Information Technology Integration after Merger: AUSPOST and TOLL Case Study Report
AUSPOST AND TOLL: ROADS TO RICHES
This project comprises 60% of the assessment for this course and is to be completed as an individual assessment and treated as a Take Home Exam. No group work is to be conducted or submitted.
Note that wherever possible you should try to support assertions and judgements you make, or opinions you express, with references to appropriate literature (not only from your textbook and/or lecture presentations or other material provided during the conduct of the course, but from quality journals and textbooks).
You have been appointed by the AUSPOST Board as an IT integration consultant to provide advice and guidance on the proposed merger between AUSPOST and TOLL (IT related aspects only).
AUSPOST is facing an information systems integration cost of more than $225 million in an attempt to reduce IT operating costs by over $75 million per annum as part of the proposed merger. The merger could take the form of: (i) a full acquisition with TOLL becoming an ‘intimate’ operating division of AUSPOST; or (ii) a merger of equals with AUSPOST and TOLL integrating their divisions (ie, mail services, contract parcel delivery, domestic logistics, international logistics, freight forwarding, logistics centres operations).
It is expected that, as part of the merger, the annual IT savings at TOLL will range between $25 – 35 million per annum. The total cost of the merger is likely to approach $335 million, so the IT integration aspects are significant, and will be critical if the merger is to succeed. Both firms have reasonably current core business systems that will, nevertheless, require a substantial integration effort.
Aspects of the IT Integration
IBM supports AUSPOST and Accenture supports TOLL IT operations. In fact, IBM holds a 4-year, $2 billion contract for outsourced IT support services at AUSPOST. IT support services must be merged under the new organizational structure.
Interestingly, AUSPOST is SAP-centric (mainly SAP R/6 for ERP) and TOLL is Oracle-centric (mainly Oracle e-Business Suite for ERP) but have similar suites of operating systems (eg, MS Windows, z/OS, iOS, android), databases (eg, SAP, IBM DB2, and Oracle), customer management technology (eg, SAP CRM, Oracle-Siebel Systems), business intelligence (eg, Oracle and IBM-Cognos), and security products (eg, Symantec, Kaspersky, ACL, AV, DC, PKI, RSA Tokens). As an estimate, approximately 40-50% of IT systems and products are common across the two organizations, with the key notable differences:
|SAP ERP R/7
|Oracle eBusiness Suite ERP
|Oracle-Siebel Systems CRM
|Oracle R12 SCM applications
However, the level of systems customisation is so great (given the need to support the very different business processes and procedures at both firms), a large IT rationalisation and duplication removal project will no doubt be needed (as an example both firms use highly customised versions of ERP). New processes will be needed for CRM, SCM and business continuity management.
Telstra holds a $150 million annual contract to provide telecommunications and call centre services to AUSPOST, and a similar contract valued at $100 million per year with TOLL (this includes overseas partnerships with companies like BT, AT&T and so on). Key considerations include merging the corporate telecommunications services, customer contact and shared services centres, and the need to establish a ‘corporate level’ disaster recovery facility/centre and security architecture.
Additionally, there is a large pool of IT executive talent possessing significant levels of systems integration experience. Their initial investigations have revealed several possible directions in which they might focus corporate attention and resources:
- D1: Concentrating on integrating, rationalizing and refreshing their internal functionally organized business systems, by (possibly) making use of technologies such as Enterprise Resource Planning systems and EAI, and approaches such as Enterprise Architecture;
- D2: Developing closer integrated and electronic links with their supplier and partner organizations (eg, equipment suppliers, service contractor companies) to better coordinate their activities and reduce costs through implementation and use of e-procurement, Supply Chain Management systems, or similar technologies;
- D3: Establishing integrated and rationalized corporate systems and services delivery using a single telecommunications provider, a high quality contact and call centre management solution, and a disaster recovery facility that may possibly make use of an ‘off-site’ data warehouse and integrated data marts;
- D4: Using integrated systems to improve and extend their marketing and business intelligence activities, both nationally and internationally, through the implementation of a consolidated Customer Relationship Management system;
- D5: Establishing a consolidated security architecture that enfolds the business processes and procedures of both fims, and streamlines security operations and management; and,
- Note 1: Extensive use of Cloud Computing models to deliver collaboration, security, storage and other business functions to the merged company might be considered as important.
- Note 2: Expected growth in BYOD/BYOA in the merged entity, including advice on security models, policies and MDM systems may prove useful.
You are to provide a report for the AUSPOST Board on the possible directions the integration might follow. At a minimum, your report should contain the following deliverables:
- A proposed enterprise architecture for the merged entity (pick one merger model ONLY), including a detailed discussion of the framework applied (eg, Zachman, TOGAF), the major artefacts created (eg, data architectures, security architectures, telecommunications architecture, process taxonomies, governance frameworks), and a diagrammatic representation of the architectures (D1 and D5).
- A detailed discussion for each of the following:
(i) Consolidation and/or integration of ERP systems, including any use of EAI, and the implications for BPR and BPM (D1); and
(ii) Integration of suppliers and customers under the respective SCM and CRM systems integration tasks under the new architecture. Also, provide use case models that describe how supplier and customer interactions and data, and the SCM and CRM will be merged (remembering that your audience is Director-level management who are not necessarily familiar with what IT integration is about) (D2 and D4).
- Exercising your business analysis skills and knowledge, conduct the following:
(i) SWOT analysis on your proposed solutions in part (2) ERP, SCM and CRM (D1, D2, D4); and
(ii) A Requirements analysis of the top 15 technical system requirements and top 15 business system requirements for your proposed solutions in part (2) ERP, SCM and CRM. Provide priorities for these 30 system requirements. (D1, D2, D4)
- Any other relevant analyses or points that may arise, such as (for example, but not necessarily only) whether similar IT integration approaches may work in other less or more sophisticated marketplaces around the world.
- Provide a title page and table of contents;
- Organize the contents of your assessment into appropriate sections, with appropriate headings. It should not be simply one long essay;
- Include a list of quality references that you have used, and cite them in the text using either the Harvard referencing format (exclusive use of Internet references is not acceptable);
- Word Limits (expected): Up to 6,000 words, not including the Appendices. Do not, however, pad your work with irrelevant or peripheral material – make every word count;
- AVOID PLAGIARISING other people’s work or being dishonest in your assessment – YOU CHEAT – YOU FAIL;
- Use DOUBLE SPACED PARAGRAPHS throughout the assessment;
- Use Times New Roman 12 fonts in your assessment only.
- Use diagrams, figures and photographs to illustrate your advice and recommendations where appropriate. Use appendices where you feel it is appropriate (eg. for some analyses).
- If you do not have enough information on which to base your arguments, given the background presented above, make any plausible assumptions you need (making it clear what you have assumed for the purposes of your argument).
Given the unstable global economy that has been witnessed for several years now, many businesses have experienced and encountered different economic situations, some of which are posing threats to the existence and performance of most organizations. Cases of stiff competition, market structure, market dynamics, and political factors, among many others, have subjected many businesses to various instances of difficulties (Wijnhoven et al., 6). To overcome some of this challenges, most business have engaged in practices such as formation of partnerships to reduce competitions and optimize existence status and levels of performance. Also, mergers and acquisition are some of the ongoing trends in the contemporary business society. In this perspective, different organizations have acquired the ownership of others or cooperated with them to maximize their survival and performance; mergers and acquisitions allow business to cut cost and maximize their returns (Giacomazzi et al., 290; Akella et al., n.p.). According to Mehta & Hirschheim (144), mergers and acquisition is another strategy that the modern business practitioners consider and utilize towards maximizing market share and returns.