Managing processes and information technology in mergers - the integration of finance processes and systems

Abstract

Many companies use mergers to achieve their growth goals or target technology position. To realise synergies that justify the merger transaction, an integration of the merged companies is often necessary. Such integartion takes place across company business areas (such as finance or sales) and across the layers of management consideration, which are strategy, human resources, organisation, processes, and information technology.

In merger integration techniques, there is a significant gap regarding the management of operational level issues. Yet, especially for the finance business area, an integration of processes and information technology is of high importance and often required swiftly after the merger. The author therefore presents an approach designed for managing the operational level merger in the finance business area.

To close the gap in considering operational level issues, the author has developed a model for integraring finance processes and information technology of merging companies. For such model development, literature resources have been used along with merger experiences of the author, and interviews with merger experts. Validation of the developed model has been conducted by using in-depth case studies for showing the effects of applying the model. Further validation interviews have been conducted to support the generality of the approach.

Accommodating the significant increase of task complexity during mergers compared to normal business operation, the presented approach focuses on managing interdependencies instead of project detail. Features of this approach comprise:

An organisational proposal to settinmg up merger programme management; An interdependency model, vertically interconnecting the finance business area with strategic and organisational merger decisions, and horizontally interconnecting the finance business area with other business areas.

It could be shown that the presented model improves merger integration quality by reducing complexity of merger management. The model is most applicable for larger companies, and can be used in any merger phase.