Understanding Information Systems Integration Deficiencies in Mergers and Acquisitions: A Configurational Perspective

Abstract

Information systems (IS) integration is a critical challenge for value-creating mergers and acquisitions. Appropriate design and implementation of IS integration is typically a precondition for enabling a majority of the anticipated business benefits of a combined organization. Often, IS integration projects are subject to deficiencies (e.g., loss of the target firm’s business capabilities with expedited integration) that limit value creation. Drawing on a configurational perspective, we reanalyze 37 published case studies of problematic IS integrations and identify the potential deficiencies and how they are produced. Our findings reveal nine causal configurations that together explain deficiency as a consequence of multiple paths of interconnected mechanisms and contextual conditions that drive their actualization. Finally, based on a post hoc analysis of 25 cases where no negative outcomes are reported, we discuss approaches for managing IS integration to avoid realizing the actualization of deficiencies.

Key words and phrases:

• acquisitions
• case survey
• configurational perspective
• IS integration
• merger benefits
• merger problems
• mergers

Acknowledgments

We are thankful to the JMIS guest editors and reviewers, who presented invaluable constructive feedback. We also thank the editors and reviewers of the Practice-based Research minitrack of the 2015 Hawaiian International Conference of Systems Science for their insightful input on an earlier, practice-oriented version of this research. Finally, we are indebted to Charikleia Rapti for her assistance in case-coding and Lynda Kettinger for her copyediting.

Supplemental File

Supplemental data for this article can be accessed on the publisher’s website at http://dx.doi.org/10.1080/07421222.2016.1267516

Notes

^1. Regarding the distinction between “mergers” and “acquisitions,” the literature frequently uses the terms “merger” and “post-merger” to cover both the merger of equals and merger by acquisition in which the parties are nonequal in terms of their size and power. This study uses the terms “acquisition” and “post-acquisition” to emphasize that a particular situation involves a relevant power difference.

^2. Frequently a mix of IS integration strategies is required to enable all business benefits associated with a merger [17, 34]. This has implications for how we constructed our analysis. To determine the origin of a negative outcome in cases with mixed strategies, we backtracked and focused on the IS integration strategy that was portrayed as causing the specific outcome of interest.

^3. IS researchers are familiar with multifinality through an understanding of systems theory. The configurational perspective builds further on the view in systems theory that outcomes emerge by the interactions between elements in the system.

^4. Regarding the countering of contextual conditions, the case material is less comprehensive and would not be rich enough for a formal configurational analysis. Often, the case narratives presented few details about something that was not surfacing as an issue in the case.

Additional information

Notes on contributors

Stefan Henningsson

Stefan Henningsson ([email protected]; corresponding author) is an associate professor at Copenhagen Business School. His research addresses managerial aspects of information technology (IT) in contexts that include mergers and acquisitions, global IT infrastructures, and international trade processes. He has published more than 100 peer-reviewed papers in various journals including Information Systems Journal, European Journal of Information Systems, Journal of Strategic Information Systems, and MISQ Executive.

William J. Kettinger

William J. Kettinger ([email protected]) is the FedEx Chaired Professor at the Fogelman College of Business and Economics at the University of Memphis. His focus is on combining rigor with practical use in his research work, which has appeared in leading journals, including Information Systems Research, Journal of Management Information Systems (JMIS), MIS Quarterly (MISQ), Journal of the AIS, and others. He currently serves as a senior editor of MISQ, serves or has served as an associate editor of various journals, and has served as a guest editor for JMIS three times.