The IT integration of mergers & acquisitions

Abstract

The role of information systems in mergers and acquisitions (M&A) becomes increasingly important as the need for speed of reaction and information is growing. Mergers and acquisitions may disrupt the operations of the organizations involved. Major issues include the need to integrate personnel, business processes, information systems, and diverse information technologies across the merging organizations. Executives who underestimate or disregard the costs and time associated with merging computer applications, infrastructure or IT organizations will face unpleasant surprises. However, if carefully planned and properly managed, the merger/acquisition and the resulting integration process can become an opportunity to strengthen the capabilities of the combined organization and place it in a better competitive position. The study addresses some of the most important M&A IT planning concepts that executives should know about so that technology-related problems do not delay M&A related business benefits. This study investigates factors that influence the effectiveness of IT integration in M&A.

(cont.) After studying trade journals and examining some cases, I investigated the following: 1. Determine the proper integration approach based on strategic intent of the merger or acquisition and the type of transaction 2. Determine the integration approach based on the business function support level The research is based on cases developed through archival research and field-based interviews. The case study research method allows researchers to gather holistic and meaningful characteristics of real-life events. The research includes the study of trade journals and case studies, and a literature review to understand basic problems and solutions of IT integration under the context of M&A. Then study of trade journals and cases led to the development of a set of research questions that are important to the success of IT integration. Hypotheses are proposed for those research questions based on academic literature review. This was followed by archival analysis of M&A cases to examine and refine the framework.