Explanation Of Two Financial Giant Merger - Essay Example

It is apparent that due to increased local and international stiff competition in the banking sector, many organizations have resorted to mergers. Nevertheless, these merges have to be well planned for and articulated in a manner that would lay a firm foundation for the newly formed organization to maintain competitive advantage (Yates 7). One of such things that must be considered is the applicability of information system. With online banking services being on the increase, banks are very sensitive on how they engage in information system in order to retain and attract new customers.

The case of merger between Wells Fargo and Wachovia is no exceptional to the importance of prioritizing on integration of information system in their merger. In fact, having been familiar with purchasing and merging smaller banks and failing institutions especially in 2006, just before the merger with Wachovia took place, Wells Fargo is cited to have had been successful and had steady increase in stock value. In this regard, for such an achievement to take place, information system plays an important role in enhancing the success.. In light of this, it was crucial for the two firms to integrate information system in their merger in order to strengthen their approach on information system matters.

Perhaps, one of the firms could have a workforce with proficient information system, but lacking personnel to propel such knowledge to a higher notch while the other could be having ideas of propelling such ideas, but lacking people to propel them. In such a case, integrating information system in the merger would have created a strong information system (Prakken 7). 2. It is apparent that although integration of information system in the merger was crucial and enabled the merger to be successful, difficulties were noted by the two firms.

For instance, after being successful in most of its mergers before the merger acquisition of Wachovia, Wells Fargo had been successful in these mergers. The firm was well aware of the challenges of such a merge especially with a firm recording decrease in stock value. In essence, it is evident when a firm is recording decrease in stock value, either it’s IT or the human resource or both could be less functional. In this regard, there was a challenge of incorporating the information system of Wachovia.

This is because it could have been the one that led to decrease in its stock value. However, although there could be some aspects of it that was significant, the effort to identify and incorporate such aspects in the new merger could have been difficult as well. On the other hand, human resource that manages the information is system is very important. Therefore, if the Wachovia’s human resource was incompetent and probably leads to the downfall of the firm, then it is apparent that there were difficulties in incorporating it into the