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Untangling Enterprise Systems for a Sudden Acquisition or Divestiture: Are You Prepared?

Untangling Enterprise Systems for a Sudden Acquisition or Divestiture: Are You Prepared?

As more companies announce mergers, acquisitions and divestitures to survive, the orderliness of their enterprise systems is critical: The "messier" a company's systems, the harder it will be to attract potential buyers. But the more up-to-date a company's systems, the more money they'll fetch.

In today's economic climate, once desperate business measures now appear plausible at any given time, inside any given company: a sudden bankruptcy, a hurried acquisition, a sale of a profitable division to free up cash.

The phrase, "Expect the unexpected" has taken on new significance during this recession.

Steve Berez, a Boston-based partner in Bain's global IT practice, says hasty mergers, acquisitions, divestitures, break-ups and bankruptcies are occurring more and more often, and not just in the embattled financial services industry.

Recently, GM abandoned Saturn to cut costs, Merck announced it would buy rival Schering-Plough, and GE is facing questions about keeping its finance and industrial units under the GE umbrella.

"Firm after firm is giving up what had been assumed as their crown jewel because they had no choice-for liquidity and capital purchases, they had to divest," Berez says.

CIOs and their IT departments must be prepared for the sudden and disruptive upheavals in their enterprise computing environments that stem from unexpected business transactions. Regardless of what side of the deal their company is on (whether they're the acquirer or the target), IT leaders need to ensure their company's systems are in proper working order, and they need to be part of the decision-making around the deal. Unwieldy systems may not be worth acquiring, says Berez, and could dramatically lower the value of the transaction.

And if your CEO knocks on your door tomorrow morning to tell you that the business is selling off a division next week or acquiring a competitor's assets, he's going to want to know if the IT systems can handle this type of abrupt transaction.

Well, can they?

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