Public Holding Post-Merger Integration - IT Operating Model

A new organization was born. An overall strategic shift created a tightly integrated single corporation out of loosely aligned and geographically dispersed corporations.

To make such a post-merger integration scenario with multiple entities possible, a strong focus must be put on the overall target operating model. This focus has to be set at certain levels - overall at the top-level structure and for each business function. Therefore, the responsible board member and his management team initiated an IT operating model project. The goal was clear: design and sign off a target IT operating model uniting the previously independent IT organizations.

Challenges and opportunities are manifold, including having a clear view of the different as-is states, deriving effective future management and IT governance structures, understanding the potentials of synergy areas, including timings for a potential realization, and working effectively on dependencies between the different operating model projects at top-level as well as in the individual business functions.

The goal of the project was to develop a new target IT operating model for a new central IT function founded out of several previously independent IT organizations, considering the following key points in particular:

• Align with the updated holding strategy and corresponding business and IT guiding principles
• For each previously independent IT organization: understand the strengths and weaknesses of the current IT landscape, the IT operating model as well as the context of architecture, IT sourcing, the project portfolio, and business / IT alignment
• Work with the defined core team and stakeholders to develop and agree on the target IT operating model with a strong focus on capabilities, organization structures, leadership development, IT governance, and the future collaboration model between the business functions and IT
• Consider the identified challenges and opportunities, including having a clear view of the different as-is states, deriving effective future management and IT governance structures, understanding the potentials of synergy areas, including timings for a potential realization, and working effectively on dependencies between the different operating model projects at top-level as well as in the individual business functions

The following approach has been taken to develop a new target IT operating model for a new central IT function founded out of several previously independent IT organizations:

• Interviews with selected board members, business executives, and the IT executives
• Analysis of the existing IT strategy and key documents, as well as a briefing workshop series with the IT executives
• Analysis and workshop series on the identification of synergy areas and the estimation of the potential
• Development of a vision and guiding principles for the target IT operating model
• Development of an updated capabilities map and cornerstones for the IT operating model
• Workshop series on the options and cornerstones of the envisioned target IT operating model with the nominated core team until consensus has been reached
• Alignment with the board and detailing of the target picture for the IT operating model with the core team
• Development of a roadmap to reach the target state 
• Finalization and sign-off of the target IT operating model

The project length for developing the (high-level) target IT operating model was approximately 8 months.