The Role of IT in Post-Merger Integration: An exploratory study of two cases in the transport industry

The Role of IT in Post-Merger Integration: An exploratory study of two cases in the transport industry

Feij, M.W.

Tan, Y.H. (mentor)
Bouwman, H. (mentor)
Scholten, V. (mentor)
Schonewille, J.P. (mentor)

Technology, Policy and Management

Information - and Communication Technology

Management of Technology

2013-09-23

Purpose - Mergers & acquisitions (M&As) have become a common way to rapidly acquire skills, assets and/or market share in today’s business environment. After a deal is signed, integration processes in the post-merger phase often serve to realize the expected benefits from the M&A. Since IT is increasingly intertwined with the way that firms conduct their business, it is observed that more and more synergies depend on the successful integration of enterprise-wide information systems. The objective of this research is to increase our understanding of how business and IT reciprocate during post-merger integration (PMI) processes. Design/methodology/approach - Findings are based on an exploratory case study of two horizontal mergers in the transport sector. An adapted qualitative research approach from Miles and Huberman (1994) has been used for data analysis and drawing conclusions. A conceptual model based on scientific literature was constructed in order to assess 29 readily transcribed interviews with managers who have been involved in post-merger integration. The post-merger phase was modeled as a business integration and an IT integration that run in parallel, and both include manageble PMI factors and observable PMI effects. In two consecutive rounds of data coding the model has been adapted in order to draw relevant conclusions. Findings - The research has revealed a number of complex interaction effects through which business and IT influence each other during post-merger integration. Business and IT are so strongly interlinked in PMI that it does not make sense to consider them in isolation. Business processes have been identified as an area through which the business integration and IT integration are interlinked. The concept of process integration level has been introduced to explain tenacious implementation issues that have occurred in both the case studies. The process integration level proposes an approach to post-merger integration from a process perspective in considering the desired level to which processes in the new organization should amalgamate, which subsequently have implications on the business and IT integration levels. Limitations/implications - This research explains the reciprocation between business and IT in post-merger integration for the two cases that have been considered. A number of limitations are inherent to the limited number of cases studied. Although findings have been validated by literature review, they have only been applied to M&A cases of horizontal, similar-sized firms in the transport sector. Future research should aim to extent this reach and increase the external validity of the proposed concepts. Originality - This research has highlighted a number of complex interactions between business and IT in a post-merger situation. It is pointed out how IT is used as an instrument for change in arriving at a desired business integration level, and an perspective is provided on how to avoid the undesired issues that can arise. This research is unique in the way how it proposes to consider the business processes of the new organization to explain the role of IT in post-merger integration. Findings are relevant to both scholars in the field of information systems integration in M&A, as well as practitioners who are facing a post-merger integration.

mergers & acquisitions
M&A
IT integration
information systems
business processes

http://resolver.tudelft.nl/uuid:fd13e5c7-8514-4dc1-987c-e0f604cde6bd

2013-09-23

Student theses

master thesis

(c) 2013 Feij, M.W.