Unity Bank free essay sample

The four major areas to be considered during the integration were software, infrastructure, organization structure, and people. The team’s task was challenging as it had called for a $60 million saving in two years, nearly half of Delta’s current operational expense. The pressure was intense as merging two emerging entities was a huge task. The management was unequipped with plan and was not aware the first area that they needed to tackle. We believe that the integration could be managed by gradually consolidating Delta systems into LEAD, pushing back the deadline by 2 years, creating cash and transition incentives to increase employee productivity and decrease resistance, offer clients discounted rate to retain them and implement a flexible/parallel problem solving approach. OVERVIEW: Unity Bank will have the largest market share in the US after the acquisition of Delta is finalized. This has presented the management of Unity, the company acquiring Delta, with many obstacles. We will write a custom essay sample on Unity Bank or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The shareholder employee management services industry has been increasingly relying on advanced IT to handle both the massive volume of shareholders and the complexity of the transactions needed to be processed. Unity is currently faced with multiple conundrums in how to integrate the two company’s systems into one mechanism that will allow for economies of scale and high efficiency. The two company’s systems are different on many levels that impact flawless integration. Unity and Delta both operate on different programming language and also have vastly different user-interface utilities. Unity’s system offers more advanced services to its clients but is not set up for the huge volume soon to be created by the acquisition. Delta services are more limited; however their systems were made for high volume levels. Unfortunately, there are numerous difficult problems that must be addressed and solved in order for the acquisition not to become the demise of Unity. Each problem has many layers of complexity that must be solved in addition the management team needs to grasp which area to tackle first within their time and budget constraints.Done successfully Unity can transform into a world leader in shareholder employee management services. We conclude that each are must properly addressed with a stringent set of priorities in place in order to not become one of the many failed cases of mergers and acquisitions. Savings goal hindering integration effectiveness This is the largest problem for the integration team because most of the other problems can be solved if the y were given more time. Due to the due diligence restrictions, the integration team was unable to proceed with the merger for about 8 months, yet the company only gives them three years to cut IT spending by $60 million. Given the complexity of the process and the implication of current decisions on future success, this time issue can lead to rushed decisions and integration failure. Alternatives: A. Push back the deadline by 2 years By giving the integration team more time, the target saving will be more ealistic and the integration team will have time to learn more about Delta software systems, analyze problems more carefully, and recognize which Delta employees are contributing and which are not. Each of these processes is essential to building a successful company. Disadvantages: †¢ May not solve more complicated problems that are unrelated to time. †¢ Decreases short-term profits for shareholders. B. Establish tiered savings program Set more obtainable goals to meet the board’s expectation. Set half-year goals with what can realistic be accomplished and reduce staff as you finish sections of the integration.After each system is upgraded or integrated into another, eliminate all non-essential staff. Disadvantages: †¢ May not solve the time constraint issue †¢ Creates artificial deadlines which might add more pressure C. Eliminate short-term saving goal To maximize shareholder value in the long term and to protect the very existence of Unity Bank, eliminate any constraints on having nothing less than a perfect smooth integration with Delta. Without the fear of immediate termination, Delta employees may be more willing to cooperate. Savings will eventual be met and more likely exceed the projected $60 million.Disadvantages: †¢ This means greater expense for the company. †¢ Decreases profits from shareholders in the short run. 2. Inability to prioritize critical factors for integration Delta is one the biggest acquisitions for Unity and the integration process requires well-planned strategies. The four major areas of integration are software, infrastructure, organizational structure, and personnel. Deciding the order in which to tackle the four areas is challenging since Unity has never merged with such a large company and there is no statistical model from which the team can work. Alternatives: A. Hire an outside consultant to advice the integration process Management can hire a consultant with experience in large scale MA to advice them on the order of integration. Disadvantages: †¢ Consultants may not have access to all the information they need to be helpful. †¢ Higher cost to Unity in both money and time. B. Prioritize based on the difficulty level Unity can first integrate the area that is the easiest to integrate and then go from there. This is likely to ease the integration process as the company takes one small step at a time. Without knowing which system to use as the target platform, the managers cannot decide which