The research objective is to offer a measurement of a multi-stakeholder perspective to assess
post-merger IT integration. Based on the literature review, we summarize success indicators for each stakeholder (shown in Table 1).
Table 1 Stakeholders’ Measurements about Post-Merger IT Integration
Stakeholder Measurement Indicative references
CEO Achieve cost synergies (Carey, 2000 ; Gadiesh et al., 2002; Gale
& Flinn, 2012; IBM, 2008; Sharma, 2007; Sikora, 2005)
Achieve revenue synergies
(Carey, 2000 ; Gadiesh et al., 2002; Gale
& Flinn, 2012; IBM, 2008; Sharma, 2007)
Increase market share (Carey, 2000 ; Sharma, 2007; Skrill, 2012)
Acquire new technology (Carey, 2000 ; Gale & Flinn, 2012;
Hyong-ki, 2012)
CIO Achieve technology
consolidation
(S. Agrawal, 2010; Curtis &
Chanmugam, 2005; Harrell & Higgins, 2002; Manansingh, 2010)
Achieve operational continuity
(S. Agrawal, 2010; Albayrak &
Gadatsch, 2009; Curtis & Chanmugam, 2005; Honore & Maheia, 2003;
Manansingh, 2010; Zelinger, 2011) Achieve cost savings (S. Agrawal, 2010; Alvarez, Dawson, &
Sen, 2007; Harrell & Higgins, 2002;
Honore & Maheia, 2003; Pratt, 2011;
Shearer, 2004; Zelinger, 2011) Integrate IT within a
desired time frame
(S. Agrawal, 2010; Honore & Maheia, 2003; Pratt, 2011; Shearer, 2004) Business manager Achieve cost synergies (S. Agrawal, 2010; Curtis &
Chanmugam, 2005; Epstein, 2005;
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Kristin et al., 2007) Achieve revenue
synergies
(S. Agrawal, 2010; Curtis &
Chanmugam, 2005; Epstein, 2005;
Kristin et al., 2007)
Customer Service continuity (Bekier & Shelton, 2002; Gadiesh et al., 2002; Sikora, 2005; Thach & Nyman, 2001)
Obtain better deals (Chang et al., 2002; Fee & Thomas, 2004; Sikora, 2005; Thornton et al., 2004)
By analyzing Table 1, we derive the following preliminary findings:
1. We can clearly see that CEOs and business managers focus on the strategic indicators. In contrast, CIOs and customers are prone to care more about operational indicators.
2. The CIO is the stakeholder who is under more pressure regarding cost and time.
3. The CIO is the only one dealing with IT-related issues in both aspect of business processes and IT.
4. To some extent, the CIO and the customer have a common consensus about successful IT integration because the CIO has to achieve operational continuity to provide consistent service for the customers.
Finding the stakeholders’ opinions toward successful post-merger IT integration requires broad and in-depth data collection and analysis. A broad range of data collection builds a generalized
foundation, while the in-depth formulation of stakeholder concerns brings out insights with regard to the post-merger IT integration. To accomplish the goal of collecting data broadly and deeply, this study adopted a cross-case study with second-hand data analysis and in-depth interviews with experienced field experts to attain the best synergy on the studied topic and then reliably and thoroughly verified Table 1.
3.2 Case Selection
We examined the merger cases in the banking industry in Taiwan because this industry has numerous significant merger cases and related investigations and comments. Furthermore, information
technology plays an important role in its daily operation and has a direct impact on competitiveness.
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Due to the fierce competition in the Taiwan banking industry, M&As are taken as a major means for banks to improve operation performance and result in prosperity. From 2002 to 2007, there were 16 merger cases in the banking industry. Undoubtedly, the numbers of bank merger cases will only increase rather than decline, and investigation and study toward the influencing factors is practical and feasible. In conclusion, the banking industry is suitable as the research target of our study. The four studied banks that have experienced M&A in the past five years are as follows:
Bank A
Bank A is one of the largest commercial banks in Taiwan with a capital value of TW$52 billion and 162 home branches, 6 overseas branches, and 5 representative offices abroad. The former bank of Bank A was founded in 1975. In 2003, Bank A merged with another bank’s wholly owned subsidiary by the same financial holding company for the sake of better utility of financial resources. To expand the business scope and market share, it also acquired another bank in 2007. Currently, it is the second credit-card issuing bank in Taiwan.
