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In M&A projects, involving a CIO or other key IT staff in the ex-ante due- diligence process aligns with successful IT integration.

This hypothesis raises the question; did the company have a CIO? Of the 17 companies, 12, or 70.6%, had a CIO at the time of the merger. Of those, 10, 58.8%, stated the CIO was involved in due diligence. Although the success rate is mentioned above, of 17 transactions, only six were completed on time. Of the 11 that were delayed in meeting objectives, only two (22.2%) stated that the obstacle was IT. However, more in-depth questions revealed that although these individuals did not believe IT was an obstacle in not meeting M&A objectives, 10 (83.3%) believed strongly that IT was the cause of the delay in meeting objectives, a delay of up to 8 months. Of those, six (60.0%) responded that the delay was due to integration planning and four (40.0%) to misalignment. All participants held managerial or executive-level positions, yet 17.6% (3) of them were not notified about the merger until after the acquisition transaction took place. The vast majority were involved in premerger planning, so they were notified early in the process (see Figures 9 and 10). 4.3.5 Hypothesis 2: Retention of Key Staff

In M&A projects, retaining key IT staff aligns with successful technology integration by targeted objectives.

The perceived importance of IT in an organization was discussed above. One key factor was the retention of employees and IT staff. Figures 11–13 partition the retention of IT staff, benefits offered, and how many accepted them.

Figure 9: How executives were notified about the merger.

Figure 10: Timeline for merger planning.

Figure 12: Count of those offered incentives.

Figure 13: Count of those accepting benefits.

Of the companies involved, 70.6% (12) stated their IT staff stayed through integration, and of the five companies whose IT staff did not stay through integration, all five completed knowledge and skills transfers prior to employees leaving; companies used documentation to fill the gap in six of the organizations. However, five companies said IT staff leaving delayed or set back the integration process between 2 and 4 months. Seven companies responded affirmatively information or skills were missing.

Three company representatives stated that information was missing and three stated that skills were missing. Six said nothing was missing, and 42.9% each (3 each) took steps to prevent a repeat occurrence, either retaining key staff or obtaining third- party help.

4.4 Case Study2

The case study examined one of the large information and communications technology corporations in the world, based in Saudi Arabia with locations around the world. The company underwent a series of mergers and acquisitions from 2007 through 2013, continuing through today. The company is ever-changing, expanding markets and product lines as it swallows up competition while joining forces with similar companies in other markets. The company began as a telecom company but has grown and expanded its services, now offering a much wider range of technological services. This research included interviews with three company executives from the acquiring or predator company and two executives from the acquired or target organization, the quarter- and year-end financial statements provided by the company to the public, and published articles in the public forum. The company also acquired a variety of share percentages in similar companies in other global markets to reach a wider client base. All numbers in the financial statements are in thousands unless specified and as the company home base is located in Saudi Arabia, the figures are in Saudi Riyals. The company’s stated goals, taken from their annual report, as well as the current company status, are summed in the following statement:

[The Company] has worked with the highest determination, through the transformation process very much like a journey. With the aim to drastically transform the capabilities of the Company’s human resources and consequently improve the quality of the way of thinking and working, and the culture prevalent in the Company. This has a positive effect on the work system and the financial and institutional performance and promises a better future.

Details on the company’s activity are outlined in the sections that follow. When interviewing company employees, interviews centered on the impact of IT on M&As.

2 _{As the case study is anonymous, the sources of information are classified; however, they are both}

Participant I stated, “IT and technology is very important in the telecom M&A. … We are talking big amounts. So, the potential of these investments depends heavily on the sustainability of … technology.” The participant emphasized that in the telecom industry, it was absolutely vital to know the status of the target company’s technology to ascertain if it is obsolete, current, needs upgrading or replacing, or if it brings anything to the negotiations. These interviews tied closely with the increase in company size, a feat accomplished through mergers, acquisitions, buyouts, and purchased percentages of other companies to gain ownership benefits.