And reconfiguring the entire it infrastructure to effectively and efficiently support new business strategies does not get any easier (Walter 134). The misalignment of business strategy and it strategy has been recognized as a major hindrance to the successful exploitation of competitive advantage in the financial services sector. (Watkins, 1992). Pressure on management to focus on both sides of the cost-income equation has become a priority item on the agenda for most CEOs and CIOs. Some observers have argued that business strategy has both an external view that determines the firm's position in the market and an internal view that determines how processes, people, and structures will perform. In this conceptualization, it strategy should have the same external and internal components, although it has traditionally focused only on the internal it infrastructure -- the processes, the applications, the hardware, the people, and the internal capabilities; however, external it strategy has become increasingly indispensable (Walter 134).

For example, if a retail bank's it strategy is to move aggressively in the area of Web-based distribution and marketing channels, the management must decide whether it wants to enter a strategic alliance with a technology firm or whether all those competencies should be kept internal. If a strategic alliance is the best option, management needs to decide with whom: a small company, a startup, a consulting firm, or perhaps one of the big software firms? These choices do not change the business strategy, but they can have a major impact on how that business strategy unfolds over time. In short, organizations need to assure that it goals and business goals are synchronized (Henderson and Venkatraman 32).

Once the degree of alignment between business strategy and it strategy has been assessed, it becomes apparent whether the existing it infrastructure can support a potential it merger integration. At this point, alignment with merger strategy comes into play. A great deal depends on whether the organizational transformation involves horizontal integration (the transaction is intended to increase the dimensions in the market), vertical integration (the objective is to add new products to the existing production chain), diversification (if there is a search for a broader portfolio of individual activities to generate cross-selling or reduce risk), or consolidation (if the objective is to achieve economies...

Each of these merger objectives requires a different degree of it integration. Cost-driven transformations typically result in a full, in-depth it integration (Walter 134).
Given the alignment of it and business strategies, management of the merging firms can assess whether their it organizations are ready for the deal. Even such a straightforward logic can become problematic for an aggressive acquirer; while the it integration of a previous acquisition is still in progress, a further it merger will add new complexity. Can the organization handle two or more it integrations at the same time? Shareholders and customers are critical observers of the process and may not be convinced, so early analysis of a firm's it merger capability can be a helpful tool in building a sensible case (Walter 134).

Case Studies of it Departments in Transition. Add series of case studies of it departments in transition from the peer-reviewed and scholarly literature concerning how they succeeded (or failed). (About 5 pages)

Works Cited

The Organizational Transformation Process: The Micropolitics of Dissonance Reduction and the Alignment of Logics of Action. Contributors: Samuel B. Bacharach - author, Peter Bamberger - author, William J. Sonnenstuhl - author. Journal Title: Administrative Science Quarterly. Volume: 41. Issue: 3. Publication Year: 1996. Page Number: 477

The Role and Relevance of Management Cultures in the Organizational Transformation Process. Contributors: Karin Breu - author. Journal Title: International Studies of Management & Organization. Volume: 31. Issue: 2. Publication Year: 2001. Page Number: 28

Henderson, J., and Venkatraman, N. 1992. "Strategic Alignment: A Model for Organizational Transformation Through Information Technology. " in T. Kochon and M. Unseem (Eds.), Transformation Organisations. New York: Oxford University Press.

Mergers and Acquisitions in Banking and Finance: What Works, What Fails, and Why. Contributors: Ingo Walter - author. Publisher: Oxford University Press. Place of Publication: New York. Publication Year: 2004

The Nature of Organizational Leadership: Understanding the Performance Imperatives Confronting Today's Leaders. Contributors: Stephen J. Zaccaro - editor, Richard J. Klimoski - editor, Neal Schmitt - author. Publisher: Jossey-Bass. Place of Publication: San Francisco.…