
Cultural
Integration
Detailed
Planning
Clear Vision /
Objectives
Program
management
Potential failures

The Day 1 operating state summarizes what needs to be in place prior to the
kick-off of the new company
Day 1 operations
Goal Objectives Focus areas Activities Deliverables
Create
stable &
transparent
operating
platform
Exploit value
opportuni-
ties
Ensure pre-
transaction
promise is
on track
Establish
Day 1
operating
state
Business
control
Talent
retention
Performance
systems
Performance
achievement
Stakeholder
buy-in
Value delivery
 Align top stakeholders
 Broadcast successes to external stakeholders
 Define organization structure for senior personnel
 Put consistent financial authorities and controls in place
 Assess IT connectivity
 Put basic business processes / policies in place
 Ensure early completion of high impact social issues:
signage, business cards, titles, reporting relationship
 Identify and lock in key talents
 Identify and notify “keepers / leavers”
 Communicate key messages at every level
 Operationalize BU performance contracts
 Put new performance measurement system in place
 Put incentive structure in place
 Identify Day 1 risks / issues and develop contingency
plans
 Communicate intended benefits and impact to customers
 Communicate progress and quick wins to staff
 Day 1 milestone plan
 Day 1 contingency /
risk mitigation plan
 Day 1 readiness plan
 Day 1
communications
plan
 Day 1 employee
guide
 Issue resolution
centre

Having a right understanding of the risks that inevitably occur is key for a
successful M&A operations
Challenges
Risks
4. Outdated behaviours and
capabilities
3. Lack of true sustainability
2. Loss of control
Description
1. Loss of direction  Too many activities without clear priorities
 Changing needs of stakeholders not taken care of
 Mission creep, scoping becoming fuzzy over time
 Inherent conflicts of interest are under managed
 Decision processes with key stakeholders are under managed
 Parallel projects not aligned
 Quality gates to be recognised – risk reduction
 New solutions not stabilized in day-to-day business
 Parts of the necessary changes do not happen at all
 Continuous improvement philosophy missing
 Opinion leaders are not put into the driver seat
 Lack of pace in changing leadership behaviour

IT M&A Frameworks2
Introduction1
Agenda
IT M&A Processes4

The integration strategy defines the degree of integration of the subsidiary
NeedforAutonomy
Interdependence
Low High
LowHigh
What is the best integration approach for each function and capability:
 Which ones, ideally, need strong preservation?
 Which ones, ideally, require full integration?
 Which ones, ideally, need to evolve symbiotically?
Integration Framework Explanation
Need for OrganisationAutonomy
 Is there a need to preserve distinct cultures after the merger?
 Which of these capabilities, functions, key dimensions should
be kept in autonomy
 Can these capabilities and functions, … be preserved in
distinct sub-units or do they depend on broader organisational
qualities?
Strategic Interdependence required
 Given the extent of complementarities and overlap, and given
the growth expectations, what is the need for strategic
interdependence among the two businesses within each
dimension, for specific capabilities, and for individual
functions?
Preservation Symbiosis
Full integration

All the efforts have to be focused on IT resources dedication on the merger for a
12-18 months period; freeze all systems evolution
Ensure the new corporation
delivers world-class
performance by using IT tools
Reach synergies by
implementing new IT
landscape
Ensure business continuity
and determine IT synergies
target
 Ensure business continuity
 Define IT impacts of day 1
requirements
 Launch/deploy day 1 IT projects
 Determine IT synergies target
 Determine IT landscape (organization
and platform) to reach synergies
target
 Deliver synergies
 Implement new IT platform
based on synergies
 Implement new IT
organization based on
synergies
 Define new IT strategy
 Capture new opportunities
 Set-up new processes
 …
18-24 months
IT Post Merger Integration IT Strategy
FROZEN DURING
POST MERGER INTEGRATION
Time
Added-value
Day 100Day 1 Step 3 Step 4

IT Methodological Pack Structure – Focus on IT activities
2.0 - IT Project
Management
2.7 -
TSA
IT as stand-alone Business
2.1 - Infrastructure
2.2 - Applications
Industrial
applications
ERP
Transversal
services
Support &
maintenance
2.6 - People, Organization & Change
2.4 - Projects portfolio
2.3 - Sourcing /
Contracts /
Licenses /
Intellectual
Property
2.5 – IT Financial aspects
2.8 - Due diligence

2.0 IT Project Management
Introduction Project Management
IT Project Management refers to a part of the global M&A Program Management
Program management (M&A level) is
composed of different functions, including
HR, Business operation, Finance, IT, …
IT project management consists in doing
both:
1. Connection with M&A program
management and other functions
2. Management and coordination of
various IT streams
PM
Finance Function
Sponsor
Streams
Streams
PM
Business Operation
Function
Sponsor
Streams
Streams
Various M&A operation
governance bodies
Program
Manager
M&A
Operation
sponsor
IT Function
IT Project
Manager
IT Sponsor
1
2
PMO
The proper governance must be settled in order to ensure coordination between IT Streams and M&A Program Management
In this module, Project Management refers to project management of IT function
POC Stream Appli Stream Infra Stream

IT Project Management is responsible for 6 major activities
supported by Project Management Office (PMO)
Setup and animate PMO Office
 Kick off the IT project staffing the team and creating the momentum
(federate teams, …)
 Establish PMO structure (team, competencies, tools, reporting …)
 Set up the relevant governance to steer the various streams and provide
the program with the appropriate reporting
 Manage interdependencies between IT streams
IT Project management processes and tools
 Supply teams with a common methodology and associated Toolbox
(templates, generic forms,…) for stream/project management
 Define and share project management process and especially alert
escalation process
IT Project controlling & reporting
 Set up controlling and reporting structure adapted to every IT streams
 Track project status
 Identify and estimate costs / synergies in collaboration with IT Finance
stream
 Make sure that confidentiality rules are respected among
streams
Animation of collaboration with business
 Co-lead Workshops with business for defining to-be
processes (process analysis / design)
 Make IT streams teams aware of business projects
advancement and vice-versa
Risk management
 Anticipate, identity and qualify the risks:
- per stream
- between streams
 Master the risks by finding and managing the appropriated actions
 Update continuously risks management log
IT project planning
 Define, build with IT streams leaders and follow up master
planning
 Provide IT streams with M&A planning constraints
 Ensure cross streams planning synchronization
 Manage experts capacity planning across IT streams
IT project
management

IT Project Manager should be aware of M&A specificities on each PMO activity
IT M&A project management
specificities
IT Management classical
approach
Setup and animate PMO Office
IT Project planning
Project management process
and tools
Project controlling & reporting
Animation of collaboration with
business
 Need for reprioritization of annual
portfolios and iterative planning of
merger tasks across business units
 Different templates, methodologies and
tools can exist and must be unified
 Necessity do define and implement
quickly a new specific governance
 Unclear political context and high
pressure
 High personal interests
 Annual business unit portfolio planning
process
 A global framework exists or can be
shared
Risk management
 IT Staff generally knows well business
and operational teams
 Stabilized "long-run" governance
 Multiple issues to identify, define, and
resolve quickly
 Must cope with human factor and
uncertain reactions
 More serene rhythm and atmosphere,
facilitating decision taking
 Strong interdependencies between
streams needing complex coordination
 Governance is usually sufficient to
ensure coordination between streams

Actions to be performed
Main Actions per M&A phase

Zoom on Phase 2
Pre-Deal Evaluation
Securing the Deal
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 2DAY 1
IT Project Start
 Establish ONE IT M&A fully-staffed Project Management Office (PMO), including controlling, and project
coordination towards business teams. Several organizational choices can be made on the team: A person
representing each country of the company vs. corporate team (cf. Additional Content)…And Elaborate
the blueprint of the IT project with objectives, forecast solutions and hypothesis, in collaboration with
M&A PM
 Estimate staffing numbers and competencies required to execute M&A-related IT work (see Tool 6:
Capacity plan)
 Establish support to unconventionally overcome administrative issues
 Define stream content in project charters (see Tool 1: Stream Charter) and the appropriate governance:
steering committee, frequency of the reporting
 Develop a master plan: Definition of targets and milestones, formalize quick wins, middle term wins and
long term wins (see Tool 4: Project planning)
 Analyze and formalize interdependencies between streams or with concurrent projects (see Tool 3:
Interdependence matrix)
 Identify risks (internal and cross-functions), confidentiality and security requirements and develop
contingency plans, escalation mechanisms (see Tool 5: Risks Log)
 Define and share KPIs, templates, reporting tools (see Tool 2: Stream Reporting)
Day 1 preparation: create the momentum
 Kick-off (in coordination with Program,
Organization & Change stream) to:
- Present the program objectives and more
specifically agree on the upcoming phase
objectives
- Define and present a training framework
- Share risks and make people awareness on
risks management importance
- Launch the stream work
 Ensure frequent work sessions are planned
with business for every stream to get people
involvement, and define the to be processes
Main Actions for Pre-Deal Evaluation

