Keeping it Simple – Three Proven Strategies for Successful M&A Application Rationalization
Laura Kreofsky, VP, Advisory & Telehealth, Pivot Point Consulting
Application rationalization during M&A is like a newlywed couple with each person bringing their own stuff to the marriage. But nobody needs two toasters, two sets of pots and pans and two irons. Somebody’s dishes go in the cabinet, and somebody’s gets donated. It is how you arrive at those decisions that drive the success of the union.
The same is true in IT planning, specifically application rationalization, during M&A. By incorporating these three strategies, you can side-step big potholes and successfully navigate the change.
Stop and Start with Low Hanging Fruit
• For organizations engaging in M&A, particularly the site being acquired, there should be a freeze on any application purchases. Additionally, application renewals should be negotiated with favorable early cancellation clauses. For the acquiring entity, look closely at the application portfolio of the entity being acquired. It may provide an opportunity to negotiate favorable terms for broader licensing.
Find the Right Balance
• Change disrupts any organization; it is important to find the unique balance between getting to an optimized state quickly and moving too slowly, which adds cost and IT complexity. A measured approach that allows the organization to effectively address and manage change over time will yield long-term benefits.
Manage the Human Side
• Proactively managing change from application rationalization must include executive sponsorship and governance, broad communications and plans for managing resistance.
While this is an oversimplification of a very complex process, sometimes it is important to keep the strategy simple, focused and clear. Each entity has its own amalgam of information technology and software, and in most cases, there is a tremendously unnecessary and costly overlap. Application rationalization enables organizations to look at all their software products objectively and strategically, as well as consolidate and optimize the mix and lifecycle management for each.
Laura brings a wealth of expertise to her role leading Pivot Point Consulting’s Advisory practice. Over the past 27 years, she has led health IT planning, implementation and operations in the private and public sectors; working with and for academic medical centers, community hospitals, insurers, public health agencies and international clients. Her areas of focus include IT-enabled business strategy, IT operations and governance and industry regulations and reform. Additionally, she directs Pivot Point’s thought leadership, providing insight and guidance on health IT policy, emerging technologies and industry trends.
Laura serves on the Oregon Chapter of HIMSS Board of Directors and, in 2020, was recognized by Consulting magazine as a Woman Leader in Technology Consulting. She is a PMP and a certified professional in health information systems (CPHIMS). Laura received her BA from Ripon College and her MBA and MHA degrees from the University of Minnesota.
