Consultants in the post-acquisition integration of information systems

Christian Øhrgaard

Student thesis: Master thesis

Abstract

Acquisitions are increasingly used as strategic means for companies to create value through synergies such as expansion and improved efficiency. In most cases though, companies fail to achieve the synergies as expected. Due to the direct link between post-­‐‑ acquisition integration success and performance, as well as IT as a key driver of synergies in M&A’s, the post-­‐‑acquisition IS integration becomes critical in achieving success. Some companies are very efficient in this process, while other companies are not. Common to all is that the post-­‐‑acquisition IS integration process is a complex task that requires attention, competencies and expertise. The extant research literature on the topic explores whether it is possible for a serial acquiring company to obtain M&A integration capabilities based on its experience, and thus increase its rate of success. As most companies use consultants in relation to the post-­‐‑acquisition integration of IS, their impact on the integration outcome is an important factor to consider, why the integration experience of a company alone cannot be seen as the sole factor for success. This study takes a first step in exploring the role of consultants in the integration of information systems following mergers and acquisitions. A conceptual model of the IS integration is presented together with a theoretical framework, based on a cross-­‐‑field literature review. The framework is tested empirically through acquisitions performed by four large Danish manufacturing companies. Four types of consultant utilization are presented and supported by the empirical findings. The perception of the IS integration process assumed in the extant literature is discussed as the term ‘resource bump’ is introduced, referring to the temporary need for additional resources during the IS integration, which in most cases is filled by the four types of consultants. Three integration types are suggested, accounting for the integration strategies pursued by companies, determining the time and the size of the resource bump, and the use of consultants in the post-­‐‑acquisition integration is considered in relation to these. The findings of this thesis makes a delimited contribution to the extant knowledge body of information systems integration in mergers and acquisitions. Focusing academic attention on the field of IS integration in mergers and acquisitions might eventually lead better understanding of the process and of the resources used to perform the integration tasks, improving the IS integration capability across companies, enabling synergies and thus improving the currently lacking financial performance.

EducationsMSc in Business Administration and Information Systems, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2011
Number of pages104