Examining Potentials of Building M&A Preparedness
Nilesh Vaniya, Peter Bernus and Ovidiu Noran
Centre of Enterprise Architecture Research and Management (CEARM), Griffith University,
170 Kessels Road, Nathan, Queensland, Australia
Keywords: Mergers, Acquisitions, Post-merger Integration (PMI), M&A Preparedness Building.
Abstract: Enterprises are systems of systems that continuously evolve during their lifespan, be it in a directed or
emergent way. As enterprises are in fact socio-technical systems, this evolution may occur in one or more
specific areas - such as the human / organizational, the technology and / or the Information System that
integrates the activities performed by humans and machines (technology). This paper addresses a special
type of change, brought about by enterprise mergers or acquisitions (M&As). M&As are an important
strategic transformation instrument in the hands of management; however, literature reveals that an
alarming high percentage of M&As do not achieve their declared objectives. In this paper we attempt to a)
demonstrate that the success of such strategic changes depends on several essential and largely overlooked
factors, and b) outline a possible approach of building preparedness for M&As), so as to improve the
chances of success. This paper also presents a retrospective M&A case analysis to demonstrate the types of
potential problems that could have been effectively addressed by anticipatory transformation facilitated by
the proposed preparedness building approach.
1 INTRODUCTION
Enterprises as socio-technical systems are subject to
continuous evolution. In addition, enterprises are
also required to permanently adapt so as to satisfy
the dynamic requirements of the environment in
which they operate. The purpose of the research
reflected in this paper is to demonstrate the
principles and use of a Mergers and Acquisitions
(M&A) Preparedness Building Methodology
(MAPBM) built on Enterprise Architecture (EA)
concepts in order to create and support strategically
important transformational activities.
In order to demonstrate the use of EA in M&As,
firstly we summarize the approaches suggested in
the literature in order to tackle the issues that cause
failures in M&As, the solutions attempted to address
those issues and the current gaps in related theory
and practice. Secondly, we summarise the proposed
MAPBM which aims to support enterprises in
acquiring the necessary systemic properties before
merger/acquisition and thus build preparedness for
the desired type of M&A. Subsequently, we describe
a merger case study and using the MAPBM we
demonstrate how, with strategic intent, a
multifaceted transformation of the participating
organisations could have been performed so as to
achieve a state where the organisation was ready to
perform a strategically attractive merger. Finally, we
summarise the results and outline future work.
2 M&A: PROBLEMS
AND TYPICAL SOLUTIONS
Kumar (2009) categorizes M&As as: horizontal
(also known as ‘mergers of equals’), vertical (where
two or more participants have different position in
the supply chain), and conglomerate. In addition to
this typology, there are other differentiating aspects
when one considers the nature of an M&A – e.g., is
the deal forced or voluntary, do the original
identities of the participants change as a result of the
transaction, etc. Irrespective of the type, M&As can
deliver positive outcomes for the participants. Based
on the goal and the type of the deal, Walter (2004,
pg. 62-77) lists some major advantages achievable
through M&As: market extension, economies of
scale, cost (or revenue) economies of scope, other
operating efficiencies, etc.
Unfortunately, according to recent research
(Rodriguez, 2008, p.65), while the rate of M&As has
199
Vaniya N., Bernus P. and Noran O..
Examining Potentials of Building M&A Preparedness.
DOI: 10.5220/0004418201990210
In Proceedings of the 15th International Conference on Enterprise Information Systems (ICEIS-2013), pages 199-210
ISBN: 978-989-8565-61-7
Copyright
c
 2013 SCITEPRESS (Science and Technology Publications, Lda.)

increased in the recent past, the probability of
achieving the above-mentioned potential benefits
has dropped to less than half (Rodriguez 2008, p.65).
The precise percentage of the deals that fail to
achieve the declared synergies and desired levels of
integration varies according to industry, but is
generally agreed to be greater than 50% (Alaranta
and Henningsson, 2008); (Mehta and Hirschheim,
2007); (Rodriguez, 2008). M&A problems have
been researched from different perspectives and
viewpoints. Next, we summarise the findings of
current literature, with the intent of categorising and
highlighting major M&A issues from an Information
Systems (IS) researcher’s perspective.