Zoom on Phase 3
Pre-Deal Evaluation
Securing the Deal
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1 DAY 2
Main Actions for Ensuring Business Continuity
This phase of a M&A operation is very different from a regular phase of a project. It can be compared to a race, with high pressure, short term
objectives …The activities are a mix of traditional PMO activities and M&A activities:
 Regular reporting of synergies, KPIs, costs and other predefined data in a balanced scorecard
- Solicit stream leaders for frequent reporting and ensure the good alerts and risks escalation
- Involve the management to enhance cooperation between streams and make teams meet. Observe confidentiality issues in this regard
- Make progress reviews and follow up KPIs
- Regularly report key information from IT streams to Program Management
 Monitoring teams and results analysis
- Control regularly the involvement of stakeholders and stream leader through quality and detail level of reporting, ensure frequent work sessions are planned for every
stream to get people involvement, and set-up cross-IT leader committees
- Early start a regular circle and schedule of reporting progress on quick win projects and integration projects.
 Initiating countermeasures if needed
- Prioritize issues and risks, identify IT-cross streams impacts, instruct action plans and follow up actions and results. Organize cross-stream workshops if needed
 At the end of this “race” phase, it is very important to take time to analyze phase 3 in order to prepare phase 4
- Sum up the quick wins results vs. expectation and objectives
- Adjust middle term and long term wins expectations
- Define and share updated KPIs on middle/long term wins
 Communicate analysis results to the different IT streams

Zoom on Phase 4
Main Actions for Integration / Separation Execution
Strategy Review Pre-Deal Evaluation Ensure Business Integration / Separation
-Screening & Securing the Deal Continuity Execution
Selection
This phase is more like a traditional, long term project management phase, using usual tools of reporting and controlling
 Visibility on project: Qualitative aspects
- Follow up and update position on the roadmap and communicate the next steps to reach the target
- Follow up middle term wins / long term wins
 Visibility on project: Quantitative aspects
- Regularly evaluate overall success by financial and measurable KPIs, disclosed to all actors
• Ex: short /long term synergies, % of TSA transferred…
- Maintain the required visibility on stream with lower frequency reporting
 Progress controlling
- Follow up progress taking into account key program milestones
- Comparison of as-is and formerly set targets
 Sustainable organization installation
- Prepare a progressive project resource destaffing
- Prepare the end of project mode and install sustainable governance (in collaboration with POC Streams): M&A Integration / Separation IT project is the first project lead
with the new teams (M&A) or without former teams (carve out). This experience has to been taken into account when designing new project organization

Golden Rules / Do’s & Don’ts
 Establish project office with clear CIO and senior management
leadership
 Keep up momentum: drive decisions
 Implement IT streams accountability/commitment for results and
tracking
 Actively anticipate risks and establish mitigation plans
 Track progress and communicate on a periodical basis with:
 Orientation Top down
 Reporting bottom up
 Clarify roles: Who delivers, supports, validates and sign off
 Set top-management escalation mechanisms to handle risks
 Ensure understanding of added value of any tool used and use
training if needed
 Clarify scope, must-wins, anticipated pit-falls and critical paths
 Include sufficient time for cross-stream coordination
 Take care of confidentiality issues
 Ensure consistency of IT stream roadmap and initial assumptions
 of the Blueprint
 Ensure staffing of fully dedicated resources rather than shared
resources continuously requested by other projects
 Don‟t consider project is over after day 1; it is just starting!
 Project management office and organization not in place during
phase 2 (day 1 is too late)
 Resources for cross-stream alignment underestimated. How to
make sure that the sizing of the PMO cross-stream team is enough
compared to the number of streams?
 Streams start M&A work without clear view on scope, deliverables,
milestones and critical paths. How to collaborate with the Program,
Organization & Change stream in order to organize the proper
communication event?
 Stream activities not synchronized: loss of speed. How to establish
since the beginning milestones in order to make sure that the speed
is right?
 Redundant activities, requests, workshops, items without added-
value. How to frequently ask for feedbacks in order to challenge /
share opinions?
Do’s Dont’s

Roles & Responsibilities
R: Responsible / A: Accountable / C: Consulted / I: Informed
M&A Program
Management
IT Project Sponsor
IT Project
Management
IT Streams
 Explain IT Project management rules
and governance (reporting frequency,
roles…)
A R R I
 Elaborate the IT Streams reporting
according to the frequency defined I C C A
 Consolidate IT Streams reporting
I C A I
 Transmit IT project reporting to M&A
program management I I A
 Select important decisions and alerts to
report to M&A program management I R A
 Make sure top management decisions
are reported to streams A I I I
 Explain confidentiality rules
A I R I

Setup and animate PMO
Office
IT project planning
IT Project management
processes and tools
IT Project controlling &
reporting
Animation of
collaboration with
business
IT Project Manager Office
 A member of both M&A
Program Management
Team and IT Project
management team
 Internal IT coordinator
Possible resources
 Middle project
management
 External consultants
 Internal controlling
 External Consultants
 Internal IT/business
experts
 Top IT Management
 BU experts or
functional experts
 Project management
 External consultants
Risk management
Skills
 Ability to mobilize
individuals and teams
 Self-monitoring ability:
watch and manage
own emotional cycle
 Exhaustive
analysis of key
contributing factors and
both impacts on M&A
Program planning and
IT Project planning
 Workshop preparation
and facilitation
 Know-how and do-how
on progress monitoring
and reporting tools
 Steering committee
planning and
management (how to
set an agenda, how to
facilitate)
 Contribution to
communication tools
and means
(announcements,
letters of the CEO,
forums)
 Network thinking:
understanding of cause
and effect situations
 Synthesis skills and
issue prioritization:
ability to separate core
from non-core, what is
the key messages to
send, what is the right
level of detail
 Quality Manager of the
IT Department
 Certified project
managers if CMMI or
ISO is in place
IT PMO Team: Examples of resources profile

Streams are responsible of the coordination between their streams and the others
Decentralized Coordination
Program
management
Stream 1 Stream 2 Stream 3 …
 Coordination
assured by
Stream 1 project
Management
office
 …  … Coordination
assured by
Stream 2 project
Management
office
Local coordination
Corporate
level
Country
level
Country 1 -Stream
1, 2, 3
Country 2 -Stream
1, 2, 3
…
Coordination of countries
Corporate coordination
Country 1– Stream
1
Country 2 –
Stream 1
Country 3 -
Stream 1
Coordination of streamsCorporate
level
Country
level
Different model of coordination between Program and projects

Specificities per M&A operation type
 Don‟t underestimate legal issues (TSA, licenses, IP,
etc.) and associated workload
 Don‟t consider project is over after day 1; it is just
starting!
 As you have access to all information you need, start
and launch maximum of activities during phase2 without
limitation
 Agree on collaborative planning, resource
commitments, timescales, etc
 Prepare and launch IT project management activities as
soon as possible, even if sometimes there is no access
to acquired company and few data before day one
 Quickly involve after day 1 some resources of acquired
company into PMO structure to ensure integration is
driven at each level (functions but also change
management, program management, etc.)
PMI (Post Merger & Integration) Carve out

Templates and Tools
 The master piece
of program
management is the
global planning
Template 4: Project Planning
 The program
manager has to be
aware of the
situation of each
stream
Template 2: Stream Reporting
 Stream
interdependenc e
have to be
anticipated and
followed
 Capacity plan is
one of the main
lever for program
manager
Template 3: Interdependence matrix
Template 6: Capacity Plan
 Program
management is
efficient when each
stream leader
master his own
road map
Template 1: Stream Charter
 Program
management
must be aware of
major risks
securing plans
Template 5: Risks Log

Template 1: Stream Charter
The stream charter is to be done to define accurately each stream. Program management is efficient when each stream leader
master his own road map
 Anticipate and
secure the potential
issues
 Define what is cover
by the stream and
what is not
 Precise by when the
deliverables are to
by made if possible
 Identify key factor of
success for each
stream
 Define indicators for
the stream

Template 2: Stream Reporting
The program manager has to be aware of the situation of each stream. The stream managers have to follow the right level of
solicitation for potential issue
 Follow the real team
composition in real
time
 Follow up the main
actions on each
stream
 Identify a
responsible and a
deadline for each
deliverable
 Sum up the main
issues and clearly
define the level of
decision required

Template 3: Interdependence matrix
Every anticipated issue has to be shared and solved to give team the opportunity to focus on unpredITable issue
 Identify actions to
secure the potential
issues
 Identify impacts a
stream activity can
have on another
stream
 Qualify the criticism
of the impact

