Two companies merge and after a system review of the legacy applications in each previous company the decision is made to retire the legacy applications and implement a new single platform using stadard applications. what is the highest risk associated with this management decision?

The replacement effort consists of several independent projects without integrating the resource allocation in a portfolio management approach.

Excessive training costs and operational downtime until businesses change their work processes.

Poor resourse allocation between the two companies during the pre-merger process.

External consultants being in control of project management and progress reporting

Explanation

The efforts should be consolidated to ensure alignment with the overall strategy of the postmerger organization. If resource allocation is not centralized, the separate projects are at risk of overestimating the availability of key knowledge resources for the in-house developed legacy applications. In postmerger integration programs, it is common to form project management offices to ensure standardized and comparable information levels in the planning and reporting structures, and to centralize dependencies of project deliverables or resources. The experience of external consultants can be valuable since project management practices do not require in-depth knowledge of the legacy systems. This can free up resources for functional tasks. It is a good idea to first get familiar with the old systems, to understand what needs to be done in a migration and to evaluate the implications of technical decisions. In most cases, mergers result in application changes and thus in training needs as organizations and processes change to leverage the intended synergy effects of the merger.