2.1 M&A Issues
We reviewed a wide range of M&A literature to
identify typical issue types (or issue categories) that
are believed to have significant impact on the
outcome of M&As. Major issues having the highest
impact on M&A success are claimed to be in the
domains of IS and organizational integration
(Larsen, 2005); (Mehta and Hirschheim, 2007); (Mo
and Nemes, 2009); (Rodriguez 2008); (Schuler and
Jackson 2001). Major M&A issues have also been
highlighted in (Baro et al., 2008); (Chatterjee, 2009);
(Epstein, 2004); (Hwang, 2004); (Larsen, 2005);
(McDonald et al., 2005); (Mehta and Hirschheim,
2007); (Rodriguez, 2008); (Stylianou et al., 1996);
(Walsh, 1989). We identified three issue types
illustrated below:
1) Business Management issues/concerns,
regarding
 Merger motive, expectations and planning,
 Level of Coherency of Integration Strategy,
 IS/Information Technology (IT) Involvement in
M&A planning,
 Organisational integration management.
2) Human Resource (HR) issues, due to the
 Requirement of strong integration team, executive
leadership,
 Need to consider not only general HR issues but
the individual human side of M&A,
 Need for top-down communication of vision,
M&A strategies, and of M&A planning,
 Personnel concerns (such as benefits, retention
and cut-offs),
 Lack of supporting programs, advanced
notification, extended benefits, outplacement
activities.
3) IT and IS issues, resulting from
 IT Attributes,
 IT Integration Management,
 Information and Communication Technology
(ICT) vision,
 Enterprise Systems / Applications integration such
as ERP, SCM, CRM, etc.,
 Data integration issues,
 Technical compatibility.
Thus, most issues in strategic transformations
(and M&As as a special case thereof) fall in three
main categories: Business Management, Human /
Organizational and IT / IS). Clearly, solving only
one type of issues (e.g. HR) without considering the
relationships with the other issue types would be less
effective than expected or may be altogether
ineffective. Hence for any enterprise-wide
transformation methodology we must consider how
to jointly solve these three types of issues.
Note that not all of the above issues can be
addressed in detail during preparedness building in
all circumstances. The ability to address such issues
during preparedness building relies on the ability to
sense their root causes as well as the ability to
respond and control them.
2.2 Existing Solutions
Recent developments in M&A research aimed to
study the reasons of M&A failures and improve their
success rate. As discussed below, most of the studies
focused on a single issue and proposed a solution to
it without considering the relationship/effect of that
solution on other issue types and sources. In our
view, this is due to a lack of a systemic view; hence,
the outcomes of these studies could be in fact
synthesized to develop a comprehensive solution.
Similar to the discussion of M&A issues, M&A
solutions can be structured into three categories:
Business/Operations, HR/Organisational and IS/IT.
During M&A-related transformations, one of the
key business success factors is to maintain business
and IS alignment. To maintain such alignment,
Wijnhoven et. al. (2006) suggests using Henderson
and Venkataraman’s (1993) strategic alignment
model. However, they only concentrate on the
selection of IT-integration methods for a given type
of merger and IT integration objectives. To explain
the process of post-merger integration, Mo and
Nemes (2009) suggest developing the metaphor of
an architectural ‘DNA’ (biological DNA)
inheritance. Using this ‘DNA EA’ concept, they
explain post-merger integration as the inheritance of
DNAs (process, knowledge, control, data, people
and asset) of the involved organizations into the
DNAs of the merged organization. Mo and Nemes
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(ibid.) propose a solution methodology to implement
post-merger integration by treating six DNA
components separately; however, details of how to
integrate those six DNAs are not provided.
Post-merger integration planning needs to
consider the level of integration required: Vernadat
(2007) suggests an categorization framework, based
on the targeted level of interoperability. According
to Vernadat (ibid. p139) for Coordination a Business
level, for Co-operation an Application level, and for
interoperable Communication a Physical System
level integration is required. This model can help
plan the expected level of interoperability and
required level of integration.
Most researchers agree that HR issues are
complex to resolve and have high impact on the end
result of M&As deals. The majority of HR issues are
caused by the anxiety and low degree of bottom-up
participation and involvement in the transformation
process, consequently Rodriguez (2008) highlights
the critical importance of top-down communication
and bottom-up participation during M&As. To
address other HR issues, Schuler and Jackson (2001)
suggest a three-stage HR integration model (pre-
combination, combination and solidification). Their
model covers major HR activities, strategies and
planning for successful post-merger integration.
They consider strategic HR concerns such as cut-
offs, retentions, promotions and communication
during M&A transformations. Although some of the
practitioners and researchers suggest the idea of
unfreeze-transform-freeze as a solution; such
simplistic concepts are highly criticised for not
considering emergent issues (such as those brought
about by the dynamicity and complexity of the
change process, inabilities of change leaders and
inefficiencies of micro level linear planning (Lauser,
2009)) and also for the unrealistic view of human
resources as a commodity by the HR community
(Dooreward and Benschop, 2003). Recent research
in HR also advocates the strategic role of HR in
enterprise-wide change endeavours (Bhaskar, 2012).
