IT-Merger and Acquistion-Buy-Playbook.pptx

Identify the key stakeholders involved in the IT merger and acquisition. Who are the individuals or teams that will be affected by or have a significant role in the process? This task is crucial for ensuring effective communication and decision-making throughout the merger. Understanding the stakeholders will help streamline the process and ensure that the right people are involved at each stage. Research the IT systems and infrastructure of the target company. Understand their current technologies, applications, networks, and hardware. This task is essential to assess the compatibility and complexity of integrating their IT systems with your organization's existing infrastructure. It will also help identify any potential risks or challenges that may arise during the integration process.Conduct a thorough IT due diligence assessment of the target company's IT systems, processes, and infrastructure. This includes reviewing their IT policies, cybersecurity measures, data protection practices, and compliance with regulatory requirements. The goal is to identify any potential risks or liabilities that may impact the merger and develop mitigation strategies.Analyze the compatibility and interoperability of your organization's IT systems with the target company's systems. Determine if there are any significant gaps or technical challenges that need to be addressed before integrating the systems. Assessing compatibility will help minimize disruptions during the merger and ensure a smooth transition for both organizations.

1. M&A Buy Playbook Use in conjunction with Mergers & Acquisitions: The Buy Blueprint to document and prepare for an acquisition.

2. Purpose of this playbook This playbook is intended to support IT executives as they move through a merger, acquisition, or divestiture transaction from the perspective of the buying or acquiring organization. Not all sections or components may be relevant for your IT organization. Additionally, some IT executives will already have the information readily on hand, while others will need to calculate or gather the information. Purpose Contents Proactive Phase Discovery & Strategy Phase Due Diligence & Preparation Phase Execution & Value Realization Phase

3. Proactive This phase is intended for IT executives on the forefront of digital transformation who need to actively look for and suggest opportunities to acquire or partner on new digital capabilities to respond to rapidly changing business needs.

4. FYXX Maturity Scorecard The misalignment in target state required further communication between the CIO and CEO to ensure IT is striving toward an agreed-upon direction. Transform Creates new industry Expand Extends into new business Generates revenue Optimize Increases efficiency Decreases costs Support Keeps business happy Keep costs low Struggle Does not embarrass Does not crash CIO Optimal CIO Actual CEO Actual CEO Optimal What is the CEO’s perspective of IT? Does this align with how IT perceives itself? Related to Activity 1.1.1 Replace and update with relevant information.

5. Stakeholder management is a critical aspect of running a successful IT department. IT’s most important and impactful metric to gauge our success is stakeholder satisfaction. Target Current Does this align with how IT perceives itself? What is the business’ perspective of IT? Related to Activity 1.1.2 Replace and update with relevant information.

6. M&A stakeholder map Legend Black arrows indicate the direction of professional influence Dashed green arrows indicate bidirectional, informal influence relationships CIO/IT Leader CEO Board Members M&A Team COO/HR CFO/Finance CTO Compliance CISO Audit Stakeholder List Related to Activity 1.1.3 Replace and update with relevant information.

7. Stakeholder power map Mediators Players Spectators Noisemakers High Low Low High Influence Ownership/Interest Related to Activity 1.1.4

8. Stakeholder Category Level of Support Supporter Evangelist Neutral Blocker Player Critical High High Critical Mediator Medium Low Low Medium Noisemaker High Medium Medium High Spectator Low Irrelevant Irrelevant Low Stakeholder Category Level of Support CMO Spectator Neutral CIO Player Supporter Critical stakeholders Related to Activity 1.1.5 Update with relevant information.

9. Stakeholder Role Direct/Indirect Influence Level of Influence Level of Interest Level of Support Communication Methods Communication Frequency CEO/President Direct Mediator Critical 1:1 Emails Weekly As Needed CFO Direct Player Critical Budget Meeting Monthly Board Indirect Noisemaker High Through CEO Biannually COO Direct Critical Player Low Director/VP of Specific Business Lines Indirect Moderate- and Low- Value Players Irrelevant Operational Teams Direct Moderate- and Low- Value Players Medium Stakeholder communication plan Related to Activity 1.1.6 Update with relevant information.