Template 4: Project planning
Every stakeholders must be aware of the whole program planning to anticipate the synchronization issues and
keep the big pITure in mind
 Alert on
synchronization
needs and
prerequisites on this
planning
 Define transversal
activity on program
management
planning
 Share each stream
main steps and
activities
 Schedule as soon as
possible main
instances

Template 5: Risks Log
The risks log is required for the program management to prioritize the risks and focus on major potential issues
 Anticipate each
risks by investing
on actions
depending on the
criticism
 List identifiable risks
on each stream
 Define on a 1 to 5
scale the expected
gravity of each risk
 Foresee the
expected
occurrence of the
risks on a 1 to 5
scale
 Calculate criticism
by crossing Loss
Expectancy and
Rate of occurrence

Template 6: Capacity plan
 Zoom into each
project details if
required
The capacity plan is a steering tool to be followed as often as possible.
It is one of the main lever for program manager on streams and projects
 The pivot table tool
offer a synthetic
view on project
staffing
 Fill the resources
database with
individual affectation

2.1 Infrastructure
Introduction to infrastructure (1 of 4)
 Clearly dissociate Separation strategy from Integration strategy since mindset of the team can be different:
- Separation strategy: Go fast to make independent your new activity
- Integration strategy: Need a strong knowledge of the AS-IS and target, so is opposite
 Take time to understand stakes and impacts on IT before aligning teams:
- First step: Global assessment phase, where it is important to take time enough to identify the assets, the stakes of the M&A and
the macro business target
- Second step: Operational construction of the strategy, where teams must be strongly synchronized and quickly deliver on their
respective scopes (possible only if macro target and stakes are first known)
 Do accept to deliver a perfectible solution: So many teams and actors operationally interacts that the addition of perfects solution
never provides the perfect global solution. Effort must be reinforced during the global roadmap definition
 Provide to all team as many convictions as possible to limit the number of decision to be taken and help them delivering in time
 Strongly synchronizeApplications and Infrastructure teams since a specificity of IT M&A operation is that the global roadmap will
mainly be driven by the Infrastructure roadmap
Main global convictions

2.1 Infrastructure
 Two infrastructure strategies must quickly be dissociated, corresponding to 2 stakes and also 2 time horizons:
- Accessibility strategy (messaging, security, etc.) to ensure the service continuity (access to application both ways)
- Data centre strategy to make buyer independent with first physical rationalizations (strongly linked with global application strategy)
 Do early think at inventorying precisely assets (mainly when the company bought has a worldwide implantation) since this step is
often under-estimated whereas really complex (links with applications and licenses to be done)
 Do not under size Infrastructure team since the Data Centre Strategy has a strong impact and influence on the global strategy:
- Scenarios and roadmap chosen for Data centre transfer will rhythm clearly rhythm steps of the global roadmap and thereby the
transfer of its groups of applications
- Operational actions much more deal with infrastructure actions than with application actions
Main convictions on infrastructure

2.1 Infrastructure
Processes Distributed Services
Data Centre
(management of global large Data
Centres and local server rooms)
Network
(includes MAN, WAN, local LANs,
firewalls, Antivirus, MFP, Wi-Fi,
DHCP, …)
Workstation
(Messaging solution, Active
Directory, inventory tools, …)
IT Management
(Security, Hardware and software
standards for computers, 2D-3D,
servers, technologies, …)
Service Desk
(Global and local Helpdesks, on-
site support)
Infrastructure
Applications
Services
… usually divided in 5 main services
Data Centre Services
Infrastructure is one of the 4 main
layers of the Information System …
Introduction to infrastructure

2.1 Infrastructure
Application
Strategy
Data Centre
Strategy
Roadmap Project Portfolio
definition launch
Application
strategy
(and Budget)
Infrastructure
strategy
(and Budget)
IS/IT Strategy Project
(Roadmap portfolio
and Budget)
Accessibility
Strategy
 Stake1: Ensure business continuity
- Avoid as much as possible disruptions for “normal” users
- Interconnect networks and define an accessibility strategy inline with security imperatives
- Provide access to applications both ways
 Stake2: Support and foster the integration/carve-out strategy
- Make sure to define and decide very quickly an integration/carve-out strategy for
Data Centres since they are critical shared service supporting the key applications
- Iterative synchronization with the applications is mandatory in order to make sure
that feasibility and plans are coherent between both work streams
- Make sure that all parties (mainly buyer) have clear Integration directions / drivers
1 2
 Link Appli. / Servers
 Link with Data Bases
 Batch identification
 Flows identification
 Data centre feasibility
and delays
 Shared platforms
2
1
Appli. to Infra.
Infra. to Appli.
DAY 1
Phase 2 Iterative approach: Separation then Integration
Introduction to infrastructure

2.1 Infrastructure

2.1 Infrastructure
Zoom on Phase 2
 Prepare planning and actions to be done in order to secure Day 1
- Split must-have actions for Day 1 vs. long term split actions
- Dedicated zoom on network inter-connexions (IP translations)
 Launch IT infrastructure projects necessary for the Day 1 /
“Chinese wall” (e.g. firewall implementation to secure sensitive
data)
- Tackle workstation-related Day 1 questions: which helpdesk number? Shared
servers?
- Set-up a support task force for securing post-closing incidents / problems /
requests
 Design, prepare and test basic connectivity between buyer and
seller
 Synchronize with the Sourcing stream (e.g. WAN provider
contract, helpdesk outsourcing, …)
 Prepare an IT policy to be used from Day1 on (do’s and don’ts
for the transition period)
 Define the scope of work
 Identify assets (detailed assets list in “additional content”
section)
 Assess first impacts on infrastructure, in terms of:
- Architecture
- Current standards
- Infrastructure software (e.g. monitoring solutions), hardware, and communications
inventory
- Production, test, and development environments
- Security of Information System and network
- Operational policies/procedures
• Problem Management
• Configuration Management
• Change Control
 Decide high level infrastructure integration/carve-out strategy
(Copy/Cut/Paste, “Chinese wall”)
 Define the governance for Day 1 (buyer IT staff vs. seller IT staff)
Pre-Deal Evaluation
Securing the Deal
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 2DAY 1

2.1 Infrastructure
Zoom on Phase 3
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1 DAY 2
 Execute infrastructure transformation plan according to the SPA (Service Purchase Agreement) and the strategy decided in phase 2
- Telephone networks (i.e. landlines and ToIP)
- Data networks (i.e. WAN / MAN / LAN) & Firewalls
- E-mail systems (e.g. email routing, domain, signatures, directory, calendar sharing, instant messaging)
- Document systems (i.e. SharePoint or shared workspace)
- Videoconferencing
- Hardware/software infrastructure sizing
- Supplier contract renegotiation: Start with major infrastructure topics (i.e. WAN provider, computer manufacturers, Microsoft, email provider, database
provider, antivirus provider, …)
- Help desk support
 Define the Data Centre integration/carve-out strategy (high level and with the application stream)
- Define global Hosting strategy (political and financial decision)
- Refine global strategy in terms of sizing by integrating application scenarios: Make sure that feasibility and delays are consistent
 Plan integration / separation phase
Pre-Deal Evaluation
Securing the Deal

2.1 Infrastructure
Zoom on Phase 4

2.1 Infrastructure
 Timing:
- Assessment and strategy are usually defined during phase 2 and executed during phase 3 and 4. Sometimes (often in
acquisitions), you have no access to the target and IT Strategy starts in phase 3
- Defer all noncritical IT work (from phase 3 to phase 4)  example: stop all projects (business as usual) and focus on Separation /
Integration
- Decide early on IT integration strategy
- WAN + security more critical than LAN
 Governance and Process:
- Define clear roles and responsibilities of IT staff, especially if the regional infrastructure is managed locally
 Others:
- Do not mis-undertake the design and preparation phase of the inventory of infrastructure asset. If it is a worldwide inventory,
preferable to have a data base and to involve the regions in the design phase will make them embrace this action more easily
- Assess the dependencies (within the infrastructure and with other streams) of the infrastructure that will be kept
- Link with Sourcing for licenses, outsourcing deals, etc.
- Implement a check list to communicate with application stream all along its strategy definition. This will facilitate sizing and capacity
planning

2.1 Infrastructure
In case of buying…
Finance &
Accounting
Treasury Marketing
& Comm
IS/IT IS/IT
project
team
Legal Fiscal HR Real Estate Purchasing Quality Logistics
Define the scope of
work
C R A C C C C
Identify Assets I R A I I
Asses first impacts R A
Decide high level
integration strategy
R A
Define governance
for Day1
I R A I
Prepare actions &
planning for Day 1
I R A
Prepare IT policy C R A
Execute
transformation plan
I R A C
Identify synergies R R A R