Bank B
Bank B came into being as a result of the merger of a state-owned bank and a non-state-owned bank on August 21, 2006. The goal was to enlarge the business scale and increase the market share. The non-state owned bank has become a top-notch bank in Taiwan due to its specialization in the foreign exchange, worldwide network of outlets and correspondence banks, superb bank assets, and
excellent business performance. For years, the state-owned bank has made significant contributions to the improvement of the industrial structure and has promoted the industry’s upgrading by assisting in the development of strategic and vital industries in line with the government’s economic policy and development plan. Both banks have been proud of their longtime histories of outstanding track records in our country. Owing to the consolidation, Bank B now has 108 branches at home,20 branches overseas, and 4 representative offices abroad. It has manpower of 5,100 strong and an aggregate paid-in capital of NT$68 billion. It is one of the leading banks in Taiwan.
Bank C
Bank C is an M&A-experienced bank, founded in 1992. It merged with a local bank founded in 1991 and established a financial holding company through a swap/share exchange in Feb. 2002. Until 2010, for the sake of increasing the credit-card market share, Bank C merged the credit-card
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department of another consumer finance-driven local bank, which resulted in an increase of 690,000 newly issued cards. As a result, Bank C became the third credit card-issuing bank with 6500
employees, 97 branches, and paid-in capital of NT$49 billion.
Bank D
Bank D is a subsidiary of a well-known, global bank, which is the leading global financial services company. This bank has approximately 200 million customer accounts and does business in more than 140 countries. To expand its presence and correspond to the relevant financial regulations in Taiwan, Bank D acquired Taiwan’s first non-state owned bank, which was founded in 1961. The acquisition created a combined business with 65 branches and over 5,000 employees. Bank D's long- term commitment to innovative products and services, new industry-practice induction, and financial talents development have been recognized by the Ministry of Economic Affairs as a Best Investment Partner in 2006 and 2008. Bank D’s paid-in capital is NT$66 billion. Currently, it is the fourth credit card-issuing bank in Taiwan.
Table 2 Profile of Studied Banks in Taiwan’s Banking Industry
Bank Bank A Bank B Bank C Bank D
The empirical evidence was collected by interviewing business representatives in the banking field.
Several interviews were conducted to provide an in-depth understanding of each representative’s opinion. All interviews were tape recorded and all sessions were transcribed before the data were
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analyzed. In addition, all interviewees were selected due to their direct involvement in the M&A project. Each interviewee had participated in one to three M&A projects. Our interview questions mainly focused on discovering the representative’s objective opinions and feelings about their post-merger IT integration. Finally, we interviewed 4 IT managers, 3 business managers, and 30 customers. Regretfully, CEOs and CIOs were too busy to attend our interview, so instead of
face-to-face interviews, we collected their personal opinions that were revealed in public as well as the company’s statements as CEOs’ opinions. Fortunately, we were able to interview IT managers.
The IT managers’ profiles are shown in Table 3 and the business managers’ profiles are shown in Table 4. Thirty customers were chosen randomly.
Table 3 Profile of IT Managers
Bank Department Job Title
A Information Management Department IT Manager
B Data Processing & Information Department Senior Vice President C Core Systems Division of the Information
Services Department
IT Manager D Tech Infrastructure Department Vice President
Table 4 Profile of Business Managers
Bank Department Job Title
A Department of Accounting Performance Management Manager
B Junior Manager Office Junior Manager
C Credit Card Division of Credit Risk Management Department
General Manager
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