Organizational Issues of Mergers and Acquisitions - Part 3

Systems Integration

Systems Integration

Procedural Imperatives

Merging two or more organizations into one will require the integration of technology between the groups. Chances are many of the same business objectives are achieved utilizing different hardware and software platforms; in order to make similar business units function as one they must have the technology in place to enable their systems to communicate at the machine level.

The easiest way to achieve this is the migration of one group's functionalities to the same technology platform as the other. Selecting the best platform to use, however, transcends the possible technological superiority of one system over another. More importantly, there are organizational considerations to keep in mind. As an example, one group may use Oracle as their primary accounting database, the other may use SAP. Without getting into the relative merits of either platform, the main focus should be on the ease of transition from one system to the other from the perspectives of process, procedure, and organizational structure. It may, in fact, be easier to transition larger groups of individuals to a new platform. A large part of this decision will be based on the nature of the merger or acquisition, and which group bears the responsibility for corporate level activity.

Another very important aspect to consider is the anticipated procedural changes that will take place as a result of the integration of systems and business units. One author suggests that the traditional marketing mix of product, price, place, and promotion, there should be two more "p's" added: people and process. While it may seem like a radical idea to apply marketing principles to functions that are not readily visible to the outside world, the concept goes hand-in-hand with the convention of treating other business units within the enterprise as customers. (Boar, 2001)

Regardless of where the lines are drawn, integrating system functionalities between enterprises is an important aspect of standardizing process and procedure, and culturally integrating diverse organizations.

Technological Obstacles