GSK shows the IT costs of mergers

But Accountancy Age sister title Computing can reveal it will be 2003 before basic systems such as email are standardised across its 100,000 staff.

The news backs up a study by analyst Bathwick Group, which warns of the complexities of IT integration in mergers and takeovers.

GSK, formed from the merger of pharmaceutical companies SmithKline Beecham and Glaxo Wellcome, avoided the pitfalls of poor planning by setting a 100-day deadline, by which time all essential IT had to be active. An effective strategy led to a final cost of £2.9m – £2m less than originally allocated.

A GSK spokesman claimed that the initial investment was vital. He said that for such a knowledge-intensive business, the potential losses could have been as high as £1m per day if, for example, the email system had failed.

The key concern in those first 100 days was the integration of research and development applications. A new search engine was developed for the GSK intranet, to cover 1000 websites.

‘The 100-day programme focused on minimising change to the business. It looked to link different technologies and provide common processes, thus delivering benefits by interoperability, not change,’ said the spokesman.

The company is now looking at further integration to deliver the core services required by GSK and cut costs by 17% by 2003.

This article first appeared in Computing.

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