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Half-baked mergers

Bart Perkins | Sept. 22, 2014
Many woes await companies that inadequately integrate after a merger

Several years ago, a $12 billion, merger-created manufacturer believed that a consolidated infrastructure would reduce IT costs. Unfortunately, accountants reduced the combined infrastructure budget 15% on the day the merger documents were signed, causing layoffs in infrastructure staff. The remaining team had no time, staff or budget to integrate networks, applications, domains, etc. As problems and frustrations rose, the staff's morale and productivity plummeted, reducing service levels. The rest of the enterprise was angry; worse, customers were irate.

Unproductive employees. With any merger or acquisition, employees expect reorganizations and potential layoffs. Until the new organization is announced, most employees are highly concerned about their personal future. Until each knows what his or her new job will be, much time can be wasted speculating, commiserating and interviewing.

Poor vendor management. Mergers frequently result in more than one vendor providing primary IT products or services. This presents an opportunity to review each vendor's product offerings, pricing, service and contract terms. Failing to conduct a full supplier review inevitably results in duplicate expenses. In addition, mergers and acquisitions can affect licensing terms — beware of violations that can result in huge penalties!

Properly implemented mergers and acquisitions should produce major benefits for all stakeholders. When a merger occurs on paper but not in practice, problems and failures outnumber benefits. Poorly managed mergers frustrate everyone! If your customers don't receive benefits, why should they tolerate the hassles? Deliver or be deserted.

 

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