Don’t Allow Software Licensing to Derail Your M&A
Be an advocate for exploring the legal entity structure of your new organization and how it relates to license agreements.
Book This Workshop
A reactive approach to software licensing contracts post-M&A leads to:
- Compliance risk, leading to shortfall payments and reducing synergy potential.
- Failing to ensure technology assets are thoroughly incorporated.
- Incomplete due diligence leading to potential for overpayment for acquisition.
- Risk of a software audit from a vendor leading to unanticipated costs during critical integration time period.
A proactive approach to software licensing contracts pre-M&A leads to:
- Ensuring a structured due diligence process to avoid surprises and confirming that licensing meets organizational requirements and needs.
- Identifying licensing redundancies to realize synergies from installed software and parallel systems.
- Easy assessment of license flexibility and scalability to understand how they will impact the organization in wake of the structural change.
- A detailed action plan for pre, during, and post-M&A activities. Your approach needs to be centralized, straightforward, and put into play quickly.
- The tools and strategies needed to communicate the plan and get buy-in from key stakeholders.
Book Your Workshop
Onsite Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn’t enough, we offer low-cost onsite delivery of our Project Workshops. We take you through every phase of your project and ensure that you have a road map in place to complete your project successfully.
Book NowModule 1: M&A Overview
The Purpose
- Identify the goals and objectives the business has for the M&A.
- Understand cultural and organizational structure challenges and red flags.
- Identify SAM/licensing challenges and red flags.
- Conduct maturity assessment.
- Clarify stakeholder responsibilities.
- Build and structure the M&A team.
Key Benefits Achieved
- The capabilities required to successfully examine software assets and licensing during the M&A transaction.
- M&A business goals and objectives identified.
- IT M&A team selected.
- Severity of SAM challenges and red flags examined.
| Activities: | Outputs: | |
|---|---|---|
| 1.1 | Document pain points from previous experience. |
|
| 1.2 | Identify IT opportunities during M&A. |
|
Module 2: Due Diligence
The Purpose
- Take a structured due diligence approach that properly evaluates the current state of the organization.
- Review M&A license inventory and use top five vendors as example sets.
- Identify data capture and reporting methods/tools.
- Scheduling challenges.
- Scope level of effort and priority list.
- Common M&A pressures (internal/external).
Key Benefits Achieved
- A clear understanding of the steps that are involved in the due diligence process.
- Recognition of the various areas from which information will need to be collected.
- Licensing pitfalls and compliance risks to be examined.
- Knowledge of terms and conditions that will limit ability in pre-integration planning.
| Activities: | Outputs: | |
|---|---|---|
| 2.1 | Identify IT capabilities for an M&A. |
|
| 2.2 | Create your due diligence team and assign accountability. |
|
| 2.3 | Use Info-Tech’s IT Due Diligence Report Template to track key elements. |
|
| 2.4 | Document assumptions to back up cost estimates and risk. |
|
Module 3: Pre-Integration Planning
The Purpose
- Review and map legal operating entity structure for the resultant organization.
- Examine impact on licensing scenarios for top five vendors.
- Identify alternative paths and solutions.
- Complete license impact for top five vendors.
- Brainstorm action plan to mitigate negative impacts.
- Discuss and explore the scalable process for second level agreements.
Key Benefits Achieved
- Identification of the ideal post-M&A application portfolio and licensing structures.
- Recognition of the key considerations when determining the appropriate combination of IT integration strategies.
- Design of vendor contracts for the resultant enterprise.
- Recognition of how to create an IT integration budget.
| Activities: | Outputs: | |
|---|---|---|
| 3.1 | Work with the senior management team to review how the new organization will operate. |
|
| 3.2 | Document the strategic goals and objectives of IT’s integration program. |
|
| 3.3 | Interview business leaders to understand how they envision their business units. |
|
| 3.4 | Perform internal SAM audit. |
|
| 3.5 | Create a library of all IT processes in the target organization as well as your own. |
|
| 3.6 | Examine staff using two dimensions: competency and capacity. |
|
| 3.7 | Design the end-state. |
|
| 3.8 | Communicate your detailed pre-integration roadmap with senior leadership and obtain sign-off. |
|
Module 4: Manage Post-M&A Activities
The Purpose
- Finalize path forward for top five vendors based on M&A license impact.
- Disclose findings and financial impact estimate to management.
- Determine methods for second level agreements to be managed.
- Provide listing of specific recommendations for top five list.
Key Benefits Achieved
- Initiatives generated and executed upon to achieve the technology end-state of each IT domain.
- Vendor audits avoided.
- Contracts amended and vendors spoken to.
- Communication with management on achievable synergies and quick wins.
| Activities: | Outputs: | |
|---|---|---|
| 4.1 | Identify initiatives necessary to realize the application end-state. |
|
| 4.2 | Identify initiatives necessary to realize the end-state of IT processes. |
|
| 4.3 | Identify initiatives necessary to realize the end-state of IT staffing. |
|
| 4.4 | Prioritize initiatives based on ease of implementation and overall business impact. |
|
| 4.5 | Manage vendor relations. |
|