Wells Fargo CEO John Stumpf is quoted in an InformationWeek article this week as saying IT integration is a "top priority" for the company right now.
You may remember that last year, Wells Fargo bought out financial services company Wachovia, in a much-publicized deal that InformationWeek calls "one of the most closely watched acquisitions in the banking industry." For this company, IT integration isn't just "busines as usual." Stockholders and financial analysts are watching and their success or failure could depend on how well they manage to navigate merging these systems and the related business functions.
And it's a massive project. The article notes that in a typical year, an IT organization "might work on 20 to 30 percent of its software platforms in a significant way." But Wells Fargo-Wachovia will work on approximately 80 percent of its IT systems during the integration.
These reasons alone make it a compelling integration case study for stockholders, business people and those worried about the financial health of the country.
But for IT practitioners facing integrations in the aftermath of mergers and acquisitions, there is a better reason to read this article: The IT leaders involved talk frankly about how they're prioritizing and managing this massive integration project. In particular, they share how Wells Fargo and Wachovia are focusing their integration efforts on the strategic needs of the business.
This is particularly impressive when you consider that IT integration is usually an afterthought during mergers and acquisitions.
Here are four important lessons I took away from their story:
Thanks to their strategic approach to the integration, IT did manage to find some cost-saving synergies. For instance, Wachovia had recently built a brand new data center-so Wells Fargo didn't need to move forward with its original plan to expand its own data center.
Consolidating data centers also paid off when three Hawaiian health care centers merged, according to a recent CIO.com article, "Five Lessons for Consolidating Data Centers At Merger Time." The merge cut the costs of operating data center servers by 25 percent and reduced the time to reimbursements by 40 percent.