2.1 Infrastructure
In case of selling…
Finance &
Accounting
Treasury Marketing
& Comm
IS/IT IS/IT
project
team
Legal Fiscal HR Real Estate Purchasing Quality Logistics
Define the scope of
work
C R A C C C C
Identify Assets I A / R R I I
Asses first impacts A / R R
Decide high level
separation strategy
A / R R
Define governance
for Day 1
I R A I
Prepare actions &
planning for Day 1
I R A
Prepare IT policy C R A
Execute separation
plan
I A / R R C

2.1 Infrastructure
Detailed assets list
 Network and System Management
- NetworkArchitecture (TCP/IP, ISX, X.25, NFS, …)
- Network operating System (IBM, Novell NetWare,
Windows NT, …)
- WAN (bridges, routers, gateways, switches, multiplexers,
ISDN, …)
- Network Management Systems (SNMP, HP Openview,
Microsoft SMS, …)
- Lines inventory (MPLS, … =
 Workshop / Facilities equipment
- Machine tools, equipment, storage kit with onboard
computing, licenses, etc.
- Local servers & networking kit
Please refer to template 1 “Exhaustive Infrastructure and
network inventory” for detailed infrastructure asset
assessment
 Data Centres
- Locations
- Environmental (security, power, …)
- Computer equipments
- Standards
- Equipment inventory
• Server technology and server functionality
• Mini Computer / Advanced Platform
• Mainframe
• Storage devices (SAN, NAS, File Servers, …)
• Backup devices (autoloader, …)
 User workstation
- Vendor, model, operating system
- Number installed, number of remote users, number
planned
- Refresh rate
Detailed assets list

2.1 Infrastructure
Zoom on accessibility operations to lead (1 of 2)
Step 0
Security
Rules
 Define security policy and principles
 Classify infrastructure & information assets and related risks using Availability / Integrity / Confidentiality / Proof criteria
 This step is key to define a working baseline between both companies
 Setup a link between you and Company A networks (VPN, FW, DNS…) accordingly to security rules defined in step 0
 This step is key to get basic communication services
 Create company A internal and external users (subcontractors of company B using company A resources) as Buyer external users in Buyer‟s AD
 Create Buyer users and Buyer external users (subcontractors of Buyer) needing company A resources as external users in Company A directory
 This step is key to permitting authentication and getting access to Buyer and Company A resources with limited access
 Identity Access Management: Create company A users as Buyer internal users in Buyer AD (Depending on technologies used, this step
may require migration of company A on Active Directory that could be a large project on its own)
 Adapt directory management process
 This step is key to share common authentication and access rules to Buyer resources
 Prepare the migration
 Mailbox creation in Buyer mail system - account@Buyer.com is redirected to account@companyA.com
 Email domain migration - Setup SMTP routing between Buyer gateways and CompanyA mail system
 Setup Buyer gateways to become Ethernet service router for @companyA.com
 Mailbox migration:
 Prepare Buyer mail system to deal with @companyA.com aliases
 Move mailbox data from CompanyA mail system to Buyer one (using Quest or similar tool)
 Remove email redirection between Buyer and CompanyA
Step 3
Mailbox
Step 4
Network
Main steps to achieve when acquiring a company
Step 1
Inter-
connection
Step 2
Access
Management
B
B
B/S
B
S
B
B
B/S
B/S
 Adapt naming convention and plan – re-number IP addresses
 Study the opportunity of WAN migration according to suppliers / contracts assessment
B/S
B/S

2.1 Infrastructure
Zoom on accessibility operations to lead (2 of 2)
Step 1
Separation of
LAN
 The AS-IS situation before the carve-out is: one single network and infrastructure
 Logically separate the LAN using VLANS
 Ensure NDA where applicable to shared environments (temp)
 When networks are logically separated, users can safely access different networks
Step 2
Migration
Step 3
Logical
separation of
WAN
Step 3
Network
reconfiguration
Step 4
Finalization
 Install own email and Directory
 Migrate users, data, resources and clients information
 The migration is done either to a new infrastructure or to the buyer’s infrastructure if applicable
 Logically separate the WAN
 Implement a central carve-out firewall (CO-FW)
 This steps facilitates the physical carve-out
 Re-number IP addresses
 Replace the carve-out firewall (CO-FW) by dedicated partner connections
 Final physical separation of networks can be realized if all previous steps were successfully achieved
B/S
B/S
B/S
B/S
B/S
B/S
B/S
B/S
B/S
B/S
Main steps to achieve when carving-out a company

2.1 Infrastructure
Contingency factors / levers and synergy potentials
Contingency factors / levers and synergy potentials
 Contingency factors and dimensions of an IT integration strategy
- Number of data centres
- Geographic distance of data centres
- Free capacity / utilization rate
- Heterogeneity of HW / SW platforms
 Focus areas, levers and synergy potentials of IT PMI
- Integration and Standardization of LAN / WAN access
- Harmonization of access point technologies and SLAs
- Consolidation of data centres, optimization of work load
- Standardize end user hardware
- Removal of redundant kit / hardware
10 – 20%
(Operation and maintenance costs)

2.1 Infrastructure
 Acquisitions almost always have a cost-reduction
component, and IT almost always contributes through IT
infrastructure operation rationalization or consolidation
• Absorption model involves shutting down the target's IT
infrastructure and using, selling or discontinuing its
component pieces.
• Cost reduction in the stand-alone model is focused on
leveraging cost efficiencies using the acquirer's
contractual base (most –common is network and data
lines contracts).
• Best-of-Breed model has long planning cycle that
precludes significant infrastructure changes in the months
following closing the deal
Merger & Acquisition
 Data Centre and Network are critical and should be 100%
clear for Day 1
 Decide either a “Chinese wall” is to be implemented (i.e. the
carved-out business has to be isolated from the rest of the
company):
• Application access vs. data
• Helpdesk
 Note that is some cases, a common agreement between the
seller and the buyer can avoid a “Chinese wall” strategy
(e.g. each company keeps all critical data till the Closing)
Carve out

2.2 Application
Introduction to Application (1 of 6)
 All along the Strategy definition and the Execution phase, reinforce the coordination effort:
- Split in workgroups, each workstream dealing with a group of applications which is functionally consistent
- Quickly suggest to theApplication team a common language and framework for deliverables to ensure the consolidation
 Early communicate to Application team leaders the main stakes of the M&A so that they can understand impacts on their respective
IT scopes
 Strongly synchronizeApplications with Infrastructure teams since the global roadmap will mainly be driven by the Infrastructure
roadmap (scheduling, groupings, etc.)
 2 universes must quickly be dissociated since very different:
- ERP application (when existing): ERP budget sometimes represents 90% of the IT budget and top management must of course
focus on its strategy, also deeply linked with Legal Separation
- Other applications: where many strategies are defined
 Do keep in mind that Business requirements won‟t be the only priority 1 drivers: Legal separation is a heavy topic to early address
(inputs must quickly be asked to decline it on IT activities)
Main convictions on Applications

2.2 Application
Processes
Application is one of the 4 main layers
of the Information System…
Infrastructure
Applications
Services
… usually divided in domains / functions
Support functions Core Business operations
Data
Systems
&
Finance
(Treasury, Control & Consolidation, Bank
relationship, Expenses, etc.)
Communication
(Internet, Intranet, Extranet, PIS/ITures,
etc.)
Human Resources
(Recruitment, Competences, Reporting,
etc)
Sourcing
(Portals, Supplier contracts management,
etc.)
Others
Site Services (Visitor access to site,
building access security systems), Legal
(International laws, …)…
Which applications are critical to secure Business continuity?
How can M&A operation be turned into an opportunity to rationalize and optimize applications landscape ?
Business operations
(including PLM, CAD, CAM & CAE …)
ERP
Sales & Marketing
(CRM, client dtat base,etc.)
Introduction to Applications

2.2 Application
Application
strategy
(and Budget)
Application
Strategy
Accessibility Data Centre
Strategy Strategy
Roadmap Project Portfolio
definition launch
Infrastructure IS/IT Strategy Project
strategy
(and Budget) (Roadmap portfolio
and Budget)
 Stake1: Ensure Business continuity, through TSA implementation and with a particular
focus on high Business criticality applications:
 Stake2: Identify first synergies and rationalization opportunities that meet strategic
objectives for the merger / separation
 Stake3: Facilitate Roadmap definition
- Identify Application scenarios
- Identify applications grouping per priority level
- Understand overall application landscape and interfaces
1 2
 Link Appli. / Servers
 Link with Data Bases
 Batch identification
 Flows identification
 Data centre feasibility
and delays
 Shared platforms
2
1 Appli. to Infra.
Infra. to Appli.
DAY 1
Phase 2 Iterative approach: Separation then Integration