10. Data valuation When valuating the information and data that exists in an organization, there are many things to consider. Info-Tech has two tools that can support this process: Information Asset Audit Tool : Use this tool first to take inventory of the different information assets that exist in your organization. Data Valuation Tool : Once information assets have been accounted for, valuate the data that exists within those information assets. Instructions Using the Data Valuation Tool, start gathering information based on the eight steps above to understand your organization’s journey from data to value. Identify the data value spectrum. (For example: customer sales service, citizen licensing service, etc.) Fill out the columns for data sources, data collection, and data first. Capture data analysis and related information. Then capture the value in data. Create a data value chain for your organization Add value dimensions such as usage, quality, and economic dimensions. Remember that economic value is not the only dimension, and usage/quality has a significant impact on economic value. Collect evidence to justify your data valuation calculator (market research, internal metrics, etc.). Finally, calculate the value that has a direct correlation with underlying value metrics . Data Collection 01 Data Source 02 Data Collection Method 03 Data Insight Creation 04 Data Analysis 05 Insight 06 Insight Delivery Value Creation 07 Consumer 08 Value in Data Data Valuation 09 Value Dimension 10 Value Metrics Group 11 Value Metrics Data valuation is how you monetize the information that your organization owns. Related to Activity 1.2.1 Tab 2: Data Valuation Tool Leverage the Data Valuation Tool.

11. Application valuation User Costs Total User Costs Derived Productivity Ratio (DPR) Total DPR Application Value # of users % time spent using IT Fully burdened salary Multiply values from the 3 user costs columns Revenue per employee Average cost per employee ( Revenue P.E ) ÷ ( Average cost P.E ) ( User costs ) X ( DPR ) IT and Business Costs Total IT and Business Costs Net Value of Applications Application maintenance Downtime costs (include disaster exposure) Common costs allocated to applications Fully loaded costs of active (FTE) users Sum of values from the four IT and business costs columns ( Application value ) – ( IT and business costs ) Calculate the value of your IT applications Instructions Start by calculating user costs. This is the product of the # of users × % of time spent using IT × fully burdened salary . Identify the revenue per employee and divide that by the average cost per employee to calculate the derived productivity ratio (DPR). Once you have calculated the user costs and DPR , multiply those total values together to get the application value . When valuating the applications and their users in an organization, consider using a business process map. This shows how business is transacted in the company by identifying which IT applications support these processes and which business groups have access to them. Info-Tech has a business process mapping tool that can support this process: Enterprise Integration Process Mapping Tool : Complete this tool first to map the different business processes to the supporting applications in your organization. Once the total application value is established, calculate the combined IT and business costs of delivering that value. IT and business costs include inflexibility ( application maintenance ), unavailability ( downtime costs, including disaster exposure ), IT costs ( common costs statistically allocated to applications ), and fully loaded cost of active (full-time equivalent [FTE]) users . Calculate the net value of applications by subtracting the total IT and business costs from the total application value calculated in step 3. Source: CSO Related to Activity 1.2.1 Update with relevant information.

12. Item Costs/Value Hardware Assets Total Value +$3.2 million Hardware Leased/Service Agreement -$ Software Purchased +$ Software Leased/Service Agreement -$ Operational Tools Network Disaster Recovery Antivirus Data Centers Service Desk Other Licenses Total: Infrastructure valuation Assess the foundational elements of the business’ information technology The purpose of this exercise is to provide a high-level infrastructure valuation that will contribute to valuating your IT environment. Calculating the value of the infrastructure will require different methods depending on the environment. For example, a fully cloud-hosted organization will have different costs than a fully on-premises IT environment. Instructions Start by listing all of the infrastructure-related items that are relevant to your organization. Once you have finalized your items column, identify the total costs/value of each item. For example, total software costs would include servers and storage. Calculate the total cost/value of your IT infrastructure by adding all of values in the right column. For additional support, download the  M&A Runbook for Infrastructure and Operations. Related to Activity 1.2.1 Update with relevant information.

13. Risk and security Probability of Risk Occurrence Occurrence Criteria (Classification; Probability of Risk Event Within One Year) Negligible Very Unlikely; <20% Very Low Unlikely; 20 to 40% Low Possible; 40 to 60% Moderately Low Likely; 60 to 80% Moderate Almost Certain; >80% Financial & Reputational Impact Budgetary and Reputational Implications (Financial Impact; Reputational Impact) Negligible (<$10,000; Internal IT stakeholders aware of risk event occurrence) Very Low ($10,000 to $25,000; Business customers aware of risk event occurrence) Low ($25,000 to $50,000; Board of directors aware of risk event occurrence) Moderately Low ($50,000 to $100,000; External customers aware of risk event occurrence) Moderate (>$100,000; Media coverage or regulatory body aware of risk event occurrence) Note: If needed, you can customize this scale with the severity designations that you prefer. However, make sure you are always consistent with it when conducting a risk assessment. The purpose of this exercise is to provide a high-level risk assessment that will contribute to valuating your IT environment. For a more in-depth risk assessment, please refer to the Info-Tech tools below: Risk Register Tool Security M&A Due Diligence Tool Instructions Review the probability and impact scales below and ensure you have the appropriate criteria that align to your organization before you conduct a risk assessment. Identify the probability of occurrence and estimated financial impact for each risk category detail and fill out the table on the right. Customize the table as needed so it aligns to your organization. Assess risk responses and calculate residual risk Related to Activity 1.2.1 Risk Category Details Probability of Occurrence Estimated Financial Impact Estimated Severity (Probability X Impact) Capacity Planning Enterprise Architecture Externally Originated Attack Hardware Configuration Errors Hardware Performance Internally Originated Attack IT Staffing Project Scoping Software Implementation Errors Technology Evaluation and Selection Physical Threats Resource Threats Personnel Threats Technical Threats Total: Update with relevant information.

