Case Number: 5-404-771, Year Published: 2006
HBS Number: KEL191
Portfolio Management, Merger and Acquisition, Risk Management, IT Management, Strategy Alignment, Key Business Objective, Score Card
Mergers and acquisitions (M&A) are often very complex management endeavors. The case analyzes the IT component of M&A for two financial institutions. Students are tasked with assisting Mike Farrell, the CIO of New Millennium Financial (NMF), a new company created through the merger of FinStar Financial and D&L Bank, in determining the optimal combined IT portfolio. To accomplish this task the strategic business objectives of the firm must be clearly understood and the IT projects in the pipeline of both institutions analyzed. Students must make an IT portfolio management decision and answer the question: What is the optimal IT strategy and project portfolio for New Millennium Financial (NMF)? Completion of this case gives students a framework for analyzing similar portfolio management decisions. The case is an action learning exercise with students using ProSight Portfolios, a leading Web-based portfolio tool, to analyze the portfolio and make the management decision. LEARNING OBJECTIVES: The key learning of this case is that a framework may be applied to organizing and managing a company’s IT portfolio. This framework includes understanding the strategic context of the company, developing business objectives that are aligned to the corporate strategy, developing the rationale for assessing (approving or rejecting) different IT investments, and developing an appropriate portfolio of IT projects that support the business objectives. In addition, the framework is an iterative process wherein IT investments are assessed and monitored on a regular basis based on their performance and risk/return trade-offs. Finally, this case also introduces the students to a leading Web-based tool called ProSight that assists managers in organizing their IT portfolio.
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