The study is exploring the
relationship between intergrating Information Technology (IT) and banking
mergers and acquisitions (M&A), revealing a significance of IT-related
elements in banking M&A integration. The purpose of the research is
obtaining the knowledge of IT integration process, its driver, dynamics, and theoretical
models and frameworks.
The study is important in contributing to the knowledge
on best practice for IT integration within M&A in banking. Blueprint layout
and integration model can be used in guiding and supporting banking M&A
transactions. It is important because it is
widely considered a critical resource and an enabler in the business of modern
banking. On the other hand, it is also a very important element of the
post-merger integration, oftern underpinning the realization of a significant
part of the projected M&A gains.
Not only using different cases to
test how IT –related advantage in M&A and collecting reports from sixty
four company reports, white papers and other relevant works but also from
interviewing four London- base high ranking bank officials who supervised IT
integration in a number of M&A transactions (Citigroup, Nomura, UBS,
Deutsche Bank, Lloyds, and Royal bank of Scotland) writer found out some
important results that would help people who are still consider about IT –
related advantage in M&A.
First, IT – related advantage as
a frequent element of the M&A gains. This advantage is achievable and
properly enforced guidance for IT integration exists. Even though it might be
not enough guidance, the integration might still result in significant
unplanned gains if the staff in charged are experienced and keen to deliver,
the IT – related advantage then follows as a bonus.
Second, there are some issues for
banks or even other enterprises have to face with by using IT. It will be:
-
Lake of clear business
strategy
-
Aggressive targets that overstretch organizational and
technological capabilities
-
Lake of personnel with
relevant experience involved in a timely manner
-
Power struggle between management of the merging
organizations.
Third, it takes a number of years
after the official completion date for the merged IT infrastructure from previous
banks or enterprises before merging. Specially for banking industry, IT
capability by large equals the business capability raise some serious
implications.
This article would help
practicing managers distinguish that M&A IT integration in banking from
other types of IT integration process will need some tasks to support the
business operations post-merger as quickly as possible. According to “portfolio
best of breed” mangers have a chance to minimize the business risks associated
with the prolonged IT integration and balance in term of the delivery time and
quality.
Key success factors of M&A IT
integration is create a clear link between the business strategy driving the
merger and the priority of the IT integration tasks, enlarge staff experiences,
and motivate employees. Moreover, it will complete the right standard as
quickly as possible, whilst the main constraining factors are overly aggressive
targets and quality of management decisions.
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