14. What is the IT organization worth in your business, and have you adequately communicated this worth to executive leaders? IT is in the process of modernizing its IT environment. As a result, both the underlying infrastructure and skill level of staff are outdated. Acquiring an organization that has already modernized could save the business time, effort, and financial costs in the long run. Additionally, the business would acquire employees that have already developed the skills needed to support a modern IT organization. Opportunities to Support Growth Strategy Infrastructure elements are currently in the process of modernization, making their value less than anticipated. Risks The IT organization of the business has seen incredible growth over the past five years. One of the most valuable elements of the IT organization is our data, which is currently valued at $XXX. Overall Comments About IT’s Value Cost & Market Valuation Applications Anticipated Growth of IT’s Value in the Next Three Years (Future Profitability) Infrastructure Risk & Security $0 $0 $0 $ Infrastructure Risk & Security Applications Data $0 Total Data Total Related to Activity 1.2.1 Valuation of IT Update with relevant information.

15. Business Goals Better Product & Services Than Anyone Unprecedented Customer Value Clear & Exciting Value Proposition Best Managed Company in the World Business Initiatives Build a World-Class Sales Team Sales to Grow Customer Accounts by 120% Land & Expand: Four Seats Per Account Field Rep Strategy: Increase Sales Capacity in the Field Increase Sales Technology Domain Expertise Create More Consumable Consulting Deliverables Industry Launch: Specialization, Segmentation & Product Senior Advisor & Consulting Support Domain Expansion: Product Roadmap Financial Planning: Funding Corporate Growth Business Capabilities Business Capabilities IT Capabilities Develop the Business Make Proposals Business Value Develop Service Offerings Enterprise Architecture Market Research & Analysis Data Quality Build an Effective Team Train Staff Performance Measurement Enhance Collaboration Knowledge Management Assess Staff Performance Leadership, Culture & Values Execute Engagements Deal With Contingencies Service Management Provide Client Updates Risk Management Formalize Changes Stakeholder Relations IT Initiatives Improve Data Quality Customer Engagement Reporting Deliver Core Reporting Account Industry Classification & Reporting Implement Learning Management System Implement HRIS Build Product Web Portals Improve Services Web Portal Multifactor Authentication Mobile Salesforce Deployment IT Goals Improve Data Quality by 20% Create a World-Class CX Team Raise End-User Satisfaction to 80% IT’s demonstrated support for business goals Achieved through Create or improve Create or improve Achieved through Support Legend Build an Effective Team Develop the Business Plan & Assign Resources Sell Engagements Manage Billing & Finances Execute Engagements Related to Activity 1.2.2 Replace and update with relevant information. Update legend with your industry value streams.

16. Opportunities and pain points Pain Points Opportunities Redundant technology Data sets that are expensive to maintain Lack of necessary skills in the workforce Moving from a period of stagnation to growth Business views IT as a Firefighter Grow the organization Sell components of the IT environment Embrace new data sets Leverage platforms more efficiently Provide IT capabilities that support the business goals and objectives Business views IT as an Innovator Related to Activity 1.3.1 Replace and update with relevant information.

17. 1a Goals Underlying Drivers Digital Opportunities Growth or Reduction Strategy Solution? What is the underlying driver for the goal? Was there a root cause problem that the goal is intended to alleviate? What digital opportunities could be leveraged that would address those underlying drivers? Indicate whether the digital opportunities could be obtained or addressed through a growth or reduction strategy or not. Goal # 1: Driver #1 Digital Opportunity #1 Growth/Reduction/None Driver #2 Digital Opportunity #2 Growth/Reduction/None Driver # 3 Digital Opportunity #3 Growth/Reduction/None Goal opportunity assessment Related to Activity 1.3.2 Update with relevant information.

