These three mergers follow a distinct trend -- one that distinguishes the 1990s merger from that of the 1970s. These are corporate combinations that shy away from the creation of conglomerates with different businesses and instead combine similar products and services that leverage scale and strategy -- and, binding it all together, information technology.

CitiGroup, the new CitiCorp-Travelers combination, will test the limits of how effectively IT can create leverage points between different lines of business. The idea: to form a customer-centric organization where different product lines are cross-sold and cross-marketed.

From the perspective of the new CitiGroup, if you're a checking-account customer or IRA holder, why not get pitched for auto- or life-insurance business? If you're a small business, why not go to the same source for a business line-of-credit, the management of your 401(k) plan, or an office-building lease? And if you run a small business, why not have the same provider for financing or workers' compensation?

At least, that's the theory of the customer-driven mega-merger. But while the promise of cross-selling and cross-marketing is driving consolidation, truly melding massive organizations creates enormous cultural and technological challenges. Newly combined IT departments will be charged with creating a unified technology infrastructure that will have to create metadata, data warehouses, and analysis tools. These will be critical for these massive enterprises to not only combine accounting systems, but customer lists, billing systems, and marketing strategies. Indeed, it's mind-boggling to consider the sheer volume of information that needs to be organized and presented in a cohesive manner at a CitiGroup or other major merged company.

Not only is there the imperative to combine successfully, but to combine systems quickly. Time, however, is not on the side of any of these mega-enterprises. Any change or new technology will need to scale -- and instantly -- to affect an entire organization. Denis O'Leary, executive VP of consumer products and services at Chase Manhattan and a veteran of two mergers at his own bank, talks about "scaling up overnight" and "zero-time scalability." If you can't combine or implement technologies very quickly, says O'Leary, then you risk eroding the power of the new, combined brand. If O'Leary is correct, then the time gap between testing any new IT project and a corporatewide rollout will need to be very short indeed within the newly merged companies.

In this scenario, scale becomes not only a matter of size, but an imperative that's also time-based.

This creates a challe nge for corporate planners, whether they function inside IT or alongside the technology infrastructure. How do your create a five-, three-, or even one-year strategic blueprint if you're guaranteed to need to change that blueprint -- maybe even radically -- several times within its time frame? How, then, do you prevent the strategic from becoming the tactical? And how is it possible to create migration and upgrade paths for key technologies when so much in business and technology changes so quickly?

Strangely, the mega-mergers amongst technology providers -- such as the recently announced Compaq-Tandem-Digital combination -- may provide an answer. Consolidation amongst IT vendors can help large organizations by providing the stability of platform and technology direction that can help the newly consolidated. If you're a Gulliver-sized user, you're not that likely to bet too much of your core strategy on Lilliputian product or services providers.

But U.S. business can't survive by ignoring the peripher y of development. How can these large companies continue to be open enough to smaller IT vendors who provide new and innovative opportunities? No one wants to shut the door on innovation.

Simply put, these companies will have to listen to the smaller IT providers, too. Randy Mott, a veteran of data warehousing and the CIO at Wal-Mart, often talks about the need to profile customers and drill down and look into the product basket. He talks of a "new generation of decision support" which is "a cry for innovation." You can bet that the new mega-banks will need the same type of customer-focused tools as multibillion-dollar retailers.


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Rich Levin: Run Time Rich fills you in on all of the latest products, issues, and trends in application development.		Stuart J. Johnston: Redmond Watch As our eyes and ears in Redmond, Stuart gives his perspective on the latest events at Microsoft.		Jason Levitt: Internet Zone Jason focuses on the strange, egregious, and the standard technologies of the intranet/Internet.