Identifying Benchmarks

The merger and acquisition process always includes a a pre-phase in which the ultimate decision is made: to go forward or not. Successful conduct of this phase is vital to assess the accurate value of an acquisition, including value offered by technology integration. The prevailing view that IT is simply a necessary evil more often than not hampers this assessment.

It is essential to set IT benchmarks early in the acquisition process, for each company in the merger operation. Here are ten metrics that balance short and long term goals, practicality vs. sustainability and immediate performance with growth:

  1. Forward-looking productivity measures, for example finding the ratio of discretionary IT spending to IT headcount. For added precision, normalize for effective discretionary spending.
  2. Categorize discretionary spending by percentage among types, e.g. category models like Run | Grow | Transform or Infrastructure | Transactional | Informational. Review whether these reflect the current organizational agenda.
  3. Compute the number of bug fixes or enhancements requested for the top 25% of your systems. This provides a fast and rough estimate of functional and technical health.
  4. Average time required to close critical issues.
  5. Calculate the percentage of projects that utilize enterprise HW/SW standards. Boosting standardization helps make operations more efficient, less prone to need intervention.
  6. Determine whether training time meets actual training needs. Training is often overlooked, properly addressed it can reduce systemic burdens significantly.
  7. Projects in the SDLC pipeline and average time spent in each stage per project. This allows you to identify and resolve bottlenecks.
  8. If you have customers that utilize an online channel, you need a metric to effectively gauge involvement: number of views, average time spent, etc.
  9. Determine what percentage of your projects meet 100% of their planned objectives or scope. On-time and on-the-mark are two different concepts, of unequal value.
  10. Are your core applications available? This includes having a business continuity plan in place.