18. 1a Goals Underlying Drivers Digital Opportunities Growth or Reduction Strategy Solution? What is the underlying driver for the goal? Was there a root cause problem that the goal is intended to alleviate? What digital opportunities could be leveraged that would address those underlying drivers? Indicate whether the digital opportunities could be obtained or addressed through a growth or reduction strategy or not. Goal # 2: Driver #1 Digital Opportunity #1 Growth/Reduction/None Driver #2 Digital Opportunity #2 Growth/Reduction/None Driver # 3 Digital Opportunity #3 Growth/Reduction/None Goal opportunity assessment Related to Activity 1.3.2 Update with relevant information.

19. 1a Goals Underlying Drivers Digital Opportunities Growth or Reduction Strategy Solution? What is the underlying driver for the goal? Was there a root cause problem that the goal is intended to alleviate? What digital opportunities could be leveraged that would address those underlying drivers? Indicate whether the digital opportunities could be obtained or addressed through a growth or reduction strategy or not. Goal # 3: Driver #1 Digital Opportunity #1 Growth/Reduction/None Driver #2 Digital Opportunity #2 Growth/Reduction/None Driver # 3 Digital Opportunity #3 Growth/Reduction/None Goal opportunity assessment Related to Activity 1.3.2 Update with relevant information.

20. 1a Goals Underlying Drivers Digital/Technical Opportunities Recommended growth opportunities Related to Activity 1.3.3 Update with relevant information.

21. Discovery & Strategy This phase is intended for IT organizations that want to have an effective M&A program plan and be more prepared for the purchasing transaction, enabling a successful outcome. A structured strategy is particularly necessary for organizations expected to deliver M&As rapidly and frequently. ​

22. IT’s acquiring strategic direction Vision Vision Statement Mission Mission Statement Related to Activity 2.1.1 Update with relevant information.

23. [Company name]’s guiding principles Related to Activity 2.1.2 Update with relevant information. IT Principle Name IT Principle Statement 1. ... We will… 2. ... We will… 3. ... We will… 4. … We will… 5. … We will… 6. … We will… 7. … We will… 8. … We will…

24. Hybrid Model: Acquisition Operating Model IT strategy Enterprise architecture Resource management Strategic communication Workforce strategy Vendor portfolio management Application portfolio mgmt. Data architecture Security strategy Financial management Contract management Stakeholder management Audit & compliance Portfolio management Project management Requirements gathering Solution architecture Data & system integration Application development BI reporting & analytics Org. change enablement Quality assurance User testing Change management Service portfolio management Demand management Security detection Data operations Security prevention Enterprise content management Response & recovery Application maintenance Service desk & incident mgmt. Problem management Infrastructure management Availability & capacity mgmt. Infrastructure portfolio mgmt. Release management Operations management Configuration management Quality management Innovation Asset management Performance measurement IT governance Risk governance Policy management Change governance INITIATIVES & STANDARDS SOLUTIONS & SERVICES Data governance STRATEGIC SERVICES DECENTRALIZED FUNCTIONS SHARED SERVICES NEEDS/REQUIREMENTS Cybersecurity Data management Stakeholder management Project management Requirements gathering NEEDS/REQUIREMENTS Vendor portfolio mgmt. Audit & compliance Performance measurement Risk governance Policy management Change governance Enterprise architecture Application portfolio mgmt. Data & system integration Change management Security prevention Response & recovery Service desk & incident mgmt. Problem management Infrastructure management Operations management Configuration management Asset management Cybersecurity Data management INITIATIVES & STANDARDS SOLUTIONS & SERVICES ONGOING IT OPERATIONS TEAM IT STRATEGIC SERVICES DECENTRALIZED & SUPPORT M&A TRANSACTION TEAM SHARED SERVICES M&A TRANSITION TEAM REPORTING BACK TO Communication & reporting Related to Activity 2.1.3 Replace and update with relevant information. Example

25. M&A transition team Functional groupings Stakeholder management Project management Requirements gathering Vendor portfolio mgmt. Audit & compliance Performance measurement Risk governance Policy management Change governance Enterprise architecture Application portfolio mgmt. Data & system integration Change management Security prevention Response & recovery Service desk & incident mgmt. Problem management Infrastructure management Operations management Configuration management Asset management Cybersecurity Data management Communication & reporting Project Manager Risk & Compliance Change & Communication E A Apps & Data Security IT Operations Related to Activity 2.1.4 Replace and update with relevant information. Example

