W e live at a time of great corporate change. World-famous brands and household names are disappearing almost overnight as a wave of "merger mania" sweeps the business world. This was highlighted by a recent article in BRW which quoted a survey undertaken by the Conference Board, the leading trade union for US companies. The survey found that 62 per cent of senior business executives predict an increase over the next six months in the number of initiated, announced or finalised mergers and acquisitions by their company.
Hand-in-glove with the phenomenon of globalisation, there is a growing internationalism to these business marriages. Forty-four per cent of the executives interviewed forecast a rise in the number of cross-border mergers.
Neither is the public sector immune from these trends. The name, shape and responsibilities of government instrumentalities seem to change with each new political cycle.
No person in an organisation feels the brunt of a merger as much as the CEO.
Heidrick and Struggles, the executive recruitment company, recently polled 656 worldwide CEOs to ascertain the three main tasks confronting them. In marketplace issues industry consolidation was third, with 41 per cent of CEOs nominating it as a major challenge. In management issues managing mergers/acquisitions/alliances was ranked second with 30 per cent of CEOs identifying it as one of the three main issues for them.
Clearly, these high rankings reveal the difficulty of digesting another organisation. Nowhere is this more apparent than in the IS environment.
Different computer environments need to be integrated. Processes need to be standardised. Operations need to be consolidated. Data definitions need to be agreed and data from disparate systems cleansed of inconsistencies. For the CIO these technical demands can take years to overcome while, at the same time, the "softer" people issues of change management must be addressed.
Given the magnitude of these tasks I was intrigued listening to a recent breakfast seminar on rules based processing. The guest speaker at the event was the founder and CEO of the sponsor company. As a former chess master he had come to see that business, like chess, was governed by a series of rules which, when invoked, facilitated outcomes. He advocated that business systems through his software could be translated into hierarchies of rules which interface to, but sit above, the business systems. Therefore, when the business changes all that needed to be done was to modify the rules rather than the systems.
Nevertheless, he viewed his software as a CRM solution. It enabled a business to define rules relating to customer transactions which then allowed the organisation to respond more swiftly when milestones were passed. These rules also generated response workflows that emanate from the transaction. I left the seminar thinking that this might also offer significant advantages for organisations needing to weld different companies together. I cannot help feeling that it is the "bend me, shape" me capability of rules-based systems that will offer the greatest appeal for today's generation of CEOs and CIOs.
Peter Hind is the manager of User Programs, which includes InTEP, at IDC Australia