2.2 Application
From Business Processes...
 How are Business Processes impacted by the M&A operation ?
What are the target Business Processes ?
 How responsibilities within processes will be split between
companies after M&A deal ?
 What are the data needed on the processes / in the different
companies ?
Process map
... to application landscape
 What is the target application
landscape ?
 What is the application roadmap to
reach the target ?
 What is the appropriate scenario
for each application ?
Application landscape evolution is a long-lasting journey with complex Business and technical dependencies.
Rationalization last usually far after Day 1, where priority is set to Business continuity

2.2 Application
Introduction – Examples of separation scenarios
Application ScenariosKind of issue to
address
Criticality to
business
Do we need the service
after separation?
Application x
No separation
Separation
Scenarios
I
II
Which kind of issue
to separate?
What has to be
retrieved?
Data
Application x
Data
&
Function.
Sourcing
NA
Application x
Data
Belonging to
buyer
Abandonment
A
Conservation
C
A1
Un-installation
A2
Data-extraction
Sleeping
application
Pure
reassignment
Adapted
Reassignment
Sourcing
negotiation
A3
C1
C2
C3
The existing application will be reassigned to the
buyer company without any internal modification
The existing application will be reassigned to the buyer
company with internal modifications (function…)
The contract (ASP mode) will be renegotiated
with editor to keep the service
Target users don‟t need the application functionalities
or it will be replaced by a buyer existing application
Data will be extracted from the existing application
and thus prepare the integration projects
Database and GUI will be available for the buyer
companies to consult the historical data
This implies a clear vision on middle term target …

2.2 Application
Integration scenarios
Standardization
Best-of-Breed
Separate
continuation
If IS/IT solutions (systems, platforms, organizations)
are compatible, they can be combined to form a new
solution (best-of-breed)
BA
+ = A
B
Establish new solution
Both solutions are turned off and completely new solution is
selected and implemented
Instant single solution
Choice is made on which solution is kept and which is
turned off
B =A + B
BA + C=
Integration to single solution
Both solutions co-exist (but interface
e.g. through EAI)1
A B
Continuous multiple solution
Both solutions coexist without any
integration
A B
Reporting integration
Preservation with
centralized reporting
Useful temporary scenario as quick to implement
and enabling Business continuity
B
A
R
Introduction – Examples of Integration scenarios

2.2 Application

2.2 Application
Zoom on Phase 2
Scope
 Assess application (detail and usage collection)
 Scope applications to investigate (applications to split during carve-
out / divestiture)
 Realize application landscape and functional mapping, check
alignment with business process landscape
 Group applications in homogenous groups that can be managed
more easy (with global coordination of each group):
- By function (Finance, HR, Communication, etc.)
- Large programs (ERP, PLM, etc.)
- By Region
 Define adherences between groups (interfaces, dependencies, etc.)
to identify cross-group milestones
 Prioritize separation projects (with Business inputs)
 Integrate Infrastructure inputs (scope to separate)
 Make the licenses inventory (central and local) and the sanity check
(used vs. paid)
Strategy
 Define separation strategy involving strongly internal customers
and buyer: (detailed AS-IS description, constraints / orientations,
scenarios, final prioritization):
- 1. As-Is: Plan workshops to share applications description (functional
and technical) and analyze in detail As-IS situation / mapping with the
Buyer applications
- 2. To-Be: Get from the Buyer clear requirements on target application
landscape
- 3. Separation scenarios: Decide separation scenarios for each
application
- 4. Roadmap: Identify the priority level of each application (Legal
Separation, Business priority, etc.) and necessary groupings
Projects
 Projects For Day1:
- Launch and follow-up separation projects (incl. Business
process alignment, including Roles & Responsibilities,
Newco user access privileges reassessment)
- Application testing in NewCo environment
 Projects after Day1:
- TSA writing
 Define and validate associated Separation budget
Scope
 Identify high-level mapping of systems landscapes
 Capture high-level business architecture and IS/IT support
requirements
Strategy
 Determine Day 1 infrastructure and system setup
 Define IS/IT integration priorities
Projects
 Projects For Day1:
- Plan and prepare actions to secure access to
applications for Day 1 (strong link to infrastructure
connectivity)
Pre-Deal Evaluation
Securing the Deal
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1 DAY 2

2.2 Application
Zoom on Phase 3
Pre-Deal Evaluation
Securing the Deal
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1
Projects launched
 Secure end of master plan execution (out of TSA applications)
 Verify application separation (through app. Usage reports and
incident management)
 Provide application separation status to Procurement to ensure
commercial closure
 Look and feel applications to avoid using older name, mainly for
external communication (invoices, logos, domain names, etc)
Scope
 Assess application (detail and usage collection)
 Scope applications to investigate (redundant applications)
 Map IS/IT architectures and application landscape (AS-IS), check
alignment with business process landscape
 Group applications in homogenous groups that can be managed
more easy (with global coordination of each group):
- By function (Finance, HR, Communication, etc.)
- Large programs (ERP, PLM, etc.)
- By Region
 Define adherences between groups (interfaces, dependencies, etc.)
to identify cross-group milestones
 Prioritize integration projects (with Business inputs)
 Integrate Infrastructure inputs (new scope to integrate)
 Make the licenses inventory (central and local) and the sanity check
(used vs. paid)
Strategy
 Define integration strategy involving strongly both companies
(detailed AS-IS description, Constraints / orientations, Scenarios,
final prioritization) on most critical domains / functions:
- Plan workshops to share applications description (functional and
technical) and analyze in detail AS-IS situation
- Identify application synergies
- Decide integration target (scenarios for each application)
- Define integration roadmap (action plan): identify the Business priority of
each application and necessary groupings
 Define and validate associated Integration budget
Projects
 Secure data access enabling reporting
 Application testing in new environment
 Launch and follow-up priority integration projects
Strategy
 Define separation strategy for TSA applications (AS-IS, Constraints /
orientations, Scenarios, Application license approvals with Vendor)
 Realize detailed Roadmap for each separation project
New Projects
 Launch and follow-up separation projects
(e.g.: For applications under TSA management)
 Application testing in NewCo environment
Integration /
Separation
Execution DAY 2

2.2 Application
Zoom on Phase 4
Strategy
 Keep defining separation scenarios for applications under TSA
management (finalization)
 Adapt processes (mainly for the Buyer)
 Keep defining integration strategy involving strongly both companies
 Establish an Extended Enterprise solution where appropriate
 Define To-be application architecture (incl. interim setups)
 Define transition plan for application portfolio consolidation
 Realize detailed Roadmap for each application integration to establish
day 2 setup
 Converge to an integrated system – e.g.: Single database for shared
clients (“one face to the customer”)
 Set-up new common processes
Projects launched
 Follow-up separation projects execution (e.g.: For
applications under TSA management) ensuring
technical separation for Day 2
 Follow-up integration projects execution
New projects
 Launch and follow-up IS/IT Strategy projects
(for the Buyer)
 Launch and follow-up long-term optimization
projects (for the seller): Rationalization projects
 Implement interfaces for existing systems
 Harmonize licenses, leverage synergies
 Launch and follow-up long-term integration
projects: Harmonization / mutualisation projects
StrategyProjects launched New projects
Pre-Deal
Evaluation
Securing the Deal
StrategyReview
- Screening&
Selection
Ensure Business
Continuity
DAY 1
Execution
DAY 2

2.2 Application
 Timing:
- Early imply Business to define applications to focus on first (Business priorities)
- Early identify applications impacted by legal separation (Legal Separation calendar requested)
 Governance and Process:
- Define precise and clear process to determine scenario for each application (workshop, decision sheet, action plan, etc.):
• Be sure that this process is shared with all main stakeholders
• Fill-in decision sheet to keep in mind what has been decided: scenario for each separation/integration project
- Clarify roles and responsibilities in this process
• “Way of Working” business procedure and process realignment
• Example for carve-out / divestiture operation:
 Seller: present applications
 Buyer: ask questions to seller, decide, write requirements according to its target application landscape
 Carved-out company: execute separation actions in collaboration with the buyer
- Ensure good interface and communication with 2 other streams:
• Infrastructure for connectivity tests, messaging issues, inputs for scoping, etc.
• Sourcing: when few application are in-house development, whatever the chosen status, sourcing issues will have to be solved
 Others:
- Secure assignment of all applications in workgroups during the scoping phase
- Identify « Authentication » as a transversal issue (often linked to global security issues)
- Closely follow-up ERP workgroup since it usually represents 80% of the information system (costs, Infrastructure and capabilities)
- Involve application owners in key discussions to identify dependencies (between applications in a same workgroup, with other workgroups, with local
applications)
- Ensure “Enterprise Architecture” tool is up-to-date to make Applications and Infrastructure accurate inventories. This will help identifying all adherences
and interfaces for any change (cf Zoom on automated tool)

