DHL-Airborne Didn't Take The Easy Road To Post-Merger IT Integration

The companies had different business models, IT assets, and outsourcing strategies. The combined company was determined to take the best of each.

Rick Whiting, Contributor

June 24, 2006

3 Min Read

For the second phase, which lasted about 100 days, executives decided to consolidate IT systems at DHL's Scottsdale, Ariz., facility--one of DHL's three global IT service centers--and use as much of DHL's IT infrastructure as possible. Parker describes the process of choosing which of Airborne's 400 applications and DHL's 200 to use as "pick and go." DHL's import/export system was superior to anything Airborne had, while Airborne's domestic shipping software was more sophisticated. Customer billing and support applications were chosen, as well as a single Web site. Eight hundred to 1,000 people, including Infosys staffers, worked on the project at the peak.

It was hairy work at times. DHL and Airborne had custom-built software to run vital functions such as pickup and delivery, shipping, import/export control, and billing and receivables applications. Airborne IT operations in Seattle were mainframe-centric, running on IBM software such as CICS, IMS, and mainframe versions of the DB2 database. The core of DHL Express Americas, the U.S. branch with IT operations in Scottsdale, ran on Hewlett-Packard servers using HP-UX Unix and Informix and Oracle databases.

What's The Difference?

One of the biggest challenges during the integration was learning each other's IT systems and business practices. "Even down to the different vocabulary around the business and IT practices," Parker says. Differences in terminology made it difficult to assess each other's applications enough to choose one; DHL personnel, for example, struggled to understand some automated features in Airborne's apps for truck-route management, while Airborne workers sweated over features in DHL's export/import apps. But the second phase left the companies integrated so DHL functioned as one entity.

Most of the third phase still lies ahead. The past three years focused on picking DHL or Airborne systems. But the right long-term answer may be "neither." The third phase, begun in late 2004, requires the team to lay down an IT road map and look across the company's application portfolio to decide which to enhance and reengineer, and which to scrap. The legacy billing system DHL inherited from Airborne, for example, will be replaced by an SAP app. DHL's strategy is to use in-house applications where the company has a unique need or knowledge, such as its import/export and customs clearance applications, and packaged apps from SAP for tasks such as billing and accounting. Service-oriented architecture standards will be used to link those apps as the company moves toward a shared services IT architecture.

The best-of-breed approach to IT integration isn't easy or quick. It's no wonder the acquiring company often shuts down as much of the acquired company's information systems as it can and imposes its own. But a lot can be lost that way. To squeeze the most out of an acquired company, it often takes squeezing more out of its IT systems.

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