How to conduct the IT integration for value creation – principles and recommendations

My Reflection | Ted | 2021/05/19

To achieve competitive advantage, it is normal to see two company merge to form a new one. Lots of challenges would pop up during the process of integration. Unlike the business integration, the IT integration is more implicit due to the invisibility of information underlying logics. Therefore, the potential risk and benefit would be easily ignored by executive management. For instance, Disney acquiring some film and television companies such as Marvel Entertainment and Pixar mainly is for obtaining the intellectual property to entering a renaissance. The IT integration was put on the agenda after a long time.

In fact, the inflexibility of the legacy systems could bring difficulties in business adjustment. Firstly, the high level of systems customisation with different data formats make business procedures incompatible to each other. Therefore, different departments could hardly share the information or handle the same project together if they located in different branches. Secondly, the system redundancy and functional duplication bring instability and inefficiency to the systems, leading to an offset the benefit of the merger. Thirdly, the old contract signed before the merger could bring uneconomical results to the new company.

To reduce the adverse impact to the business and guarantee the success of operating cost saving, a proper IT integration is necessary. Here is some basic principles of IT integration as follows:

1. The IT integration should not affect the original products and services without limit, which means the change of the interactions with all customers and partners should be controlled in a minimal level.

2. All the business data should be maintained accessible, reliable and integrated with unified management and security protocol.

Therefore, here I recommend the following schemes should be considered for IT integration.

1. The duplication might be removed to simplify the technical infrastructure.

2. The aging core business systems might be migrated to modern ones.

3. The separate scattered servers might be replaced with the shared one in the data centre with the back-up servers in different places.

4. The main operating systems could includes Enterprise Resource Planning systems (ERP), Customer Relationship Management (CRM) and Supply Chain Management systems (SCM) with EAI/ESB for IT systems integration.

5. Cloud computing technology might be adopted with security concerns. The new company might deploy some services on the hybrid cloud to obtain the high flexibility and competitive advantage.

To be continue…

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