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Wednesday, 21 May 2014 01:16 - - {{hitsCtrl.values.hits}}
An informal organisation is important since within a formal structure there is an informal organisation happening. In some places both work together and there is synergy there itself. So when it becomes two organisations, it becomes two formal and informal organisations. One has to be mindful of the fact that informal organisations in some places are very strong. You have to take it in a positive manner.
So if the merger has to work, firstly the HR has to merge and that means both formal and informal organisations will have to work together to gain the synergy.
The second is that there are opinion leaders and opinion seekers in an organisation. Lucky is the CEO who happens to be an opinion leader as well. But it doesn’t always happen that way, so again, people who are doing the merger will have to appreciate the fact that there are opinion leaders in the organisation. So make them work for you rather than against you.
The third is the communication itself. To what extent and what time is critical. To what extent are you going to divulge information and where do you stand in front of the senior staff, as well as others? It is important we handle that right from the beginning. The critical information has to be discussed at the correct level at the correct time. You need to also be careful as to how you are going to handle branding since a lot of change is going to happen to it in the next couple of years. When the merger process continues, lot of names will disappear and lot of names will come in. How within that total sphere of the branding are you going to maximise your brand is also very important to think about.
Union Bank of Colombo Director/CEO
Anil Amarasuriya
Once you have chosen your partner or partners, you will have to do a lot of re-engineering. Do not look at tomorrow but look 10 years ahead. Look at what you are going to achieve based on the strategy and what you want to do in the five to 10 year horizon. In doing that it is important to get your structure right.
Get outside experts to come in and do the structure for you. And after they do the structure from ground zero, the two teams will have to sit with these experts and modify the structure somewhat, but not to meet their own liking. So the structure is very important. After you do the structure then you will have to think of fitting in your staff and the other institution into that structure.
The next most important thing is the IT systems. I don’t think there is any bank or finance company that is not using technology today. Manual ledgers are all gone and everybody is on high-end technology. Now, to merge that technology is a big challenge, so you will have to get outside experts to come and see whether the technology, software systems, and hardware can be used in the merged entity, or whether you have to discard everything and buy new systems with new hardware.
Whatever you do, it will take time because system migration normally is done once in 10 years. It will be difficult to do the system integration and then stabilise the system. So you have to plan for a 10 year horizon. Get outsiders to come and tell you if the software is good enough for the merged entity and good enough to take you 10 years forward; or to say that the software and hardware are not good and to get new ones. That is a huge cost, it is not cheap. And whatever has already been invested has to be written off. That will have to be built in when doing the valuation. So the software and hardware integration and the structure with the staff are very important.
Also be mindful that immediately after any merger there is lot of unforeseen tinkering and fine-tuning that will have to be done. Get a separate team to do that so you can clear the merger issues that will crop up from the time you start the merger process.