2.2 Application
Roles & Responsibilities (1 of 2)
In case of buying …
Finance &
Accounting
Treasury
Marketing
& Comm
IS/IT
IS/IT
project
team
Legal Operations HR
Real
Estate
Purchasing Quality Logistics
Identify Assets R A
Define scope of work R A/R
Asses first impacts R A/R C
Map appli. landscape R A C
Make licenses
inventory R A R
Prioritize project to be
launched R A/R C
Decide high level
integration strategy C C C R A/R C C C C C C
Define governance for
Day1 I I I I A/R R I I I I I I
Prepare actions &
planning for Day 1 C C C R A C C C C C C
Prepare IS/IT policy A/R C
Execute separation
plan C C C R A/R C C C C C C C

2.2 Application
Roles & Responsibilities (2 of 2)
In case of selling …
Finance &
Accounting
Treasury
Marketing
& Comm
IS/IT
IS/IT
project
team
Legal Operations HR
Real
Estate
Purchasing Quality Logistics
Identify Assets R A
Define scope of work R A/R
Asses first impacts R A/R C
Map appli. landscape R A C
Make licenses
inventory R A R
Prioritize project to be
launched R A/R C
Decide high level
integration strategy C C C R A/R C C C C
Define governance for
Day1 I I I I A/R I I I I I I I
Prepare actions &
planning for Day 1 R A
Prepare IS/IT policy A/R C
Execute separation
plan R A/R

2.2 Application
Zoom on Separation scenarios (1 of 2)
Definitions
Business criticality  Criticality for Business to secure continuity
Separation /
integration difficulty
 Capability to easily separate / integrate
(whatever the scenario):
- Technical complexity
- Legal constraints
- Large costs / resources required
Included in target
 Visibility on willing to integrate the
application in the target landscape
 Scope for decision making: data and / or
application
Time to implement
 Capability to separate / integrate around
Day1 (TSA decision making)
- At Day1 for high criticality
- Around Day1 for low criticality
Asset Matrix
Time to
implement
Business criticality
Separation / integration difficulty
Included
in target
High
Low
Low
High
? NoYes
Not
Not
Short ? Long
Key drivers to choose the appropriate separation / integration scenarios

2.2 Application
Zoom on Separation scenarios (2 of 2)
Separation scenarios
Time
Criticality
Difficulty
Target Time
Criticality
Difficulty
TargetTime
Criticality
Difficulty
Target Time
Criticality
Difficulty
Target Time
Criticality
Difficulty
Target Time
Criticality
Difficulty
Target
Un-installation
Pure / adapted
reassignment
Data Extraction
Sleeping
application
Sourcing
negotiation
TSA
(Temporary)
 Low business  High Business  Legal issues /  High business  Business criticality  Business criticality but
criticality and High criticality and needs criticality and low and application in complexity to transfer
complexity to target application  No visibility on complexity to ASP mode  Need of transition
transfer compliant with target use of transfer  Buy, Right-To-Use phase
 Service is not data format application but  Needed in any (RTU) or Novate  Right-To-Use (RTU)
needed anymore easy to extract case for target agreed with option if agreed with
application vendor vendor (TSA period)
Key drivers to choose the appropriate separation scenarios

2.2 Application
Zoom on Integration scenarios
Approach: IS/IT architecture analysis / design
Goals / overall benefits:
 Establish transparency and frame of reference for IS/IT application
portfolio analysis
 Identify potentials for consolidation, rationalization and
standardization of systems and data
 Prepare technical landscape for an effective and cost-efficient
outsourcing approach
1. Identify application landscape
macro-
requirements
2. Mapping of applications to
business processes
4. Plan transformation strategy 3. Derive future system landscape
Online platform applications Soft1w1arePr1int
Portal in aAbleorxtingSyndicatio…n … …
Ba-ocfkfice applications Management
Basic technology
ITservicelayers
NetworkRemote2 accHeseslpd skPrint (OfficeT)elep1hony
E-mail Interne2t acceHsossting Fields rviceSec1urity
Financ BusinessHuman
etingRelationsAhcicpoun Logistics IntelligenRceesources
Customer
Management
Enterpriseframework
Content
SearchSin-sgilg-eonn E-learning Devel men…t
2
3
Delivery
Integration action plans per scenario
Standardization  Systems: Map coverage of business needs,
identify redundancies / gaps
 Data: Adjust data structure of legacy
systems, clean and migrate data
Best-of-Breed  Systems: Identify new requirements per
business function, establish integration
platform for new systems
 Data: Consolidate required data, integrate
data sources in one pool
Separate
continuation
 Systems: Identify requirements of new
processes, match solutions
 Data: Consolidate / pool existing data,
expand data model for new processes
Zoom on Integration action plans

2.2 Application
Zoom on automated tool (e.g.: Archibase)
 Transversal vision:
Business / IS
 Collaborative approach
 Web tool
 Re-use of existing data
and standard models
 Applications / Process /
Infrastructure maps
 Blueprints
 Flows (data, process,
application)
Consolidation &
Formalisation
 IS/IT Rationalization
 Roadmap modelling
 IS/IT cost optimization
 Impact analysis
 Strategic vision
Strategic analysisData Collection
Zoom on automated tool (e.g.: Archibase)
In very complex and changing environment of M&A operation, it is key to use
an automated tool to consolidate decentralized documentation and simulate changes
Example of Tool: Archibase
 A common database, structured to map IS/IT
architecture elements: Processes, services,
application, infrastructure, …
 A specific tool, simple, web-based built
 Archibase can dynamically customize the fields to
treat specific issue
 Multi-users: After a short training, each user can
edit and enrich themselves the database
 Traceability is ensured by an audit trail
 The tool has the ability to simulate the integration /
disposal of applications, to generate views by site /
country and to get reports and to extract data

2.2 Application
Zoom on lesson learned ERP
 Develop a clear understanding of differences in organizational structures and Business processes as it highly impacts the choice of the
solution
 Even if the established ERP software is the same in the merging companies, the degree of customization can make a new solution necessary
 Ensure accuracy and reliability of data/information
 Identify interdependencies with Business Operations systems, CRM and legacy systems
 Anticipate ERP evolution projects as ERP changes are mostly supported by external consultants (meaning RFP, additional costs…)
 Ensure the completeness of risks to achieve a stable solution by establishing a special risk management (including technical experts)
 Anticipate license costs variations in a merger or separation, as the pricing model depends on the number of users
 Do not underestimate implementation and customization of software and user training as they are expensive but key to get users on board
quickly and successfully
Zoom on lesson learned ERP

2.2 Application
 Difficulties to access to the “bought” As-Is before day1 whereas it
is necessary to define the integration strategy
 Major solutions / scenarios to simplify redundant applications are:
- Standardization
- Best-of-Breed
- Separate continuation
 Synergies are mainly found through standardization and
consolidation:
- Integration / harmonization of ERP systems
- Consolidation of operating, mail, database systems
- Integration of master data
Merger & Acquisition
 Major solutions / scenarios to separate shared applications are:
- Re-hosting: transfer of application and data
- Data extraction
- Sourcing issues (for ASP applications)
- TSA (Transition Service Agreement)
 Ensure separation costs guidelines are clear and shared between
all actors to secure cost repartition for each action due the
separation
Carve out & Divestiture

2.3 Sourcing
Introduction (1 of 2)
The framework on Sourcing activities … … leads to 3 streams
The contract enrolment consists in making new scope acquired countries / companies benefit from existing conditions, and
renegotiate those contracts in the long run
Contract enrolment / Savings
 Take advantage of better conditions (acquired company)
 Negotiate with suppliers to extend conditions to whole group
 In case of carve out, possible increase of unit costs and/or penalties when
breach of contract
Contract Management
 Ensure all IS/IT contracts are known/available for TSA purposes and
business continuity reasons
 Clarify parties of the contract in case of carve out
 Work in collaboration with Legal department / lawyers to secure contract
analysis
Licenses / Intellectual Properties
 How to ensure Licenses and IP from acquired companies will be
correctly listed (impact on assets lists, costs, etc)?
 How to split Licenses and IP in case of carve out?
 How to value IP and maintenance costs (e.g. in-house development
costs)?
Contract
Management
IS/IT Suppliers
Contract
enrolment /
savings
Licenses /
IP / Export
control
IS/IT Department

