MANAGING IT

Management - Managing IT in the Merger and Acquisition Game



Management - Managing IT in the Merger and Acquisition Game

Introduction

This discussion will shed light on one such particular area of the challenges and complications that riddle mergers and acquisitions. The discussion will highlight the risks associated with the acquisition of another firm's IT infrastructure and shed light on the reasons because of which firms tend to fall short of taking the other firm's IS and IT infrastructure into account when purchasing other firms.

Discussion

Mergers and acquisitions have become a common corporate occurence in today's modern day corporate environment. The merger between HEXAL/Novartis makes it clear that they are considered to be positive developments in industries and considered to be stimulating for industries. However, mergers and acquisitions are riddled with complications and challenges. These complications and challenges are generally rooted in the differences between the organizations that are being subjected to the mergers and/or acquisitions (Moore, 2005). For instance, commonly found cases of challenging mergers and acquisitions are those in which the mergers and acquisitions involve backward or forward integration; as evident in the case of UJF/Mitsubishi Tokyo. In such cases, somewhat unrelated business models tend to come together (McDonnell, 2007). In essence, this happens because different members of the value chain become one; thereby causing the value chain to contract and creating a need to condense operations and processes.

As observed in the case of Gillette/Proctor & Gamble there are a number of risks involved when one firm acquires another firm's IT infrastructure (Satwah, 2006). These risks mainly pertain to the differences between the nature of the two firm's IT infrastructure. A simple example can be a case in which one firm makes use of Linux while the other makes use of Windows based operating systems. This will make it extensively complicated to ensure that file, data and resource sharing is seemless (McDonnell, 2007). In addition, the risks involved when one firm acquires another firm's IT infrastructure also include the threat of harmful/damaging files. This can cause a corruption of important files; resulting in extensive damage.

The management of IT infrastructures in mergers/acquisitions demands that IT managers from both organizations communicate extensively so that they can come to terms with each other's standard operating procedures and understand the rationale behind those standard operating procedures. An ideal example can be found in the case of the merger between Gillette and Proctor & Gamble. In cases where differing software platforms are being used, this may take a significant amount of time (Satwah, 2006). However, this time is not a cost but an investment for the organizations involved in the merger/acquisition because once the two IT infrastructures have been brought together on the same level, the organization formed as a result of the merger/acqusition is able to develop synergy as a result of the increased capacity and an increased access to data (Moore, 2005).

Conclusion

The IT infrastructure is generally taken for granted and considered to be an aspect that the IT department can ...