Roman Sandals

May 23, 2008

St. George and the IT dragon

Filed under: business, musing — Craig Lawton @ 3:08 pm

Over the last few months I’ve read a couple articles in the AFR relating to IT spend in M&A activity.

It’s amazing to consider that about half of the business integration costs for the proposed merger between Westpac and St. George will be in IT (0.5 * $451,000,000).

Consider that the Commonwealth Bank is planning on spending $580,000,000 to re-engineer its aging platforms (to me this means cleaning out all the legacy crap), and NAB is looking at doing the same.

A merged Westpac/St. George would be $225,500,000 behind the eight-ball, before it could even contemplate a project of this scale.

Also, to make the merger more attractive, or because of uncertainty, either side could be tempted to put off required upgrades, lay off staff (possibly key staff), and run-down maintenance.

Accenture recently concluded a survey of 150 CIOs and found that poor IT integration was the leading cause of failure to meet the stated objectives of a merger or acquisition (38%).

It makes you wonder if this whole “IT thing” is going to collapse under the weight, and expense, of its own complexity!

Advertisements

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: