Mergers & IT Systems

 

The purpose of information technology (IT) systems as a whole is to make business processes easier, more automated, and more efficient. These systems are intended to enhance the business and to meet their financial goals (CIO Source, 2019). In the case of mergers, the existing technologies must be taken into account and examined to make sure they will meet the business goals of the newly formed company going forward. To help make the merger more successful, it is important to:

1.      Assess and analyze the current state of the IT systems to make sure they align with the specific goals, tasks, and operations of the new company. This helps identify what technology can stay, what must go, and if new technology is better suited for the new endeavor (CIO Source, 2019).

2.      Define and prioritize initiatives – Since IT resources are likely to be stretched thin during the merger, it is important to start detailing a roadmap of all the projects, programs, and priorities that are needed for the successful integration of the two companies (CIO Source, 2019).

3.      Develop an integrated roadmap – After all of the priorities associated with the integration phase of the merger have been identified, develop a blueprint of all projects, programs, initiatives. The final product should include all detailed timelines, projects, sub-projects, and contingency plans (CIO Source, 2019).

In a move notably referred to as “a merger of equals,” Raytheon Corp. and United Technologies completed a mega-merger in April 2020 (Cordell, 2020). This merger creates one of the largest defense and aerospace companies, totaling over 195,000 employees and approximately $74 billion in net sales in 2019. Like others across the world, both companies were affected by the Coronavirus pandemic. In March of 2020, Raytheon’s stock had dropped from $201.34 to $116.96, while United Technologies stock also dropped from $139.04 to $86.01 (Cordell, 2020).

A merger of this scale is bound to be complicated in many ways due to the sheer size and complexity of both companies prior to the merge. According to Cordell, 2020, the new Raytheon Technologies company will both of the pre-existing companies’ expertise in: defense weapons, aeronautics, information technologies, and cyber security across the following four separate business segments:

Collins Aerospace – focuses in avionics, aero structures, mechanical systems, interiors, power controls and mission systems across regional, commercial, military, and business aviation sectors and boasts 78,000 employees.

Pratt & Whitney manufactures and designs auxiliary power systems and aircraft engines for military, commercial, and business aircraft. This business segment has 43,000 employees.

Raytheon Intelligence and Space – concentrates in software and cyber solutions, training, and advanced sensors, employing 39,000 professionals.

Raytheon Missile and Defense – delivers solutions to track, detect, and engage threats, employing 30,000 personnel.

In a merger of this size, it is likely that the newly formed Raytheon Technology Corporation has assessed the existing, merging IT systems, the architecture, and applications to make sure that they meet the newly defined business goals and strategies. This will not only help to seamlessly merge the IT systems and the two companies but will also help to identify any new technologies that could be a better fit for the new company going forward. In cases of other mergers, this last step had been missed and in turn did not set the new company up for success.

 

References

Cordell, C. (2020, April 3). Raytheon completes merger with United Technologies. Bizjournals.com. Retrieved June 13, 2022, from https://www.bizjournals.com/washington/news/2020/04/03/raytheon-completes-merger-with-united-technologies.html

Technology considerations during the merger of two companies. CIOsource. (2019, May 17). Retrieved June 13, 2022, from https://www.ciosrc.com/blog/technology-considerations-during-the-merger-of-two-companies/