2.3 Sourcing
Introduction (2 of 2)
- Desktops, laptops and servers
- Printers
- Firewalls, network infrastructures, phones, Telco's equipment
 Software
- Microsoft
- Business Intelligence software
- Oracle licenses
- Antivirus software
- SAP …
 Services
- Web services
- Audio conference services
- Printing services
- Helpdesk services
- Outsourcing services
 Machine/Equipment software/hardware
- Maintenance
Zoom on Contract Enrolment
Negotiate
new
contracts/
conditions
with
suppliers
at IS/IT
level
Collect
contracts
(detailed
assess-
ment)
Inform
supplier
s of the
new
scope
Study redundancies between local and
corporate contracts
Receive the
steps to be
followed by
acquired
countries /
companies
Send
enrolment
steps to
acquired
countries /
companies
acquired
countries
/
compani
es sign
contracts
Define baseline on
the basis of IS/IT
contracts  A proper business case will allow to
assess precisely savings associated
to contract enrolment
Zoom on Contract types
The duration, deadline and sequence of these steps may change with suppliers requirements and countries specifics

2.3 Sourcing

2.3 Sourcing
Zoom on Phase 2
Pre-Deal Evaluation
Securing the Deal
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1 DAY 2
 List all IS/IT contracts (Hardware, software, IS/IT Services) with IT external suppliers and all agreements
 List as soon as possible IS/IT contracts of acquired company
 Identity Clearly parties involved in those contracts and all related information
 Prepare strategy to split contract when carve out
 Manage contract issues very closed to TSA issue as Transitional services are delivered in a contractual mode
 Anticipate contract termination dates in case of carve-out
 Work in collaboration with Legal department / lawyers to secure contract analysis
 Assess number of licenses in all areas of IS/IT (and associated types of license)
 Assess Intellectual Properties assets: Internet Domain name (owned by all acquired legal structures), licenses, etc.
 Value own in-house application development in case of separation needed
 Prepare split strategy for licenses when carve-out: how much? Which price?
Contract
Management
Licenses/IP

2.3 Sourcing
Zoom on Phase 3
Pre-Deal Evaluation
Securing the Deal
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1 DAY 2
 List as soon as possible IS/IT contracts of acquired company with detailed related information
 Inform suppliers and get approval for the new scope in the very first weeks
 Investigate possible dispute with suppliers (or black listed)
 Define baseline on the basis of IS/IT contracts
 Send contracts enrolment steps to acquired countries / companies
 Build a business case with right assumptions to assess potential savings due to contract enrolment
 Acquired countries / companies sign contracts
 Use best prices and take advantage of volume effect
 Transfer source code when agreed between 2 companies after carve out took place
 Finalize all on-going work with Legal department / Lawyers / Finance (TSA, contract split, licenses split and in-house
development costs valorisation, licenses depreciation)
 Complete agreed license innovations
Contract
enrolment
Contract
Management
Licenses/IP

2.3 Sourcing
Zoom on Phase 4
Pre-Deal Evaluation
Securing the Deal
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1
Execution
DAY 2
 Anticipate end of TSAs
 Renegotiate new contracts conditions with suppliers at IS/IT level due to scope expansion at termination date
 Close access to owned licenses under Right-To-Use (RTU) agreements, linked to TSA‟s
Contract
enrolment
Contract
Management
Licenses/IP
Most of Sourcing / Contracts / IP / Licenses issues have to be solved before phase 4

2.3 Sourcing
Golden Rules
Golden rules
 It is key to assess / scan very quickly all contracts and their associated termination dates, not only for acquired company but also
within IS/IT; it will strongly impact strategy/decisions to be taken during phase 3: Renewal, change, merge, breach of contract
 Suppliers contract, Licenses and IP issue must definitely be managed in collaboration with Legal / Finance department and often
external Lawyers to secure business continuity (avoid breach of contracts)
 Don’t forget / underestimate exit penalties: It must be considered carefully to avoid tremendous additional integration / separation
costs
 When you are the buyer, take the lead on this Sourcing / IP / Contract stream to avoid delay/loss of time. Energize this stream with
regular meeting (weekly) to ensure most of issues are managed during phase 2 and finalized during phase 3. Don’t forget to involve
Software provider in discussions (e.g. costs associated to licenses transfer to be paid to SW provider)
 Investigate possible dispute with suppliers (or black listed)
 In case of acquisition, the issue on sourcing topic is savings and improvement (how to save money, how to reduce and optimize
contract portfolio)
 In case of carve-out / separation, it is crucial to anticipate during phase 2:
- How to value Intellectual Properties (e.g. in-house software development)
- How to split a contract between various parties?
- How to transfer licenses (number and cession price)? Some licenses cannot be transferred

2.3 Sourcing
* When acquiring a company
** Depending on contract
IS/IT Top
management
IS/IT project team IS/IT Finance Corporate Legal Local Legal*
Assess list of IS/IT contracts (for IS/IT and acquired company) I RA C C
Prepare IS/IT contract split strategy for carve-out A R R
Inform suppliers A R I
Define baseline for IS/IT R RA R
Build a business case R RA R
Sign contracts R A** A**
Value Intellectual Properties C R R A
Prepare split strategy for licenses C R R A

2.3 Sourcing
Additional content
Volume 1
Before acquisition After acquisition
UnitPriceClassA
100
UnitPriceClassB
80
UnitPriceClassC
70
Volume 2
1000 units
1500 units
2000 units
Volume 1
Unit Price: 100 Unit price: 80
E.g. Microsoft contracts
Situation is the opposite for Carve-out when reducing the scope of licenses
with a risk to increase license unit price

2.3 Sourcing
Merger & Acquisition Carve out
Depending on acquisition type
Absorption
 Acquired organization is completely absorbed by the
acquirer. Acquirer's rules / processes dominates and
the acquired organization must adopt them
 This kind of M&A operation will promote contract
enrolment and definitely deliver associated savings
 Usually the buyer becomes the owner of all licenses
and contract / IP
Stand-alone
 Acquired organization remains independent
 Most of areas kept autonomy; identify some areas for
mutualisation and rationalization
 Some contracts can be merged; some volume effects
can deliver savings
Merger of
equals
 Best-of-breed organization is developed from both
parties
 Assess all contracts and the best ones are selected and
integrated into a new set of contracts to serve the new
business model
 Risk identified: Who is the owner of contracts and
Intellectual properties?
Depending on separation type
Carve out  Creates a new subsidiary while retaining control.
Transaction creates separate legal entities
 Start activities during phase 2; finalize during phase 3.
Risk is low as assets still remain in same group
Demerger  Corporate strategy to sell off subsidiaries or divisions of
a company
 Most of activities must be prepared during phase 2
 Intellectual Properties, Licenses and IS/IT assets
valuation are usually used in final company price
 Ensure IS/IT Contracts / IP issues won‟t be deal
breaker

2.4 Projects Portfolio
Introduction to Projects Portfolio (1 of 2)
Introduction to Projects Portfolio
 Depending on the depth of
integration / separation, free up to
~50% of overall development
capacity for IT-M&A operation
 Cut down legacy maintenance to
legal and operational minimum
 Minimize enhancement activity and
focus on future platform
 Keep high impact business
functionality/projects going
 Reposition new projects as
joint projects
Major new business functionalities
Enhancements
Legacy
maintenance
Legacy main-
tenance
M&A activities
Enhancements
Major
new business
functionalities
IT-projects portfolio
before M&A operation
Fast, focused reassessment
of IT projects portfolio
IT-projects portfolio
during M&A operation

Introduction to Projects Portfolio (2 of 2)
Introduction to Projects Portfolio
Prioritization of projects must be performed to free resources and assign them to new IT projects
related to M&A operation
+ ++ +++
Accessibility
(Business + IT project feasibility)
******
Stake value
(contribution to
Business
Strategic
Program)
Project Status
Business Priority
ongoing
Pre-study
Demand
Priority 2 Priority 1 Mandatory
Model 1: Stake value vs. accessibility Model 2: Project status vs. Business priority
selected
projects
******
% regarding
number of
projects
******
Prioritization matrix enabling
projects freeze
Whatever prioritization criteria are, a portfolio prioritization model is to be defined and shared with all stakeholders to ensure
alignment and common understanding of portfolio prioritization
% % %
% % %
% % %
€ € €
€ € €
€ € €