26. M&A transition team Roles Stakeholder management Project management Requirements gathering Vendor portfolio mgmt. Audit & compliance Performance measurement Risk governance Policy management Change governance Enterprise architecture Application portfolio mgmt. Data & system integration Change management Security prevention Response & recovery Service desk & incident mgmt. Problem management Infrastructure management Operations management Configuration management Asset management Cybersecurity Data management Communication & reporting Project Manager Business Analyst Stakeholder management Risk & Compliance Manager Change Manager Communication & Reporting Analyst Enterprise Architect Applications Systems Analyst Data Engineer Security Prevention Analyst Cloud Architect Helpdesk Analyst IT Operations Manager Related to Activity 2.1.4 Replace and update with relevant information. Example

27. IT’s acquiring strategic direction Vision Vision Statement Mission Guiding Principles Mission Statement We will… We will… We will… We will… We will… We will… We will… We will… Transition Team Key Roles Security Analyst Data Architect Change Manager IT Cloud Solution Engineer Related to Activities 2.1.1, 2.1.2, 2.1.3, and 2.1.4 Replace and update with relevant information.

28. Identify M&A governing bodies The purpose of this activity is to identify where governance happens and who is governing. For different organizations, the governance framework will contain a variety of governing bodies (typically governing bodies own areas such as investment decisions, risk exposure, value measurement, etc.). In a smaller organization, a governing body may be one person (e.g. the CFO), and in a large organization, it may be a committee of organizational leaders. For firms with a less formal governance framework, you will need to apply your understanding of where IT areas of authority take place and what organizational bodies own what domains. Consider who is evaluating, directing, and monitoring IT. In either case, identify and list governing bodies that exist in your organization. Governing Bodies Board Executive Committee M&A Committee IT Steering Committee IT’s M&A Transition Team Committee #6 Committee #7 Committee #8 Related to Activity 2.1.5 Update with relevant information.

29. M&A governing body overview Click to add text Click to add text Domains Benefits Realization Risks Resources Click to add text Related to Activity 2.1.5 Click to add text Click to add text Update with relevant information.

30. M&A governance structure map Executive Committee Meetings M&A Committee Meetings Board Meetings Other IT M&A Transition Team Meetings IT Steering Committee Meetings Strategy Design & Build Run Related to Activity 2.1.5 Replace and update with relevant information.

31. Rank Goal Metric/KPI Success Owner Frequency Data Source Baseline Target Track metrics Track metrics throughout the project to keep stakeholders informed. Related to Activity 2.1.6 Update with relevant information.

32. Integration Posture Selection Framework Adopt One Model Horizontal Vertical Conglomerate Independent Model Create Links Between Critical Systems <10% 10 to 75% >75% Any Absorption Absorption or Best-of-Breed Best-of-Breed Preservation (Differentiated Functions) Absorption or Best-of-Breed (Non-Differentiated Functions) Preservation Any Business M&A Strategy Resultant Technology Strategy M&A Magnitude (% of Acquirer Assets, Income, or Market Value) IT Integration Posture Hybrid: Horizontal & Conglomerate Independent Model Preservation Any A B C D

33. M&A integration strategy Notes: You may need a hybrid integration posture to achieve the technology end state. M&A objectives may not affect all IT domains and business functions in the same way. Therefore, the integration requirements for each business function may differ. Organizations will often choose to select and implement a hybrid integration posture to realize the technology end state. Each business division may have specific IT domain and capability needs that require an alternative integration strategy. Example: While some applications may require absorption to meet the key capability needs of the business, other business applications may remain completely unaffected and independent. Example: While data in the Finance division may require a full absorption integration strategy, the applications that support them need to be rationalized through a best-of-breed approach. Business M&A Strategy Resultant Technology Strategy M&A Magnitude (% of Acquirer Assets, Income, or Market Value) IT Integration Posture Related to Activity 2.2.1 Update with relevant information.

34. M&A RACI Roles Phase Activity Insert roles from the outputs from steps 2.1.3, 2.1.4, and 2.2.1 Related to Activity 2.2.2 R esponsible: The person who is the owner of the problem/project A ccountable: The person that "R" is accountable to and the authority who signs off on work before it is effective C onsulted: A person who provides the information and/or expertise necessary to complete the project I nformed: A person who needs to be notified of results but may not need to be consulted   Update with relevant information.

