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Yasril SyafUniversity of IndonesiaQuestion 1:You are leading the Accenture team to develop the IT Strategy for the integrationservices for the merger of the two banks. Using Accentures proven "MergerIntegration Framework and Methodology" what steps and what areas will youprioritize to ensure that the strategy fits with the overall goals?To help you in making a decision, here is Accentures Merger IntegrationFramework and MethodologyThe areas and steps that we should prioritize: Establish Merger Framework o Detailed Due Diligence in Progress o Overall Financial Targets o Preliminary recommendation and Identifying C-Level. o Establish PMO, Team Structure, Approach and Feasibility. o The Roadmap
Conduct Integration Planning o Target it as feasible as you can! o Solid team and establish effective communication channel. o Make feasible milestones! o Don’t leave your customers and employees! Execute Integration Plans o Deployed Integration Plans! o Define your KPI (Key Performance Indicator) and report it! o Ongoing Synergy Tracking. o Deliver the result and provide remediation and evaluation.The conditions of the existing busines and IT environment and align it withAccentures Merger Integration Framework and Methodology and othermethodologies in references.Business Conditions and Consideration for the Integration: Different market segments thus the business process not 100% same, it’s unique and need some adaptation and alignment on both sides. The merger must consider that the new brand of X and Y doesn’t make the customers confused and not confident with the ‘big name’, services, and products. ABC group has many product such as: consumer banking, investment banking, Islamic banking, asset management and insurance products and services. Islamic banking product has a lot of different business processes than conventional banking products. Focusing on the new products by maintain, remove, or add the new ones by combining and assessing the products that X and Y has before. BI (Bank Indonesia) regulations that ABC Group must comply to merge two banks. Manage the assets of two banks is not easy and need a lot of effort and may influence financial aspect and condition. The speed of the integration project that influences the operation of the merged bank. ROI and Financial targets that both C-level must decide about the merger. Remind and make the BOD/C-level realize their roles in the integration from the beginning to the end such as communication, establish target and objectives, create or combine new brand for the product, determine the operation activities, and harmonizing both policies and cultures. Leadership!! Integration cost and the benefit that the whole parts must consider about it. Must retain whole customers from two banks and make them feel safe and comfortable with the merger issues. Speed up the integration execution and handle the problem of IT and Business operation aspect after post-merger implementation. The Integration planning must consider the risk that may be occurs during the implementation and post-implementation phase. The merger would make new organization structure and change the BOD roles and authorizations or even the employees. Creating new values for the new merged bank must be synchronized with the ABC Group’s vision.
Financial statement and the audit reports of both sides X and Y should be synchronized and be integrated in order to comply the regulations and manage shareholders and customers’ trust.IT Conditions and Consideration for the Integration: The two banks have huge customers base, 3.3 Million customers in total. Need to improve IT capabilities and effectiveness because the volume will doubled in a line with total of the customers. Distributed and decentralized systems in the two banks (more than 100 applications need to be aligned and integrated or rationalized). Need the right enterprise application integration technique to accommodate the whole integrated systems. Need to retain and integrate two different legacy systems for credit card business alignment - Bank Ys merchant acquiring system and Bank Xs card issuing system. Need to consider and manage about the outsource services usage for the credit card industry such as Visa, MasterCard, Cirrus, etc. Different network architectures (hub & spoke vs. star topology). Need to consider about the protocol of both sides and make sure that whole data can run-through along the network with the middleware or with the total change of infrastructure. Geographic spread (more than 650 branches, 1267 Automated Teller Machines (ATM), 237 Self Service Terminals (SST) located in across country). Need to consider about the enhancement and multiplication of the facilities and the infrastructure. The segmentation and the location of the customers also must be considered in developing these facilities. Manage the scope of IT Integration and what technical aspects should consider when implement the plan. Ensure integration and iteration between the business and IT meet the point which both sides can support each other. Analysis and manage the gaps between IT and business area in order to make same goals and objectives. Analyze the feasibility analysis of organization, economic, and technical aspects that may influence the success of the project. Establish the project plan and the IT team members with the right expertise and manage the team’s structure that will develop and implement this plan include the PMO. Make sure the integration target, budget and schedule are sufficient and meet the target. Start the processes of the Integration with the mature planning, the basic framework for managing it has the same steps and meaning with SDLC (System Development Life Cycle) or you can use best practices and proven framework. Make sure that the team and the partner such BOD, etc has a good communication channel and method to ensure that the scope, target, and the objectives are clear. Make data conversion strategies from the both legacy systems to the new integrated by creating comprehensive data conversion and migration plan. Next step is make sure that the comprehensive testing is occurred. Define the new IT architecture for the new merged bank in order to convince the continuity of the operation and framework of the whole IT and business processes. Don’t forget to train and enhance your employees’ skills to adapt the new environment. Not only the way to use the new system but also train them about the new business processes and the workflow of the whole system. The important thing is they comply with the inernal control of the new system and environment. Provide the evaluation and remediation processes in the post-implementation phase to ensure the continuous stability and learning.
Easy Guidelines and Recommendations to achieve successful Integration Planning o Match the timeframe and schedule of integration project! o Determine scope and degree of the integration project. o Communicate the project and objectives to whole stakeholders and C-level. o Determine the method of integration whether partial or full integration depending on our business and IT objectives. Picture 1. Taken from Post-merger information technology integration:Steering a smooth course through rough waters, Richard Chang Conduct and Managing the Integration o Leading the project and the team. o Requirements are always change! o Translate business objectives to IT objectives. o Make it as efficient as possible. Executing o Done when all peoples and divisions ready! o Don’t make redundant and lag data when Go-Live! o Maintain stability, flexibility, and scalability.Reference : 1. Seven Catalyst for Merger Integration Success, Andy Tinlin & Alberto Vega, 2009 2. Getting Ahead of the M&A Curve to Drive High Performance, Accenture 2009 3. Driving the full business value of mergers and acquisitions through better IT due diligence, Jonas Arlebäck and Joakim Percival, 2006 4. Post-merger information technology integration:Steering a smooth course through rough waters, Richard Chang, 2001