ABA Banking Journal - October 2009 - (Page 46)
Tech topics ongratulations (and condolences)! You just won a bid to acquire a failed institution. Or perhaps the friendly acquisition of an institution has just been announced by executive management. Either way, you’ve been given a directive to get the two organizations marching to the same beat on the same platform as soon as possible. It’s a daunting task. There are several things that to consider and things to put into place to help ease the hard work of integrating two organizations. Think of them as integration do’s and don’ts. Here are eight of them—applicable to any size bank. DON’T attempt a “merger of equals” Some mergers will be billed by management as MOEs. But as far as IT is concerned, you want to create one bank, not two. The “Best of Both Worlds” strategy is often the worst strategy and brings traumatic destabilization to both banks. An overly democratic process usually inhibits team reconstruction and significantly stretches the timeline as decision making takes too long. Make it crystal clear that someone is in charge and decisions once made are final, as the next point discusses in more detail. Culture change should be guided by where the new, combined bank needs to go, not where it has been. DO establish leadership and governance Someone has to be in charge or the project will flounder. As challenging as it is to get the timing right, sorting out the competing needs of separate and powerful interest groups can be even tougher. Too often banks simply relinquish control to the technical specialists in IT. Not surprisingly, tech specialists focus on the best solutions from an IT perspective. Important business decisions defining the combined bank’s products and services may be based on the ease or difficulty of the technical implementation. In contrast, when business units take the lead, the approach may become overly protective of customers, existing products, or business practices by limiting changes that affect them. This may incur enormous technology costs and use up significant time while just maintaining two status quos. A bank that establishes a strong and active Steering Committee has a high probability of success. This committee directly oversees the creation of a merged bank vision and approves the strategy to achieve this vision. The group makes final decisions on budgets, products, and project scope. To unite the efforts of various constituencies, the Steering Committee includes management representatives from all key stakeholders: business units, product teams, By Paul Schaus, president, CCG Catalyst, paulschaus@ ccg-catalyst.com. Based in Phoenix, the company provides strategic guidance for banks, and other financial services organizations. It specializes in conducting strategic planning and implementing recommended solutions. www.ccg-catalyst.com 46 OCTOBER 2009/ABA BANKING JOURNAL Subscribe at www.ababj.com
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