35. Example communication plan Key Communication Topic Stakeholders Inputs Outputs Type & Frequency IT involvement in M&A Executives , senior management team, M&A team Questions for M&A team M&A business goals and objectives, sign-off on IT’s integration program Monthly via meeting End-state business capabilities Executives , senior management team, M&A team Business modeling template Resultant organization capability map Key points of interest for information gathering M&A team, business unit leaders IT’s initial points of interest M&A team’s and other functions’ points of interest Data room M&A team List of questions about gaps Target’s response to questions Known risks M&A team, business process owners Risks Planned activities to mitigate risks Onsite discovery Target organization, internal business Questions for target organization to prepare Outstanding responses received Provide guidance/input on technology options Business process owners Options and cost impacts Decisions on technology options Submit tactical integration roadmap Broader M&A team Report Approval, sign-off on tactical action plan Refine risks, assumptions, cost estimates Business process owners, IT staff (confidential) Current risks, assumptions, and cost estimates Refined estimates Submit integration roadmap Broader M&A team Report Approval Related to Activity 2.2.3 Update with relevant information.

36. Historical valuation worksheet Complete this worksheet to the best of your ability for each of the IT organizations potentially being acquired. Target Organization History of Publicized Risk Events Solutions Currently in Use Trend/Industry Standard Solutions Architecture With Business Value Stream, Business Capabilities, IT Capabilities Related to Activity 2.2.4 Update with relevant information.

37. Due Diligence & Preparation This phase is intended for IT organizations invited to support the business in the due diligence process and the valuation of the other organization. IT is now is preparing the execution strategy to support integration.

38. Due diligence charter Identify business process owner goals and objectives. Instructions Identify each business process owner you have, their role, and the division they are responsible for. These will usually be the same people involved with the M&A. However, if they are not involved with the M&A, either speak to someone related to that process who is involved with the M&A or develop a fictional story to gauge their opinions on certain items. For example, “If we were to do X, how would it impact your department?” Document their initial outlook by identifying goals, objectives, and priority level. Make any additional notes in the column provided. The table below has sample information for your guidance. Business Process Owner Role and Division Goal Priority (High/ Medium/Low) Objectives/Initiatives Additional Notes Terry Ellis VP Operations Combined ERP systems High Migration of inventory and resource data from target organization to our organization [Notes] Lisa-Marie Jones VP HR Reduced HR staff headcount Medium Outsource the benefits administration division of the target organization Prepare severance packages for laid-off employees [Notes] [Owner] [Role] [Goal] [High/Medium/Low] [Objectives/Initiatives] [Notes] [Owner] [Role] [Goal] [High/Medium/Low] [Objectives/Initiatives] [Notes] [Owner] [Role] [Goal] [High/Medium/Low] [Objectives/Initiatives] [Notes] Related to Activity 3.1.1 Update with relevant information.

39. Work area for data room artifacts Information request – due diligence and data room discovery Information Request Workstream Status Comments IT capital and operating budgets (from current year and previous year) Overall Information collected Target organization provided the capital and operating budgets from 2020 and 2021. Copy of all software license agreements Vendor Management Information collected List of software license agreements has been provided. They need to be reviewed with Legal to determine implications. Inventory (including what will and will not be transitioning, vendors, versions, # of licenses) Applications Pending response [Comments] Dependency Related to Activity 3.1.2 Update with relevant information.

40. Technical debt – Impact analysis Copy and paste the critical outputs from Info-Tech’s Technical Debt Business Impact Analysis tool, conducted for the other organization(s). Technical Debt Description Possible Solutions Owner Total Cost Impact Total Strategic Impact (out of 12) Uncertainty Factor (out of 8) Notes on Impact Analysis Criticality Rating Related to Activity 3.1.3 Update with relevant information.

41. Data valuation When valuating the information and data that exists in an organization, there are many things to consider. Info-Tech has two tools that can support this process: Information Asset Audit Tool : Use this tool first to take inventory of the different information assets that exist in your organization. Data Valuation Tool : Once information assets have been accounted for, valuate the data that exists within those information assets. Instructions Using the Data Valuation Tool, start gathering information based on the eight steps above to understand your organization’s journey from data to value. Identify the data value spectrum. (For example: customer sales service, citizen licensing service, etc.) Fill out the columns for data sources, data collection, and data first. Capture data analysis and related information. Then capture the value in data. Create a data value chain for your organization Add value dimensions such as usage, quality, and economic dimensions. Remember that economic value is not the only dimension, and usage/quality has a significant impact on economic value. Collect evidence to justify your data valuation calculator (market research, internal metrics, etc.). Finally, calculate the value that has a direct correlation with underlying value metrics . Data Collection 01 Data Source 02 Data Collection Method 03 Data Insight Creation 04 Data Analysis 05 Insight 06 Insight Delivery Value Creation 07 Consumer 08 Value in Data Data Valuation 09 Value Dimension 10 Value Metrics Group 11 Value Metrics Data valuation is how you monetize the information that your organization owns. Related to Activity 3.1.4 Tab 2: Data Valuation Tool Leverage the Data Valuation Tool.

