Integrating information technology divisions in a bank merger Fit, compatibility and models of change

Abstract Effectively integrating the information technology (IT) divisions in mergers of large organisations can be critical to merger success. This paper analyses a case study of IT integration in a merger of two large Australian banks, and argues that an understanding of organisational and strategic fit at the level of the IT organisation can contribute to effective management of IT integration. The paper explores the fit within and between two organisational configurations of IT, and the dynamics of their integration. We discuss the contingencies underlying use of different models of IT integration, and suggest that ‘best of breed’ prescriptions may be inappropriate when the IT configurations of merging organisations are incompatible. In which case, an ‘absorption’ strategy can simplify a multi-dimensional misfit and reduce integration complexity.

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