Assessing an IT system implementation in a post merger scenario

Sammanfattning: Mergers and acquisitions (M&A) are today two common ways to expand and grow businesses. However, studies report that around 50-75% of all M&A transactions fail to yield expected results. This study focuses on the value creation realized in the post merger integration. During the post merger integration, organizational structures, IT systems and work routines need to change and integrate in order to achieve the desired synergies. Often when processes need to change or new ways of working are implemented, artifacts are utilized to facilitate the change. However, managers often fail to recognize the social perspective of organizational change. This study analyzes how a warehouse management system was used in a post merger integration to drive organizational change and establishing a common way of working between employees from different companies. The researchers have conducted a case study at a private equity firm that recently acquired and merged six companies in the fast moving consumer goods industry. As part of the case study, interviews and observations were made. This thesis presents two main results. First, that the choice to adopt a system-first-approach and neglecting human and task integration in the PMI resulted in several obstacles. The case company focused solely on system integration to realize the most obvious synergies of the different companies. This caused employee resistance and lack of trust and confidence towards managers and their intentions. It also yielded an ungiving and unhelping culture between employees that previously belonged to different companies. This indicates the importance of mixing employees from different companies after the merger. Moreover, the importance of creating cultural-unity under one brand is discussed. The results indicate that there should be a balance between human integration and task integration when merging several companies. Consequently, we present a two-by-two matrix that outlays the dependency of company characteristics on integration focus. Secondly, managers at the case company put too much faith and emphasis on artifacts and systems to change organizational behavior and neglected the perspective of sociomaterialism. This resulted in a failed implementation of the warehouse management system due to neglecting the employees’ perspective and ways of working. As a result, employees developed workarounds to the system and later abandoned the system. Consequently, managers should have adopted a technochange perspective when driving organizational change with IT systems. This means that the implementation of an IT system should be consider in conjunction with employees and their routines.