42. Application valuation User Costs Total User Costs Derived Productivity Ratio (DPR) Total DPR Application Value # of users % time spent using IT Fully burdened salary Multiply values from the 3 user costs columns Revenue per employee Average cost per employee ( Revenue P.E ) ÷ ( Average cost P.E ) ( User costs ) X ( DPR ) IT and Business Costs Total IT and Business Costs Net Value of Applications Application maintenance Downtime costs (include disaster exposure) Common costs allocated to applications Fully loaded costs of active (FTE) users Sum of values from the four IT and business costs columns ( Application value ) – ( IT and business costs ) Calculate the value of your IT applications Instructions Start by calculating user costs. This is the product of the # of users × % of time spent using IT × fully burdened salary . Identify the revenue per employee and divide that by the average cost per employee to calculate the derived productivity ratio (DPR). Once you have calculated the user costs and DPR , multiply those total values together to get the application value . When valuating the applications and their users in an organization, consider using a business process map. This shows how business is transacted in the company by identifying which IT applications support these processes and which business groups have access to them. Info-Tech has a business process mapping tool that can support this process: Enterprise Integration Process Mapping Tool : Complete this tool first to map the different business processes to the supporting applications in your organization. Once the total application value is established, calculate the combined IT and business costs of delivering that value. IT and business costs include inflexibility ( application maintenance ), unavailability ( downtime costs, including disaster exposure ), IT costs ( common costs statistically allocated to applications ), and fully loaded cost of active (full-time equivalent [FTE]) users . Calculate the net value of applications by subtracting the total IT and business costs from the total application value calculated in step 3. Source: CSO Update with relevant information. Related to Activity 3.1.4

43. Item Costs/Value Hardware Assets Total Value +$3.2 million Hardware Leased/Service Agreement -$ Software Purchased +$ Software Leased/Service Agreement -$ Operational Tools Network Disaster Recovery Antivirus Data Centers Service Desk Other Licenses Total: Infrastructure valuation Assess the foundational elements of the business’ information technology The purpose of this exercise is to provide a high-level infrastructure valuation that will contribute to valuating your IT environment. Calculating the value of the infrastructure will require different methods depending on the environment. For example, a fully cloud-hosted organization will have different costs than a fully on-premises IT environment. Instructions Start by listing all of the infrastructure-related items that are relevant to your organization. Once you have finalized your items column, identify the total costs/value of each item. For example, total software costs would include servers and storage. Calculate the total cost/value of your IT infrastructure by adding all of values in the right column. For additional support, download the  M&A Runbook for Infrastructure and Operations. Related to Activity 3.1.4 Update with relevant information.

44. Risk and security Probability of Risk Occurrence Occurrence Criteria (Classification; Probability of Risk Event Within One Year) Negligible Very Unlikely; <20% Very Low Unlikely; 20 to 40% Low Possible; 40 to 60% Moderately Low Likely; 60 to 80% Moderate Almost Certain; >80% Financial & Reputational Impact Budgetary and Reputational Implications (Financial Impact; Reputational Impact) Negligible (<$10,000; Internal IT stakeholders aware of risk event occurrence) Very Low ($10,000 to $25,000; Business customers aware of risk event occurrence) Low ($25,000 to $50,000; Board of directors aware of risk event occurrence) Moderately Low ($50,000 to $100,000; External customers aware of risk event occurrence) Moderate (>$100,000; Media coverage or regulatory body aware of risk event occurrence) Note: If needed, you can customize this scale with the severity designations that you prefer. However, make sure you are always consistent with it when conducting a risk assessment. The purpose of this exercise is to provide a high-level risk assessment that will contribute to valuating your IT environment. For a more in-depth risk assessment, please refer to the Info-Tech tools below: Risk Register Tool Security M&A Due Diligence Tool Instructions Review the probability and impact scales below and ensure you have the appropriate criteria that align to your organization before you conduct a risk assessment. Identify the probability of occurrence and estimated financial impact for each risk category detail and fill out the table on the right. Customize the table as needed so it aligns to your organization. Assess risk responses and calculate residual risk Related to Activity 3.1.4 Risk Category Details Probability of Occurrence Estimated Financial Impact Estimated Severity (Probability X Impact) Capacity Planning Enterprise Architecture Externally Originated Attack Hardware Configuration Errors Hardware Performance Internally Originated Attack IT Staffing Project Scoping Software Implementation Errors Technology Evaluation and Selection Physical Threats Resource Threats Personnel Threats Technical Threats Total: Update with relevant information.

