There is a strong indication that little attention is paid to the compatibility and effectiveness of integrating information system in the pre-merger and acquisition planning phases. When corporate deals are announced, information system priorities and requirements are often not clearly articulated and, as a consequence, receive inadequate resource owing to the perceived higher priority requirements of other merger functions. Research in this area suggests that currently more than 10 per cent of mergers and acquisitions fail due to information system considerations. As the organizational value of information system rises, so this figure is likely to increase.

As business strategy increasingly drives the role of information systems, so the alignment of competitive strategies of merging firms becomes an increasingly important factor for future information system compatibility and integration. There may be implicit differences in generic strategy between two merging organizations. It is essential that information system supports a coherent set of strategies; any conflict is likely to cause confusion, sub-optimal or even contrary decisions to be reached. In a merger or acquisition situation early analysis should recognize the potential for strategic conflict and include an assessment of the role of information system in terms of its use in the industry, by competitors and relative effectiveness within the new entity. By using these techniques, it is possible to translate the results into implications, risks, and priorities for integration and investment.

For example, it is also important to understand how each firm generates productivity reports, and what the key components of management reports are. For example, one firm may consider the originating partner as the key factor while another may treat the billing partner or responsible partner designation as having greater significance. In this case, it may be necessary in the conversion process to change originating partner to responsible partner before merging the data in order to conform to an existing management preference.

It is clear that mergers and acquisitions will continue to play a major part in the global business environment as a method for achieving organizational strategic goals. Investment in information system infrastructure is also increasing, as is its underlying value to the organization. Given the focus and economic investment in technology infrastructure by organizations of all sizes in different sectors, information system integration in the pre and post phases of any merger are clearly a key factor for success in unlocking the benefits of the combined entity.

References:
Merali, Y. and McKiernan, P. The Strategic Positioning of Information Systems in Post-acquisition Management, Journal of Strategic Information Systems, Vol 2, No 2 (1993) pp105-124.

Bank Merger: Fit, Compatibility and Models of Change, Journal of Strategic Information Systems, Vol 5 (1996), pp 189-211.

Stair R., Reynolds, G. (2006). “Principles of Information Systems, 7th Ed.” Massachusetts:
                  Thomson Course Tech