2.4 Projects Portfolio Zoom on Phase 2
Pre-Deal Evaluation
Securing the Deal
Integration /
Separation
Execution
Strategy Review
- Screening &
Selection
Ensure Business
Continuity
DAY 1 DAY 2
 Assess consolidated IT projects portfolio
- Ensure that IT projects portfolio is up-to-date, in particular in terms of remaining
workload and milestones
- Collect all local projects portfolio if portfolio is not managed centrally
- Detail projects interdependencies that can impact prioritization
- Ensure projects classification is adapted to a review with Business stakeholders
(e.g.: Regulation / Legal - Adapt to new technology - IT rationalization - Improve
business productivity - Adapt existing business - Develop new business - M&A related)
 Identify new IT projects related to M&A operation
- Identify all new projects related to M&A (Day 1 and Day 2)
- Ensure all those new projects are detailed enough (project plan, B-case,
interdependencies or prerequisite from other projects, planning, budget, required
competencies…)
- Check completeness of projects to be prioritized by reviewing gaps between As-Is and
To Be processes
 Assess projects capabilities in terms of resources (capacity plan)
- Identify the overall project capability and key competencies / experts that usually
represent bottleneck in capacity plan
- According to the needs of new IT M&A-related projects, define project capabilities to be
freed from other projects
 Make projects prioritization to fit with projects capability
- Define prioritization model (criteria, scale) and make it validated by major stakeholders
involved in the portfolio review process
- Organize prioritization workshops jointly with IT and the Business: Reassess projects
portfolio by business-driven project prioritization (cancel / postpone)
- Ensure some projects providing quick wins are set with high priority
- List all impacts of freezing projects and review it with the Business
- Make new projects portfolio validated with the Business through appropriate projects
portfolio committees
- Ensure Projects Portfolio Management tool is updated accordingly
 Freeze projects with low priority
- Stop enhancements on old applications that are soon to be replaced. This avoids
double cost of reimpacting those features later in the IT target and limits workload on
old and possibly complex architectures, where skills may also become rare and
expensive
- Upgrade software when you really need it and not as soon as the upgrade is available
or suggested by the vendor. Do a B-Case to take into account all impacts and costs in
the M&A context
 Launch M&A projects that can be anticipated before Day 1
- Set appropriate governance for those new projects where stakeholders may be
different as usual IT projects

Zoom on Phase 3 and 4
Strategy Review Pre-Deal Evaluation- Screening & Securing the Deal
Selection DAY 1
Phase 3
• Update of the projects portfolio according to Day 1 project progress
review (milestones, costs, resources) and ensure appropriate reporting to
the Business and to M&A stakeholders
• Finalize projects plans that can not be anticipated before Day 1 and
launch them
• Carve-out:
- Manage dashboard and interdependencies between projects
- After appropriate transfer, remove projects of the carved-out company from the
projects portfolio. Get TSA closure sign-off
• Merge & Acquisition:
- Organize workshops with other company to get common understanding on
projects portfolio from each other
- Assess short term project mutualisation opportunities in collaboration with
other IT streams
- Reposition new projects as joint projects and ensure projects costs are split
according to shared and validated rules
Ensure Business Integration /
Continuity Separation
Execution DAY 2
Phase 4
• Launch projects for Day 2
- Set appropriate governance for those new projects where stakeholders may be
different as usual IT projects
• Merge & Acquisition:
- Define the scope of common Projects Portfolio management and the area where
specificities remain (if needed)
- Review the process and adapt the governance with stakeholders from different
companies
- Set a common team and deploy common tools to manage Projects Portfolio
- Set appropriate interfaces with remaining specific processes and tools (if needed)
- Progressively unfreeze non M&A-related projects according to the priorities set with
the Business and promote joint project team

 Keep only the projects which are vital for the business needs in order to focus all efforts on M&A operation
- Ruthlessly cut existing project portfolio to free up resources for merger
- Minimize enhancement activity and focus on future platform
 Ensure portfolio prioritization model and rules are shared with the Business and across IT departments
- Define a portfolio prioritization model used to compare very different and specific projects: Criteria have to be simple and valid for
most projects
 Reinforce project review discipline
- Ensure project reviews happen and check all required criteria, any project out of control is suspended and spending out of project
governance rules is prohibited
- Establish formal project governance and launch procedures. Each project must have a positive business case at gate reviews in
order to be continued. This cuts spending in projects delivering little value and in projects who would have failed later on
 Adapt Projects Portfolio Management process to put M&A projects under control
- Reprioritize projects portfolio with iterative review of merger tasks across Business units instead of following annual Business unit
portfolio process

Overall program
leadership
IT top
management
IT project team
IT resource
management
service
IT entities Business
Assess consolidated IT projects portfolio R A C C
Identify new IT projects related to M&A operation A C R C
Assess projects capabilities in terms of resources (capacity
plan)
C A R R C
Make projects prioritization to fit with projects capability I R A R R R
Freeze projects with low priority A R R R R
Launch M&A projects for Day 1 I C A R R R
Share a common understanding of projects portfolio of the
different companies (specific to M&A operation)
I A C C C
Review the projects portfolio management process / tools /
team and adapt the governance
C R A I I
Progressively unfreeze non M&A-related projects according
to the priorities set with the Business and promote joint
project team
A R R R R
Prepare launch of Day 2 projects I A R R R

Zoom on portfolio prioritization model
Stake value (contribution to Business Strategic Program)
* ** ***
Contributes moderately to a strategic program
(with possibilities for the Business to overcome the
difficulties if project is not achieved)
Contributes consistently to a strategic program
but is not mandatory
(strong impacts for the Business if project is not
achieved & replacement solution to be studied ?)
Prerequisite / Mandatory to achieve strategic
program objectives
Accessibility (Project feasibility)
+ ++
Business
0 or 1 business feasibility parameters
listed below are easy to get
Business feasibility parameters are:
2 or 3 business feasibility parameters
listed below are easy to get
 Business sponsorship
 Business motivation
 Business availability (vision, requirements,
solution acceptance)
IS
0 or 1 IS feasibility parameters listed
below are easy to get
IS feasibility parameters are:
2 or 3 IS feasibility parameters listed
below are easy to get
 IS workload capacity
 IS skills / expertise
Zoom on portfolio prioritization model: Possible scale

2.5 Financials
Introduction to financials (1 of 4)
Costs and synergies are usually managed and followed-up by the Global M&A program management (including processes,
tools, schedule, etc.), with IT department contributing to identify, calculate and follow-up synergies in IT scope
Note: financials stream does not include computation of target value
Merger / acquisition
Time
Financials stream objective is to provide guidelines to:
 Identify and calculate integration costs due to M&A operation
 Identify and calculate synergies that are one of M&A operation ultimate goals
 Implement actions ensuring that savings are realized
Financial stream objective is to provide guidelines to:
 Identify and calculate separation costs due to carve-out operation
 Identify and calculate IT budget decrease due to reduced operational scope
(no savings in a carve-out operation)
 Implement actions ensuring IT budget decrease is real after TSA termination
Budget decrease
Company A-B
Company A
Company A
Separation costs
IT
Budget
Time
Theoretical Company A-BCompany B
Stand alone A + B
Integrated A + B
Synergies
Integration costs
IT
Budget
Carve-out
A
B
A-B
B
Introduction to Financials

2.5 Financials
Example of cumulated costs / synergy profile
Introduction to Financials – Merger & Acquisition
Costs Synergies Net cumulated
synergies
Phase 2 Phase 3
Costs to Quick wins
launch synergies
integration and
long-term
synergies
costs
Phase 4
Progressive realization of synergies
ITBenefits
Timeline
Synergies are mostly
recurring, with
a progressive ramp-up
Costs are mostly one-time,
with during the first steps of
the integration
Costs to achieve the M&A operation Cost aiming at achieving synergies
 Integration project costs (interconnexion  Contract penalties
 Redundancy packages
 Data centre consolidation project
SynergiesprofileCostsprofile
Timeline
IT cumulated
Costs
of applications, common directory…)
 TSA costs
 Advisory
Fast cost savings with focus purely on
quick hits with large initial impact
 Investment avoidance (e.g. cancellation
of projects)
 Asset divestment (e.g. sale of servers)
Long-term, recurring synergies capitalizing
on best-of-both-worlds cost structures and
economies of scale
 Data centre consolidation
 Mutualisation of applications
 Contract re-negotiation
 Employees redundancy
Timeline
IT cumulated
Synergies

2.5 Financials
TSA opportunityExample of IT budget profile
ITbudget
Timeline
Phase 2
Pre-deal
Phase 3
Post deal with
separation costs
and TSA covering
activities for
Company B
Carve-out
completed
Covered
by TSA
Phase 4
Rationalization of
fixed costs
IT budget
decrease
Covered
by TSA
Termination of TSA must be anticipated as much as possible
to reduce related expenses
Planned termination
of services
Timeline
ITbudget
Anticipated termination
of services
TSA cost on theorical TSA termination plan
TSA cost on real TSA termination plan
Quick wins on TSA
due to early
termination of services
 Economic model must integrate deal specificity
(e.g.. Size, transferred assets, deal governance, …)
 Secure the rules to invoice separation costs to each target company are
clearly defines
There are no synergies in a carve-out operation but an IT budget decrease due to:
 A reduced scope of operations
 Savings related to the rationalization of fixed costs after operation
Separation
costs
Variable
costs
Company A
Fixed
costs
Variable
costs
Company B
Fixed
costs
Introduction to Financials – Carve-out

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