45. What is the IT organization worth in your business, and have you adequately communicated this worth to executive leaders? IT is in the process of modernizing its IT environment. As a result, both the underlying infrastructure and skill level of staff are outdated. Acquiring an organization that has already modernized could save the business time, effort, and financial costs in the long run. Additionally, the business would acquire employees that have already developed the skills needed to support a modern IT organization. Opportunities to Support Growth Strategy Infrastructure elements are currently in the process of modernization, making their value less than anticipated. Risks The IT organization of the business has seen incredible growth over the past five years. One of the most valuable elements of the IT organization is our data, which is currently valued at $XXX. Overall Comments About IT’s Value Cost & Market Valuation Applications Anticipated Growth of IT’s Value in the Next Three Years (Future Profitability) Infrastructure Risk & Security $0 $0 $0 $ Infrastructure Risk & Security Applications Data $0 Total Data Total Related to Activity 3.1.4 Valuation of IT Update with relevant information.

46. IT Culture Diagnostic results Copy and paste the critical outputs from Info-Tech’s IT Culture Diagnostic, conducted for each organization. Your Current Results Target Organization’s Results Organizational Culture Type % Score Innovative Competitive Cooperative Traditional Organizational Culture Type % Score Innovative Competitive Cooperative Traditional Organizational Culture Type % Score Innovative Competitive Cooperative Traditional Goal Future State of Organization Culture Related to Activity 3.1.5 Update with relevant information.

47. Schedule of integration tasks Prioritize your integration tasks here. Task Stakeholders Assigned Which groups/individuals are assigned for this task? Schedule Category (Day one, 30 days, 12 months, 18 months, etc.) Update with relevant information. Related to Activity 3.2.1

48. Estimation of integration costs Task Domain (Security, Projects, Infra, etc.) Cost Type (Cost Saving, Growth) Total Cost Amount Certainty (Estimated, Confident, Confirmed) Funding Secured (Yes, No, etc.) Update with relevant information. Estimate your integration costs here. Related to Activity 3.2.4

49. Employee transition plan Record your employee transition plan on this slide. Name Current Role Future Role Skills Needed Method for Skill Development Communication Timeline Transition Timeline Is It Permanent? Update with relevant information. Related to Activity 3.2.5

50. Individual functional workplan template Use this slide to record the functional workplan for each employee. Duplicate as many times as necessary. Employee Name: Employee ID: Task New Skills Required Working Partners Point of Contact Due Dates Success Attained? Update with relevant information. Related to Activity 3.2.6

51. Task and metric alignment Record your metrics for each integration task here. Task Metric/KPI Owner Method of Calculation Data Source Baseline Target Rank Domain Update with relevant information. Related to Activity 3.2.7

52. Execution & Value Realization This phase is intended for organizations that are tasked with executing an agreed-upon transaction and ensuring a successful integration process for the two (or more) IT environments.

53. Final integration costs Record your final integration costs here. Task Workstream (Security, Projects, Infra, etc.) Total Cost Amount Change From Estimate (Increase or Decrease) Rationale for Change in Cost Update with relevant information. Related to Activity 4.2.1

54. Task and metric review Record your metrics for each integration task here. Task Metric/KPI Owner Method of Calculation Target Actual M&A Goal This Supports Related to Activity 4.2.2 Update with relevant information.

55. SWOT Complete the SWOT by critically examining how the transition and integration went. Use the sample questions as a starting point for your own SWOT. Opportunities External characteristics that you may use to your advantage. Was your IT organization given access to new vendors and solutions that enabled it to do its job better? Did the transition provide your IT organization with access to much-needed funds to complete critical modernization projects? Threats External characteristics that may be potential sources of failure or risk. Did a security attack take place during the transition? Were other organizations ready to take critical staff from this organization during the transition? Weaknesses Internal characteristics that are unfavorable or need improvement. What goals weren’t achieved? Were there opportunities to retain staff knowledge that did not happen? Strengths Internal characteristics that are favorable as they relate to your development environment. What goals were achieved? What staff knowledge was retained? Was the business able to support customer and employees needs on day one? Update with relevant information. Related to Activity 4.2.3