Unfortunately, the impact of the decisions made to
resolve HR concerns on IS and Business integration
is not addressed in the proposed model (ibid.); thus,
the validity of these suggestions remains unclear.
Although the planning of post-merger integration
is considered vital and complex, the need for careful
planning is still often neglected during the pre-
merger phase (Larsen, 2005). Larsen (ibid.) suggests
a model to create an ICT vision for the M&A; such a
model enables considering ICT integration during
pre-merger planning. Bannert and Tschirky (2004)
suggest an integration planning model for IT
intensive M&As. According to their explanation,
technology integration should cover various IS
components such as enterprise applications,
platforms (including operating systems,
communication, security, and database systems).
Giacomazzi, Panella, Pernici and Sansoi (1997)
suggest a model of post-merger IS integration and
provide a list of options available (Total Integration,
Partial Integration, No Integration and Transition)
for a given computer architecture and software
architecture. In addition, they provide a descriptive
model in order to explain how to implement each of
the IS integration options. With the wide use of ERP
systems, it is also necessary to develop an
Application Integration Strategy; Eckert, Freitag,
Matthes, Roth and Schilz (2012) provide a
methodology for this, based on the type of M&As
and the aimed synergy. To better understand post-
merger integration, Mehta and Hirschheim (2007)
suggest an IS Integration decision making
framework that to guide decisions for Post-merger
integration. The framework is based on the strategic
alignment model (Hirschheim and Sabherwal, as
cited in Mehta and Hirschheim (2007)).
Ross, Weill and Robertson (2006) suggest that
the level of business process integration (sharing
data across parts of the organization, and therefore
requiring business data integration) and the level of
business process standardization (use of uniform
business processes across the organization) can
decide an operating model for the organization.
They (ibid, pages 29-39) suggest a framework to
differentiate four operating models, based on the
level of business process integration and business
process standardization. It appears that an operating
model can be decided based on the choices made for
business process integration and standardization,
technology- and organizational integration, and
making strategic choices based on this model can
guide further M&A implementation.
It seems that none of the solutions outlined above
are able to address all the issues or to consider the
impact on and/or relationships with the other issues.
In addition, the models and theories noted above
focus on individual aspects of M&A, and results
documented in the current literature need to be
synthesized in order to adopt a comprehensive
approach for solving M&A issues in concert.
2.3 Gaps in Theory and Practice
In their review of the last 30 years of M&A
literature, Cartwright and Schoenberg (2006) found
that M&A research is still incomplete.
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Based on our own survey, major gaps in M&As
research can be summarised as follows:
 Lack of a multi-disciplinary approach (Cartwright
and Schoenberg, 2006, pg. 5);
 “the study of M&A desperately needs a new
perspective and a new framework for analysis”
(Epstein, 2005, pg. 37);
 Need to consider the emergent nature of M&A
(Lauser, 2009);
 Lack of agile, flexible, quick-responsive
framework suitable to M&As’ complexity (Mo &
Nemes, 2009);
 Lack of Systems approach (Mo and Nemes, 2009,
pg. 4; Larsen, 2005; DiGeorgio, 2002), whereupon
a systems approach would provide a unified
framework that able to represent the range of
problems that arise from the transformation of two
systems into a single system
3 THE SYNTHESIZED
SOLUTION: M&A
PREPAREDNESS BUILDING
From the above discussion it is clear that a systems
approach is required to address the high failure rate
of M&As. It is unlikely that once an M&A deal is on
the horizon there will be sufficient time to perform
groundwork and planning for post-merger
integration to address relevant problems.
Therefore, the management of an organization
should consider preparing the enterprise for such
types of transformation before any concrete M&A
deal is considered. This is to ensure that the
organisation has the right capabilities and systemic
properties (such as flexibility, agility, etc.) required
to perform post-merger integration tasks. We
therefore recommend a preparedness building
program for organisations that want to consider such
strategic moves as future options.
The discussion below presents the proposed
timing of preparedness building (in contrast to the
conventional view of the M&A process) and then
outlines the actual process of preparedness building.
3.1 The M&A Process
Based on the discussion of M&A problems, it is
evident that individual solutions addressing issues
independently are neither feasible nor optimal.
Unfortunately, at the time an actual merger or
acquisition is considered, there is typically not
enough time to spend on comprehensive planning of
post-merger integration. Thus, there seems to be a
contradiction between having to make fast decisions
to seize the opportunity and the need to perform
comprehensive planning.
