What Role Does A CIO Play When Companies Merge?

by drjim on June 15, 2016

Combining two companies is a difficult task and the CIO plays a critical role

Combining two companies is a difficult task and the CIO plays a critical role
Image Credit: Tony Webster

The person with CIO job faces many different challenges during their career. One of the biggest is one that is completely out of their control – when their company decides to merge with another company. When companies decide to merge, the senior management often make many promises to the press and shareholders of how much more efficient the combined companies are going to be. In the modern world of business based in part on importance of information technology, these promises have to be carried out by the CIO.

Problems With The United / Continental Merger 5 Years Later

The United Continental fleet of aircraft were grounded in mid-2015 because of a technical glitch in the company’s IT infrastructure. United was forced to suspend their flights worldwide in order to deal with the software problem. What this very clearly shows is that the company is still struggling to deal with issues that should have been resolved at the start of the efforts to bring United and Continental together when the two firms merged in 2000.

One of the biggest challenges of that merger was that United is the second largest carrier in the world. When they purchased Continental the United CIO needed to move quickly to blend United’s IT systems into how Continental did business. In September of 2014 United hired its third CIO since the merger. The new CIO, Linda Jojo, had a great deal of work before her. Bob Edwards had been the United CIO before he was replaced by Linda.

The challenges that Linda will be facing include preventing outages like they have just experienced. Another problem includes dealing with the airline’s mechanics who are still working under separate IT systems, which store complex data related to fixing aircraft. The IT changes that they have made have not always gone well. After the airline moved to a single crew management system previously used by Continental, a problem led to United losing track of hundreds of pilots around the world and it contributed to flight cancellations. Linda is going to have to do a better job.

What United Continental Could Be Doing To Fix Their Problems

Clearly Linda Jojo is going to have her hands full as she tries to complete an IT merger that really should have been taken care of over 5 years ago. Over the past 5 years the company has experienced a series of mishaps that have prevented it from being able to realize the benefits that were promised to customers and shareholder when the merger was first announced.

United Continental is not the only airline to undergo a merger in the past few years. Delta merged with Northwest back in 2008 and they were able to accomplish the merger of their systems relatively quickly and painlessly. This has allowed them to now become the most profitable airline in the industry. Additionally, American Airlines merger with US Airways which happened in 2013 is still a work in progress, but has not had the difficulties that the United Continental merger has had.

One immediate change that will need to be implemented will be to create backup features for United’s enterprise systems. If they are able to do this, then they should be able to prevent a single glitch from being able to ground the airline’s entire fleet. When an enterprise system has a single point of failure, as was the case at United, it can take multiple hours to hunt down what the cause of an outage is. By making changes like this United can start to become more proactive in how they manage their company’s IT infrastructure.

What All Of This Means For You

The person in the CIO position faces a complex set of challenges as they go about performing their jobs. One of the biggest challenges that a CIO may face during their career can occur if their company decides to merge with another company. All of the benefits of the merger have to be accomplished by the CIO.

In the case of United Continental, the two firms merged over 5 years ago. However, they are still facing merger related issues that are affecting the way that their customers view them. A recent outage in their IT systems revealed that they still have single points of failure in their infrastructure. What the CIO needs to do is some house cleaning. The best systems from both companies have to be reconfigured to work across the entire enterprise and the systems that are no longer needed have to be deactivated and removed.

Yes, implementing all of the changes that are part of a merger of two companies is not an easy task to accomplish. However, in firms that are more and more driven by their IT shops, the CIOs role in making any merger a success has become more and more important over time. CIOs need to understand that both the public’s view of the merger as well as the company’s shareholder’s view of the merger will be a reflection of what the CIO is able to accomplish.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: What do you think that a CIO can do at the start of a merger that will help the process to go smoother?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

What have you always pictured your boss looking like? If you are anything like me, you’ve always pictured them as a grumpy old man. Or a grumpy old woman if you want to get all modern. However, there is one thing that I’ve never really pictured my boss as being – younger than I am! However, this is starting to happen. Firms are starting to put Gen-X folks into senior management positions. What should you do if this happens to when you are in the CIO position?

Be Sociable, Share!

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: