Business rules can be costly merger oversight

It's a sign of today's merger mania: When 100 CIO-level executives met here earlier this month, a hot topic was how to integrate the information systems of two corporations after a merger or acquisition.

US mergers and acquisitions totaled more than $US1 trillion in assets last year, said Bob LaBant, president of conference sponsor Candle Corp.

The faster the systems of two companies are merged, the smoother the transition will be for their customers, said Don Obert, senior vice president of information processing at Bank of America Corp.

But it isn't easy. Melding two organisations' infrastructures typically involves 15 to 20 separate systems. And technologists may neglect to integrate business rules embedded in the disparate systems - which is a potentially costly mistake, said Judith Hurwitz, president and CEO of Hurwitz Group in Framingham, Massachusetts.

Those doing the melding may be unaware of business rules important to each system -- or even where they are, Hurwitz said. "Some [rules] can be in tables; others are buried in programs," she said, adding that if you find 10, you may miss three.

For example, one organisation changed a dozen instances to cut sales commissions from 10% to 9% but missed one instance. That slipup cost the unnamed company $250 million, Hurwitz said.

One trick is to reuse Y2K code remediation tools, she said. Many companies already are looking to modify those tools so they can find and then standardise business rules.

Of course, acquiring a company doesn't always require merging systems, said Karlin Bohnert, associate vice president of systems at Nationwide Insurance Enterprise Agency in Columbus, Ohio. But even then, the acquiring company will want a technology architecture that allows for data warehousing and integration of applications across the company, she said.

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