To solve the above problem (as described in
detail in Vaniya (2011) and shown in Figure 1), we
could consider desirable life trajectories of an
enterprise prior to having actual merger or
acquisition plans. Therefore, instead of using the
conventional view of a three-stage M&A process
(Pre-merger, Merger and Post-merger) we introduce
an additional M&A preparedness building stage.
During this stage, some groundwork can be
completed to better position the enterprise, so that by
the time an opportunity is sighted, the enterprise is
in the position to quickly make necessary decisions
and finalise comprehensive integration planning. We
call these activities ‘preparedness building’. They
aim to achieve the acquisition of important systemic
(system level) properties such as flexibility, agility
and interoperability as enablers of future
transformations
Preparedness
Building
Operation Company A
Operation
Company A
(Prepared for
M&A)
Pre-
Merger
Stage
Merger
Day
Operation Company B
Post-Merger
Integration
Stage
Operation Company A
Merged Operation
Stage
Time
OperationalStages
Figure 1: Preparedness Building in M&A Process.
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3.2 The M&A Preparedness Building
Methodology and the
Transformation Process
In the following, we shall demonstrate how to
conduct the Preparedness Building stage shown in
Fig. 1. For this purpose we employ a high-level
three-step reference methodology Vaniya and
Bernus (2012), as follows:
 Step 1: Identify Enterprise entities;
 Step 2: Show the role of each entity in the
preparedness building transformation;,
 Step 3: Demonstrate the relative sequence of
transformational activities, using life history
diagrams.
Step 1 identifies the participating enterprise
entities. They can be existing entities (for example
existing Management team, business units, affected
business processes, IT infrastructure, etc.)
contributing to building preparedness or can be
additional entities required in building preparedness
(for example Preparedness Building Strategic
Program, Gap Analysis Project, Business-, HR- and
IS- Preparedness Building Projects, etc., or even
strategic partners).
Step 2 shows the role of each entity in the
preparedness building transformation. Various
graphical models can be used for this particular step;
we have chosen the so-called ‘dynamic business
models’ proposed by the IFIP-IFAC Task Force
(1999) showing the role of each entity in other
entities’ lifecycle phases.
Step 3 attempts to demonstrate the relative
sequence of transformation activities. This step
follows the previously identified roles of each of the
entities; based on those roles, we first identify
activities to match entities’ responsibilities and then
we establish their relative sequence using so-called
‘Life History Diagrams’ (see section 5.3).
Note that MAPBM aims to serve as a reference
model, with the details and approaches of each step
being adapted to meet the specific business needs,
management decisions and current business
scenarios.
4 CASE STUDY: THE MERGER
OF TWO TERTIARY STUDY
INSTITUTIONS
4.1 Background
Faculty F within university U contained several
schools, with schools A and B having the same
profile. School A is based at two campuses situated
at locations L1 and L2, while school B is based at a
single campus, situated at location L3 (as shown in
the AS-IS state, see Figure 2). Historically, the
schools have evolved in an independent manner,
reflecting
the local specific educational needs and
a) Dean F and HOS MS are
distinct
b) Dean F is also HOS MS
c) HOS MS is one of the DHOS,
nominated by rotation or Pro-
Vice Chancellor
Legend:
F: Faculty
=======================
A…D: schools within F
L1.. L3: physical locations
=======================
SMP: Schools merger project
=======================
VS: Virtual School (VO)
=======================
HOS: Head of School
DHOS: Deputy HOS
PA: Personal Assistant
SAO: School Admin Officer
=======================
L1
L2
C (L1)
B (L3)
D (L3)
F
A
F
MS
L1 L3
AS-IS
TO-BE
L2
SMP
Dean F
HOS MS
DHOS L2
DHOS L1
DHOS L3
Organisation:
One F Dean, one HOS of MS and
a DHOS on each MS campus
a)
b)
c)
c)
a)
c)
HOS C HOS D
PA
PA
PA
PA
SAO
SAO%
SAO
PA
Selected org. model
D (L3)
C (L1)
Figure 2: Rich picture of AS-IS and possible TO-BE states (incl. organisational scenarios).
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demographics. This has led to different
organisational cultures, HR and financial
management approaches. For example, school B
enjoyed a large international student intake
providing funds that supported heavy reliance on
sessional (contract) staff for teaching and wide
availability of discretionary funds. In contrast, staff
in school A had a larger teaching load and had less
funds available due to a smaller student intake.
Staff profile level between schools was
significantly different (i.e. less high-level positions
at school B). Course curriculums also evolved
separately in the two schools, with similarly named
courses containing significantly different material.
Thus, although of the same profile, and
belonging to the same F and U, schools A and B
were confronted with a lack of consistency in their
profiles, policies, services and resources. This
situation caused additional costs in student
administration and course / program design /
maintenance, unnecessary financial losses as well as
staff perceptions of unequal academic and
professional standing between campuses, all of
which were detrimental to the entire faculty.
Therefore, the management of U and F have
mandated that the problems previously described
must be resolved and have defined the goals of
schools A and B becoming consistent in their
products and resources strategy, eliminating internal
competition for students and being subject to a
unique resource management approach. As a
solution, it has been proposed that the schools
should merge into a single, multi-campus Merged
School (MS in the ‘TO-BE’ state in Fig. 2). The
unified MS management and policies would
promote consistency in the strategy regarding the
products delivered and the resources allocated to its
campuses.
After further consultation, the Heads of the
participating Schools have set an organisational goal
allowing the individual campuses to retain a
significant part of their internal decisional and
organisational structure after the merger, perhaps
with an added higher layer of an overall governance
structure. This structure was supported by the HR
department as the simplest to implement and least
painful transition-wise.
From the point of view of Information Services,
the proposed merger presented the opportunity to set
the goal to unify and streamline software and
hardware deployments across campuses.
The business aspect of the merger goals
concerned the elimination of internal competition
(with the potential of increased enrolments and
income) and a unique merged school image that was
more attractive and less confusing to the national
and international prospective market.
4.2 The Results
The Merged School Project has succeeded, albeit
with some difficulties. The decisional, functional,
information, resources and organisational models
created during the merger have helped significantly
to understand the present situation and to select an
optimal future state. The use of languages easy to
understand and able to manage complexity has
resulted in stakeholder buy-in for the project and
middle-management consensus on the essential
aspect of the future Merged School.
Unfortunately however, most modelling and
mappings (including the pre-merger AS-IS
situation!) occurred during the merger project rather
than before; thus, there was insufficient time to
achieve appropriate detail modelling. This has led to
the ‘devil in the detail’ situation: the human
resources allocated to accomplish the merger and
post-merger integration tasks were unable to do so
appropriately due to the lack of proper
understanding of what needed to be done.
In addition to their inappropriate granularity, the
available models were only partially applied. For
example, an organisational model showing changes
in roles and decisional framework in the transition
from the AS-IS to the TO-BE states was
implemented only at the top layer due to the lack of
time and proper preparation. As a result, the new
Head of the Merged School had to spend significant
amounts of time ‘putting out fires’ (finding short
term solutions to re-occurring product / resources
imbalances). Thus, unfortunately the interventionist
and turbulence issues outlined in the pre-merger
(AS-IS) organisational and decisional models were
not effectively addressed.
Staff consultation has taken place; however, a
significant amount of feedback never translated into
changes to the proposed organisational model. This
has reduced the level of acceptance among staff.
Importantly, the detailed process modelling was
never completed and as such the implementation
went ahead without detailed models and guidance, in
a ‘cold turkey’ manner (i.e. overnight changeover)
resulting in a state of confusion as to ‘who does
what, now’ lasting several months and affecting both
staff and clients (students) In other words, there was
little attention given to post-merger integration.
On the positive side, the Merged School did
achieve a unique image, and in time reached an
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increased level of integration and consistency across
campuses and more efficient resource management.
4.3 Lessons Learned
To sum up, there were a few lessons learned from
the successes and short-term failures of this project.
To start with, such a project needs an enduring
‘champion’ in an authoritative management position
in order to back the project for its entire duration.
The modelling processes involved in M&As
must start early; ideally, a reference model
repository should be built in advance and constantly
enriched based on each merger post-mortem. Some
human-specific processes (such as trust building,
negotiations etc) cannot be rushed and thus,
preparedness is key.
The detailed design and implementation phases
of M&As must be properly planned for and
performed. Especially when organisational changes
involving human aspect are involved, suitable detail
must be provided so that people understand their
new/changed roles. Feedback from stakeholders
must be gathered, refined and incorporated in the
final models, being crucial in post-merger
integration.
5 APPLYING
THE PREPAREDNESS
BUILDING METHODOLOGY
Preparedness can be built for announced and
potential M&As. Here the merger partners were
known, therefore this is a case of preparedness
building for an announced merger.
Out of the three categories of issues (as outlined in
section 2.1), major issues presented by the case
study are Business and Management and Human
Resource issues. IS / IT issues are limited to the
challenges in achieving consistency in the way IS
and IT are managed for the involved schools.
Therefore, the aim of preparedness building could be
the following:
 Identify obstacles to the transformation and
implement appropriate preventive actions;
 Plan for post-merger integration based on the
expected outcomes;
 Prepare a Post-Merger Integration (PMI) Plan and
an Integration Strategy
 Involve key stakeholders (both schools’
management, administration and academic staff) in
the preparedness building activities
5.1 Step 1: Identify Enterprise Entities
From the discussion of the case study, the entities
affected by preparedness building are the Heads of
Schools (HOSs), academic and administration Staff,
students, services, technical infrastructure and
Information Services.
Preparedness building requires a strategic
program typically governing several projects
covering the proposed organisation-wide change,
running for extended periods. A possible list of the
program and projects involved is: a Preparedness
Building Strategic Program (PBSP), a Business
Preparedness Building Project (BPBP) and a HR
Preparedness Building Project (HRPBP). In practice,
the list of enterprise entities is negotiated between
the project / program managers, key stakeholders
and the relevant governance body.
5.2 Step 2: Show the Role of each
Entity in Preparedness Building
Transformation
The next step is to show how the identified entities
will interact with each other to conduct the
preparedness building transformation. This can be
achieved by developing so-called ‘dynamic business
models’; the models applicable to the case study are
shown in Fig. 3 and Fig. 4. It should be noted that, in
these models, each ‘relationship’ is considered a
contribution of an entity to another entity’s lifecycle
activities; According to ISO 15704, for each
relationship the acting entities would typically use
available reference / partial models to create the
design solution for their particular target entity (see
Appendix A).
Figure 3 shows the role of existing entities in
establishing the required program and project
entities. The management at the University and
Faculty levels in consultation with HOSs of schools
A and B decide to prepare for upcoming M&As.
Therefore they decide, identify, conceptualise and
specify the requirements (mandate) of the
Preparedness Building Strategic Program (PBSP),
structure a strategic management team, and provide
the basis for a master plan of the program
(Relationship 1). Potentially, PBSP management can
be made up of both HOSs, with one of them being
the Program Manager, and key staff of all two
schools in addition to members from University and
Faculty. From here on, PBSP management is
responsible for the design and implementation of
PBSP. In the detailed design, program management
designs the program team, and plans their tasks. This
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planning follows a project-based design to develop
the detailed design of the program (i.e. to identify
projects, their tasks and prepare a mandate for each
project) (Relationship 3); in doing so, the Program
Management Team also seeks the guidance of all
staff of two schools (Relationship 2).
U
1
Staff
A, B
HOS
A, B
F
PBSP
2
3
BPBP
4
6
HRPBP
5
7
8
Legend
U: University HOS: Head of School
F: Faculty A,B: Two schools
PBSP: Preparedness Building Strategic Program
BPBP: Business Preparedness Building Project
HRPBP: HR Preparedness Building Project
Figure 3: Establishment of Preparedness Building Program
& Projects.
For the identified change activities, the PBSP
defines two separate projects which can be called
BPBP (Business-) and HRPBP (HR-) Preparedness
Building Projects with BPBP being the governing
project to maintain the strategic alignment during the
transformation. The PBSP program team identifies
conceptualises and specifies the mandate of BPBP
(Relationship 4) but only identifies and
conceptualises HRPBP (Relationships 5). This is
because HRPBP’s mandate will have to be defined
by the BPBP (Relationships 7). Relationships 6 and
8 represent the self-designing and re-engineering
capabilities of BPBP and HRPBP respectively.
Figure 4 shows the preparedness building
changes initiated by PBSP, BPBP and HRPBP. The
role of PBSP is to govern and monitor the progress
of M&A preparedness building, and the operations
of BPBP as well as HRPBP. BPBP is responsible for
planning and implementing preparedness building
(key tasks: Gap Analysis, Requirement
Specifications, preparing mandates for HRPBP, plan
for business processes & product integration,
improve consistency in current operation). The role
of HRPBP is critical for our case, as HRPBP would
be responsible for preparing staff for the merger,
achieving consistent organisational structure and HR
management practices across the campuses.
Starting with the operation of BPBP, the BPBP
identifies necessary changes at the HOS level to
achieve consistency in managing schools, their staff
and products (Relationship 1). HOSs are the leaders
for their respective schools and they are also part of
the PBSP team, therefore it is necessary to first
implement changes at their level. Such initiatives
reflect that preparedness building has executive
management’s commitment and support.
Similarly, the HRPBP, with the help of BPBP,
suggest equivalent changes for the staff such as
preparing staff for future organisational structure
(Relationship 2). Key transformational activities
may involve identifying and categorising roles that
would become redundant, remain unchanged and
any new roles required after the merger. This would
also require changes into the staff structure and
organisational processes. For example, for a course
offered at multiple campuses we might need a new
role such as Primary Course Convener supervising
(existing) Campus Conveners. In addition these
smaller teams must plan for possible changes into
designs and structures of their respective courses and
should come up with an integration plan for their
respective courses/programs. To reflect such major
changes into organisational structure, the schools
also need to identify changes in current reporting
mechanisms, communication methods, promotion
arrangements. Another major task for HRPBP would
be to plan, initiate and continuously foster the
culture change. Cultural change would be critical for
transforming two competitive teams into a
collaborating one and prevent residual ‘us and them’
feelings that normally result unplanned/unsuccessful
cultural integration. If needed, arrangements should
be available to transition/support the students
affected by the school merger (Relationship 3).
Staff of the two schools must make necessary
changes to their products (Relationship 4). Based on
guidelines from BPBP, major transformational
activities are to analyse the designs of degrees, the
structures and contents of courses, and plan for
making the products consistent across the campuses.
To manage resources effectively, HOSs need to
identify a way to manage and maintain resources in
a unified way. Therefore they must identify and
changes current resource arrangements (Rel’ship 5).
Staff and HOSs of all schools must suggest changes
to existing Technical Infrastructure and IT
Applications/Services, particularly to support post-
merger planning of integrating products.
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PBSP
BPBP
HRPBP
U
F
1
HOS
A, B
2
Staff
A, B
Products
A, B
Resources
IT Applications
/Services
Technical
Infrastructure
4
5
6
7
8
9
10
3
Students
A, B
Figure 4: Transformational Initiatives in Building Preparedness.
After PMI, support is needed for cross-campus
communication and resources sharing. Such changes
support the organisations in preserving the
established M&A Preparedness (Rel’ship 6 & 7).
While making all the precautionary changes in
the current arrangements, BPBP and HRPBP teams
may identify relevant changes at the Faculty and
University levels to maintain the strategic alignment.
Such changes could be in the current policies and
principles, reporting systems, management and
controlling procedures. As noted by Mcdonald,
Coulthard and Lange (2005) such changes in
existing strategy are required for an effective M&A
implementation. Therefore BPBP and HRPBP can
inform the PBSP team about such changes
(Relationship 8). In turn PBSP team recommends
those changes to the Faculty and University
Management (Relationships 9 & 10).
Changes will then be proposed to U&F, which
may approve (or not); nevertheless, they must reach
consensus that can maintain strategic alignment
between M&A strategy and corporate goals, and that
of the Business, HR and IS strategy for M&A
Preparedness building.
In this discussion we have argued that a possible
Preparedness Building Exercise can be planned to
achieve basic systemic properties/design properties,
so that change can become a natural and dynamic
exercise rather than the occasional forceful
imposition on the organisation. In this case study,
there were no explicit shared representations of
processes (in a formal enough manner), which
would have allowed to define the new processes
needed by the merged organisation. Preparedness
building would have entailed the development of
explicit and shared process models. As no resources
were allocated to perform the necessary modelling
even after the merger, the distributed operation of
MS was affected by process inefficiencies.
5.3 Step 3: Demonstrate Relative
Sequence of Transformational
Activities
Finally, once the mandate of preparedness building
transformation is finalised, it is important to identify
the detailed activities that must be performed as well
as by whom and when.
For this particular step we have used so-called
‘life history’ diagrams (c.f. ISO 15704), that show
entities and their lifecycle phases on a vertical axis
and time on the horizontal axis. Such diagrams show
major milestones and then may become the basis for
project management charts (such as Gantt). As
explained in Vaniya and Bernus (2012), MAPBM is
developed based on EA concepts using GERAM
(IFIP-IFAC Task Force, 1999, ISO/IEC, 2005).
Figure 5 presents an extract from the set of life
history diagrams developed for the case study. In
such diagrams we can also show the concurrent
activities such as activity 3 as shown in Fig. 5.
ExaminingPotentialsofBuildingM&APreparedness
207

I
C
R
AD
DD
B
O
D
U
I
C
R
AD
DD
B
O
D
F
I
C
R
AD
DD
B
O
D
HOSs
I
C
R
AD
DD
B
O
D
Staff
I
C
R
AD
DD
B
O
D
PBSP
I
C
R
AD
DD
B
O
D
BPBP
I
C
R
AD
DD
B
O
D
HRPBP
1
1
2
2
No Mi Description
3A,
3B,
3C
The strategic management team identifies PBSP and
develops the concept, tasks and the master plan of
the program.
3 The strategic management team have prepared the
program master plan as an opportunity building
program proposal including a draft of the business
plan which covers the estimated time, risk and
resources
4 The strategic management team submits the M&A
PBSP proposal to U.
4 The PBSP proposal has been approved in principle by
U.
