Post-merger application portfolio at Northline Logistics
Two logistics companies merged eighteen months ago. The combined group has 4,500 employees and 12 core applications, including two ERP systems, three transport management systems and four warehouse management systems. Annual application spend is €6.5 million, and the BIM team estimates 30% goes to overlapping or duplicate functionality. Customer contracts require ten years of data retention and uninterrupted service during migration. The board has set an 18-month deadline to 'consolidate to one ERP and one TMS' and asked for a list of quick wins. The BIM department has no complete application inventory, no architecture capability, and is still split along the former company lines, with each side defending its own systems. The CIO wants to cut costs by 20% but is worried about operational disruption. The business units are suspicious that the exercise is a pretext for headcount reduction.
1. Which BiSL processes should structure the consolidation, and what should the BIM team do in the first 60 days?
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Portfolio management is the lead process, supported by information planning and information strategy. Portfolio management treats the applications as one investment portfolio, assessing each on business value, risk and cost, and deciding retain, replace, migrate or retire. Information planning connects that to the merged business plans and the 18-month deadline.
In the first 60 days the team should build the missing application inventory: owner, users, business processes served, contract, annual cost, technical condition, data volume and interfaces. In parallel, define a small set of architecture principles, such as 'one ERP for the combined group' and 'customer data has one master', so decisions are not made case by case. Then run a portfolio assessment with both former companies contributing evidence, and identify quick wins that reduce cost or risk without a migration, for example retiring duplicate licences or consolidating reporting.
Do not promise a target architecture before the inventory exists. The 'one ERP, one TMS' goal may be right, but the route and sequencing need evidence, especially with ten-year retention obligations.
2. How do you balance the CIO's 20% cost target against service continuity and ten-year data retention?
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Make the trade-off explicit rather than pretending both can be maximised.
- Ring-fence systems that carry customer-contractual or safety obligations; for those the criterion is risk, not cost, and migration only after proven parallel running.
- Separate run savings from change savings. Duplicate licences, unused modules and overlapping support contracts can often be cut within months without touching customer service, while application consolidation takes longer.
- Sequence by risk and value. Quick wins fund and de-risk the harder migrations.
- Use connect management to renegotiate supplier contracts at the right moment; exiting a system early can trigger penalties that wipe out the saving.
- Define what '20%' means (application spend only, or total IT?) and over what period. A three-year glide path may be more credible than an 18-month cut.
The board should see a chart of savings against risk, with the retention obligation marked as a hard constraint. That turns an argument about ambition into a decision about acceptable risk.
3. What governance and people approach would you use to overcome the split between the two former companies?
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Governance should force joint ownership of the portfolio rather than let each side defend its own estate.
Create a portfolio board with equal representation from both former companies, chaired by someone with group authority, and rotate the assessment so each side reviews the other's applications. Use independent evidence, such as user surveys and cost benchmarks, rather than internal advocacy. Publish decisions and the reasons behind them.
On the people side, address the fear explicitly: state early whether the exercise is about systems, headcount, or both, because ambiguity fuels resistance. Involve the operations staff who know the workarounds and data quirks; they can identify risks that architects miss. Consider a joint 'integration office' with mixed teams for the first 90 days. Finally, separate the cost-reduction programme from the portfolio decisions at working level, so that a system's fate is not read as a verdict on its staff. Trust will not be created by a slide; it is created by consistent decisions.