The Role of IT Networks in Mergers and Acquisitions

The Role of IT Networks in Mergers and Acquisitions

Van der Marel, J.M.

Bouwman, W.A.G.A. (mentor)
Scholten, V.E. (mentor)
Schonewille, J.P. (mentor)
Leonor, J. (mentor)

Technology, Policy and Management

Information and Communication Technology

Management of Technology

2011-03-31

The situation of two companies in a merger presents unique challenges to IT network integration, because both companies have an existing IT network. These networks might not be compatible and would need to be changed to be able to support the combined business process after the merger has taken place. Research on mergers and acquisitions has been mainly focused on organizational and cultural aspects and many mergers seem to fail to achieve their expected goals. Moreover, no systematic research has been performed into the role of IT networks in M&A. As modern companies seem to be dependent on their IT assets and IT networks, failure to integrate those assets could also contribute to M&A failures. The literature suggests that proper preparation of IT integration could decrease the chance of M&A failure. Therefore, the focus of this research is to determine how to support the preparation process of IT network integration in a merger. Therefore, the main research question is defined as: “How can companies prepare and manage the integration of IT networks in M&A to enable the combined business process and achieve the expected M&A goals?” A design approach is performed in this research to design a tool that supports network experts in the preparation process of network integration. The methods that have been used in this research include a literature review of the relevant subjects, namely mergers and acquisitions, IT networks, IT network integration, decision support systems and decision support tools. Gathering qualitative data for this research has been done through interviews with network experts. In total 14 interviews were conducted with experts from within and outside Accenture, spread over two rounds of interviews. The results of the literature study and the interviews will be used to design the support tool that satisfies the goal of this research. This thesis report covers information about what mergers and acquisitions are; what the IT networks of companies are; what is important for the integration of those networks; and how decision support systems and decision support tools can be used to design a tool that assists with IT network integration in M&A. This thesis also provides a process model that describes the steps for preparing network integration in M&A. Moreover, the decision making process that is the most important part of those steps is provided in decision trees. For each of the common problems in IT network integration, the decision tree helps the decision maker to evaluate the most important decision criteria and subsequently results in an appropriate integration strategy. The process model and the decision trees have been combined in a design: the Network Integration Support Tool (NIST). In conclusion, merging companies can prepare for the integration of their networks by following several steps as described in the process model. The first step begins with thoroughly analyzing the starting configuration of the networks. From this analysis, it will become clear which parts of those networks are in conflict and need to be combined into an integrated whole, defined in step two. The third step is to determine the integration strategy for each of those conflicts. Determining the integration strategy is supported by a model in the form of decision trees that provide insight in the decision making process. The final step is the creation of an integration plan that can be used to execute the IT network integration in M&A. The network expert can be assisted in these tasks, by using the Network Integration Support Tool.

mergers and acquisitions
IT network
integration
process model
decision tree

http://resolver.tudelft.nl/uuid:c26f83b3-059d-4edd-a548-2dd1301bea46

Student theses

master thesis

(c) 2011 Van der Marel, J.M.