3A
3
4
4
3B
3C
Abbreviations
U: University F: Faculty HOSs: Heads of Schools PBSP: Preparedness Building Strategic Program
BPBP: Business Preparedness Building Project HRPBP: HR Preparedness Building Project
The Life History Diagram of the M&A
Preparedness Program
• Numbered arrows represents events (No.)
• Numbered triangles represents milestones (Mi)
Time
Entities and their Lifecycle Phases
Figure 5: An example of Life History Diagram for Preparedness Building.
6 CONCLUSIONS AND FUTURE
RESEARCH
The paper has reviewed three categories of issues
that are commonly considered the reason for high
failure rates for M&As. Using a systems view of
enterprise transformation (based on an EA
approach), we have identified a contradiction
between the need to address post-merger integration
planning in detail and the usual time pressure when
an M&A deal is considered.
Our main contribution is that we proposed a
solution called ‘preparedness building’, that allows
enterprises to consider M&As as strategic possibility
(even if not actual yet), and determine what systemic
changes are necessary in the three categories
(business, IS / IT and HR), so that the organisation
can develop flexibility in these areas. To achieve
such preparedness building requires strategic
initiative and organisational change. Given the
complexity of this transformation we used an
Enterprise Architecture approach to demonstrate
how a simultaneous transformation of business, HR
and IS/IT aspects can be orchestrated to achieve
M&A preparedness as a systemic property of the
enterprise. We have also discussed a case study, and
what areas could have been addressed by the
proposed preparedness building methodology, so as
to improve the speed and efficiency of the Merger
that was eventually completed.
The proposed M&A Preparedness Building
Methodology could be evolved into a Preparedness
Building package aiming to improve M&A success
rate by addressing the root causes of issues, so that
an enterprise is ready for M&As and similar
enterprise-wide change endeavours. It is also
important to have a mechanism to determine
whether the organisation is ready for the desired
type of M&A. Based on such a determination, a
prescriptive list of activities can be provided as a
roadmap towards building preparedness for the
desired type of M&A. Therefore, research is in
progress to develop the checklist of key M&A issues
and their solutions, define the state of M&A
Preparedness in terms of systemic properties and
develop an optimal list of M&A Preparedness
Building Activities for different types of M&As.
For the above goals, a mixed-method research
will involve an international survey and follow-up
semi-formal interviews to consider industry response
to the M&A Preparedness Building Methodology
development. The results of this research will also
be verified by an expert panel consisting of M&A
practitioners and researchers.
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APPENDIX A
Some Basic Ea Concepts
Some concepts of Enterprise Architecture (EA) as
defined in GERAM (a standardized generalization of
EA framework concepts IFIP-IFAC Task Force
(1999) and ISO 15704), are explained below.
Enterprise Entities: GERAM defines the concept
of Enterprise Entities (EEs) through exemplification.
EEs are managed / controlled systems that have a
mandate or purpose. One can categorise entities
according to how they contribute to the life of other
entities. For example, Strategic Enterprise
Management Entities may create Change
Programmes, Change Programmes may create
Change Projects, these in turn may create or change
Business Units, which in turn may change or create
Products etc. (GERAM calls these ‘recursive’ type
definitions).
Lifecycle: GERAM defines the concept of life cycle
as an ordered list of activity types (or functions) that
consider an entity on various levels of functional
abstraction. (I.e. the ordering is based on one
function’s output constraining the next function’s
input). This ordering is not temporal (because
feedbacks exist among life cycle activities). ‘Life-
cycle phases’, or ‘life cycle activity types’
associated with the life of an entity shown in Figure.
Life History: The life history of an entity is the
representation in time of life cycle activity instances
carried out on the particular entity during its entire
life span (IFIP-IFAC Task Force (1999) and ISO
15704). In a sense by building the life history
diagrams of all involved entities in an organizational
change effort, one can describe all required
organizational processes and operations to carry out
that organizational change. Interestingly such life
history diagrams can help to anticipate and
systematize the operational structures of processes;
for example, identification of all involved processes,
prioritization of those processes, identification of
sequence of processes, identification of parallel
processes, etc. At any moment in time multiple
activity instances may be active on the same entity,
in parallel.
Viewpoints: Viewpoints (originally called views in
GERAM 1.6.3) are categorized in GERAM’s GERA
‘modelling framework’, and represent types of
models which may be created at various levels of
abstraction to answer various concerns about the
Enterprise Entity. These types of models may be
categorized according to Model Content, Entity
Purpose, Entity Implementation and Physical
Manifestation. The following discussion briefly
explains these four types.
Figure 6: GERA Modelling Framework with Lifecycle Phases, Viewpoints.
Source: (IFIP-IFAC Task Force (1999) and ISO 15704)
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