Keane's Acquisition of Metro Information Services Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Keane's Acquisition of Metro Information Services case Solution

The key success factor of this I.T industry is the availability of the high skilled professionals. The labor force is the primary factor for the success of this industry. Firms compete with each other based on the qualified I.T professional and labor. These I.T companies are primarily service providers thus they majorly rely on their workforce. Moreover, companies strive to acquire and retain the top professional of the industry so that they can provide competent services and maintain sustainable growth.

Usually companies merge or go for acquisitions to gain access to these skilled and experienced I.T professionals. Keane and Metro have also identified such success factor and haveadopted the policy of acquiring small competent I.T firms as well as merger with the successful I.T companies. This can be reflected through their balance sheet as well. The figures of goodwill show the companies that acquired other companies and the goodwill that came out of such acquisitions. Moreover, the notes to the financial statements show the information about the mergers and acquisitions. Through these mergers and acquisitions, both companies enhance their competitive advantage, achieve synergies and gain high skilled professionals and talented workforce.

What is Keane buying with the acquisition of Metro?

The benefits that will be achieved from the acquisition of the Metro are defined as following:

Pool of professional workforce

Through the acquisition of the Metro, Keane will receive a pool of experienced and expert I.T professionals which will consolidate its competitive advantage. Metro has adopted the policy to maintain and develop its employees as it had placed emphasized more on the workforce and has created a culture that is people-oriented. Thus, the acquisition will provide Keane well motivated skilled staff.

Synergies in operations

Keane will achieve synergies in its operations through this acquisition. It will consolidate many of its operations and will eliminate the conflicting elements such as the central head office will be merged, as there will be no need of two head offices and the staff requirement might also be reduced that results in less administrative staff cost. The combined operations will result in more efficient operations by sharing of knowledge and improved work methods.

Geographical expansion

Metro’s one of the business strategy was to expand beyond geographical boundaries and reach at every major state,thus it has also increased its customer base by expanding its range of business. This will benefit Keane which will use such expansion to grow its business and reach to the untouched market segments.

Increased Revenues

Using the customer base of the Metro, Keane will achieve growth in its services by providing services to these new customers thus, the revenues will be increased. The customers are already receiving services from Metro and subsequently they will be attracted to use other I.T related services from the same merged company. Therefore, better service integration might also give better and efficient service provision.

Cost savings

It is stated in the case that the merger will bring savings of about $15 million in the face of elimination of redundancies. This can be interpreted in a way that the merged company will provide greater prospect to the existing employees and they will be reluctant to leave the job. Thus, the company will not face any redundancy and will have the required experienced professional. As a result,any cost that might be incurred to make new hiring as well as loss of revenues through unavailability of the I.T professional will be avoided..................

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