Authors: Ning Su, Rama Akkiraju, Nitin Nayak, Richard Goodwin
Addresses: Leonard N. Stern School of Business, New York University, 44 West Fourth Street, New York, NY 10012, USA. ' IBM T. J. Watson Research Center, 19 Skyline Drive, Hawthorne, NY 10532, USA. ' IBM T. J. Watson Research Center, 19 Skyline Drive, Hawthorne, NY 10532, USA. ' IBM T. J. Watson Research Center, 19 Skyline Drive, Hawthorne, NY 10532, USA
Abstract: Firms that grow through mergers and acquisitions often need to deal with duplicate and disparate business functions. Specifically, firms often need to transform and optimise their business processes through simplification, standardisation, consolidation, insourcing and/or outsourcing. In order to decide whether and how to perform these transformation initiatives, firms need to estimate the value of different transformation approaches. Conventional valuation approaches tend to focus on foreseeable cost savings. In this study, we propose that in a turbulent global business environment, the value of strategic flexibility, which may be embedded in different business transformation approaches, should be explicitly incorporated in such valuation.
Keywords: business transformation; strategic flexibility; valuation; mergers; acquisitions; duplication; disparity; process optimisation; simplification; standardisation; consolidation; insourcing; outsourcing; cost savings; services operations; services management; informatics.
International Journal of Services Operations and Informatics, 2010 Vol.5 No.1, pp.53 - 63
Available online: 19 Jan 2010 *Full-text access for editors Access for subscribers Purchase this article Comment on this article