departments to eliminate, what the infrastructure should be like and what kinds of staff members to keep. Both Unity and Delta have their own software systems but they all need upgrades before they can satisfy the new company’s needs. In addition, Delta runs on four separate systems rather than one mainframe system, making them very expensive to run. Alternatives: A. Integrate Delta systems into LEAD and use it as the target platform Since LEAD is more powerful, user-friendly, and cost effective make it the mainframe system for the new organization.Disadvantages: †¢ It is costly to consolidate Delta’s four systems and then upgrade LEAD. †¢ It is a time consuming process. B. Upgrade BLAIR to use as the mainframe system BLAIR is more functional efficient than any other system. Unity can upgrade BLAIR to include all the services from Delta’s four systems. BLAIR also creates recognizable entry barrier to competitors as it includes unique functions that other companies have not yet been able to replicate. Disadvantages: †¢ BLAIR requires more knowledgeable and expensive IT staff. †¢ It is time-consuming and requires specialized developers. C. Use an outside software provider to create a new system encompassing all the necessary functions An outside provider may have solutions to certain technological difficulties that the current IT team is experiencing and design a system that is both modern and efficient. Disadvantages: †¢ Outside developers are not familiar with the company’s every need. †¢ It can take a long time and high cost. 4. People are resistant to changes / Diminished employee loyalty and satisfaction Employees at both Delta and Unity prefer to keep their own systems because they don’t want to have to learn each other’s system.In addition, employees at Delta are unhappy about the new company invading their territory. Without the support of employees from both sides, a successful integration will be unlikely. Alternatives: A. Initiate an internal market campaign The new organization can create company seminars and publications to advertise the benefits of the new updated system including higher efficiency, more revenue for the company, and therefore, bigger bonuses for employees. Disadvantages: †¢ It may only lower but not completely dissolve people’s resistance. †¢ The effects may not be permanent.B. Hire new employees Get rid of employees who are strongly against changes and hire new ones who are more eager to work with the new company. This will also eliminate those employees who will seek to slow down the integration process. Disadvantages: †¢ The company can lose valuable and talented IT professionals. †¢ New employees will require extensive training and may not be as good. C. Create a cash and transition incentive program People are against changes because learning a new system or getting to know a new company is time-consuming and challenging.Unity can create a program where there are monetary incentives to boost employee productivity. To minimize resistance, Unity can provide a training seminar at a popular destination so that the employees can have fun while taking training courses. Disadvantages: †¢ Employees may not be able to learn everything unless the program runs on for weeks, which means more money to be spent. 5. Client service disruption There will be a period in which services at the new organization will be slow and disruptive as the company try to pour data from one system to the other and as it reorganize the organizational structure.This poses a major risk for the business as it may upset some clients and cause them to switch company. Alternatives: A. Retain each company’s systems Leave each company’s systems alone and let them operate separately. Disadvantages: †¢ This will be very costly in long term and diminishes the acquisition rationale. †¢ Information will not be able to flow smoothly from system to the other. B. Hire temporary employees during the transition period When the company is ready to work on the software integration, hire interns and temporary employees to help the current employees with data transfer and customer services.Disadvantages: †¢ This requires the company to pay for and train new employees. †¢ This may not solve technology-related service disruption problems. C. Provide customers with incentives to stay To prevent customers from switching, Unity offer discounted service fee during the transition period while hiring more customer service agents to serve those customers. By doing so, it will make the customers feel more important and more loyal to the company. Disadvantages: †¢ This is expensive to implement. The fee may not be low enough to gain customer loyalty. Competitors  acquired  more innovative software: The forte of an organization, especially in the service sector like IT industry, is its product features. In a cut throat competition, if a market competitor betters these features, the company faces a threat of losing out on not just potential clients but also existing ones. Likelihood – High 2. Economic slowdown: In the event of an economic slowdown, the overall business of the clients is likely to reduce.The prime focus of the merger was not only to acquire the brand name that Delta provided but also retain its customers after the merger thereby multiplying profits. With cost cut backs from these clients, economic slowdown could seriously damage Unity’s plan. Likelihood – Average 3. Natural Disaster: Disasters like earthquakes, floods, tsunamis are completely unpredictable. As a result, each company adheres to a Business Continuity Plan (BCP) that determines the downtime in restoration of services back to its normal flow.