Getting it right

8 steps to successful IT integrations in the power sector

Overview

As consolidation continues to occur in the power and utilities industry, careful consideration must be taken in order to execute successful acquisitions. Too many times, deals can fail – not because of a bad deal strategy – but because of poor planning and execution. As we first explored in A New M&A Strategy for Utilities, whether two companies merge or a utility acquires new assets, there are opportunities that require careful integration planning and focused implementation execution to fully realize long-term revenue and cost benefits.

For many utilities, IT integrations can prove to be a daunting task and may potentially limit the upside to the deal if there are significant planning and implementation resource constraints.

While there may be challenges, this does not mean that utilities cannot successfully complete an acquisition. As we explore in this report, there are several steps, lessons learned, and planning activities that can be followed to ensure success.

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Steps to consider before and after a deal

Choose the right integration partner

Acquisitions can be your single costliest undertaking. A partner that fully understands this and can guide you throughout the process and help to avoid common pitfalls.

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Rapidly assess and address resource constraints

If resources need to be hired or sourced, these conversations must be started as soon as possible, so ample time can be spent hiring and onboarding the resources.

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Collaborate with partners / vendors regarding lead time

For optimal success, connect with partners or vendors as soon as project requirements are known to ensure higher levels of engagement and a possibly smoother contracting process.

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Balance short-term manual process vs. desired future state

Clarity in near-term objectives (and cost) with long-term objectives (and cost) are important for companies to consider.

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Utilize the right governance model

A broad view of governance is required to successfully manage the integration process.

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Estimate and communicate IT implementation costs early and often

Early identification of IT costs-to-achieve eliminate financial surprises and help align leadership and other stakeholders around the roadmap and plan.

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Over-communicate and closely partner with key stakeholders

IT touches all functions. As a result, any technology decisions that are made impact a significant number of people and process within other business functions.

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Ensure holistic change leadership strategy is in place

Allowing enough time for stakeholder alignment and buy-in (not to mention training) is key to a successful transition.

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Earl Simpkins

Principal, Strategy& US

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