According to Tanriverdi [3], there are five dimensions that play a role in IS/IT integration in M&As. These five dimensions are:
1. Integration of the IT infrastructure
2. Integration of the IT applications and data
3. Integration of the IT Human Resource Management processes 4. Integration of the IT vendor management processes
5. Integration of the IT strategy-making processes
The first dimension corresponds with Iyamu and Kekwaletswe [1] refer to as IT. This dimension involves integration of computer networks, computer hardware and operations systems [3]. The second dimension - integration of applications and data - focuses on integrating the information systems, which are the applications that run on top of the IT infrastructure and which support the business processes and operations. Integration of these applications includes integrating the corresponding data. Often there are data incompatibilities and a conversion has to be made to integrate the data. Integration of the IT HRM processes entails coordination of retaining, training and motivating IS/IT talent during the M&A and recruiting new talent. Retention is considered to be a primary concern, since existing personnel has knowledge about the existing IS/IT. Vendor management is about coordinating which vendors relationships are maintained, terminated or set up based on the requirements for the new situation. Finally, from a more strategic perspective the strategy-making processes need to be integrated to enable joint actions.
Tanriverdi argues that the integration does not stop after the initial integration. The integration phase is used to create a common foundation for the IS/IT and once integrated one should ensure that this commonality is maintained. Possible means by which this could be achieved are setting common policies and standards, and using common data models [3].
The dimensions that Tanriverdi gives can be mapped to the levels of integration – strategic,
organizational, information systems and IT systems – identified by Henningsson from section 3.3.5. The IT infrastructure corresponds to the IT system level. The IT applications and data can be mapped to integration at the information systems level. Integration of the IT human resource management processes take place on the organizational level. The integration of vendor management processes can occur on both the organizational and strategic level. The actual processes of are of a more organizational nature, but choosing among the vendors and setting strategic goals for the vendor relations are of a more strategic nature.
Several studies have examined IS/IT integration in M&As by looking at multiple levels at the same time. For example, Johnston and Yetton [4] studied the integration of two large Australian banks from a technical, organizational, and strategic perspective. They built on Mintzberg’s typology for
organizations to sketch two ideal types of IS/IT organizations configurations. The ideal IS/IT
configurations are defined using the following five characteristics: strategy, structure, management processes, systems, and roles/skills. Different IS/IT organizations can be analysed using the five
characteristics to identify discrepancies and compatibility. If the two organizations are both close two the same ideal configuration type, integration is likely to be easier than when they are closer to different ideal configuration types.
Table 3: Ideal IS/IT configurations [4]
Characteristics IT in the machine bureaucracy IT in the divisional form
Strategy Cost focus - efficiency
IT driven Value added focus – effectiveness Business unit driven
Structure Centralised
Bureaucratic Decentralised Professional
Management processes Formalised Control emphasis Mechanistic Position-based rewards IT standards Flexible Empowerment emphasis Organic Performance-based rewards IT service
Systems Single dominant platform
Common IT standards Simple architecture
Multiple platforms Incompatible systems Complex architecture
Roles/skills Long-serving staff
Internal recruitment & development
Seniority emphasis
Mobile staff
External recruitment & development
Merit emphasis
Table 3 contains the two ideal IT configurations of Johnston and Yetton. The original framework of Mintzberg contains five different organizational forms. Johston and Yetton only derived the IS/IT of two of the five organizational forms. For the other three forms – simple structure, professional bureaucracy and adhocracy – the IT configurations were not derived because these were not considered relevant for the case studied. The simple structure is for small, young and entrepreneurial companies. The adhocracy is for fluid, dynamic and highly innovative companies. The third
neglected form is the professional bureaucracy, which applies for specialist organisations.
Another important dimension at the organizational level is culture. According to Johnston and Yetton [4], culture emerges “from the particular evolution of organisational components within each
configuration”. In the case studied by Johston and Yetton, the incompatibility in culture was itself
enough to inhibit actual integration. This finding in mirrored by the research of Weber and Pliskin [33], in which 69 M&As were investigated and was concluded that high culture differences - especially for highly IS/IT intensive companies - inhibit overall integration, which leads to the M&A being less effective. In other words, cultural differences need to be controlled in order to make the IS integration and the overall M&A effective.
More specific on IS/IT culture, there are three different values that play a role [42]. First, there are the group member values which reflect the beliefs about what is important to that particular group. Second, values embedded in a specific IS/IT refer to values that are assumed in the work behaviours that the IS/IT interacts with. Third, the general IS/IT values refer to those values that a group ascribes in general to IS/IT.
These different values can conflict with each other, which are the actual culture conflicts. Three forms of IS/IT culture conflicts can be identified [43]. A conflict between the group member values and the general IS/IT values is called a contribution conflict. A vision conflict occurs when the general IS/IT values conflict with the values embedded in a specific IS/IT. Finally, a system conflict occurs when the group member values do not match the values embedded in a specific IS/IT. These conflicts can occur on a subunit level, an organizational level and a national level. Figure 15 shows the relationships between the different values, levels and corresponding conflicts.
Figure 15: IS/IT culture conflicts [42]
Lin and Chao [43] have investigated the IS/IT culture conflicts that occurred when integrating two banks and found that differences in the organizational culture and the characteristics of an IS/IT platform lead to IS/IT culture conflicts. Changing the group member values and promoting shared IS/IT values helped to reduce the conflicts. The findings of Lin and Chao [43], Weber and Pliskin [33] and Johnston and Yetton [4] show that culture is an important factor that should be considered when integrating IS/IT.