FastTrack IT Integration for Sallie Mae Merger Final 1

Fast Track IT Integration for the Sallie Mae Merger  *ase Study Idot Suriadi Fernando Salomo Dhoni !ahadi Syl"ia #artika MM $%M &'ecuti"e ( 2) * Presentation Document July 2015

Contents

+ Case summary + Main issue + Pro,lem Statement + -nalysis of solution alternati"es + !ecommendation

Case Summary

.  Founded in 1/2 in !eston.  For rofit go"ernment sonsored .  Focused on secondary market . 350 ,illion ortfolio in 2000

.  Founded in 1/40 in

Indianaolis .  on rofit comany .  314 ,illion ortfolio in 2000

Case Summary Different Works Environment

.  6igh *I7 turno"er  .  7utsourced Strategic  -lications .  Shrinking IT 8orkforce

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 20 years tenure of *I7 %reg *lancy  Successful internal systems 8ith lo8 oerating costs  %ro8ing IT 8orkforce

Case Summary %oals and Strategy ac9uisition $S- grou ,y Sallie Mae

Goals : .

Sustaina,le dou,le digit gro8th

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&'and role in industry :direct lending;

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!ationaliAing transitioning or retiring IT systems :500 different technologies ,et8een 2 comanies

Contents

+ *ase Summary + Main Issue + Pro,lem Statement + -nalysis of solution alternati"es + !ecommendation

The consequences of Sallie Mae Merger Proect 1B

M-I ISS$&

IT 7rganiAation Ser"ices :e'ternal used; alications and Internal used alications should ,e defined soon to meet cost reduction target and dou,le digit gro8thC single team leader single ser"ices alication single internal used alication should ,e chosen

2B

Single Data *enter location should ,e define and D*! management should take laceC

B

Peole issueC 8hen single alications alied transfer kno8ledge should take lace 8hile they kno8 their Eo, 8ill no longer a"aila,le after the rocess is doneB

The consequences of Sallie Mae Merger Proect

M-I ISS$&

IT System: 

The loan rocessing system and ,ack office system should ,e united and integrated to meet the eak loan rocessing season target on June 1 st of each year B

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There should ,e a team leader for IT integration roEect

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Data *enter location should ,e define and D*! management should take laceC

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The decision on e"ery acti"ities should ,e made 8ith lo8 cost oerating on time and in> ,udget 8ell recei"ed ,y stockholders

The consequences of Sallie Mae Merger Proect

M-I ISS$&

#usiness Pers$ective: 

Sallie Mae ac9uired its maEor cometitor $S- %rou on July 1 2000 for $SD 0 million

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*omany sought to attain dou,le>digit gro8th in its ,usiness as a result of the mergerB Peo$le issue:

8hen single alications alied transfer kno8ledge should take lace 8hile they kno8 their Eo, 8ill no longer a"aila,le after the rocess is doneB

Contents

+ *ase summary + Main issue + Pro%lem Statement + -nalysis of solution alternati"es + !ecommendation

&e' Sallie Mae IT ($$lication Shoul) %e *ea)y in +ast Track Single alication in single data center 8ith minimum risk 1B

P!7(digit gro8th in its ,usiness as a result of the mergerC make the ser"ice alication ready for use in user friendly :non e'erienced eole; manner ,ut has the full functionality ,efore June 2001 to con"ert 350 ,illion target loans into realityB IT 7rganiAationC should maintain $S- %rou=s team or Sallie Mae=s TeamG

2B

Single Data *enter location should ,e in !eston :Sallie Mae=s; or in Indianaolis :$S%rou=s;

B

Peole issueC ho8 to adEust from not>for>rofit culture :$S- %rou=s; to a result>dri"en for>rofit culture ho8 to encourage some key erson of IT team to stay until the merger 8as comlete

Contents

+ *ase summary + Main issue + Pro,lem Statement + (nalysis of solution alternatives  H Different #ackgroun) shoul) %e ,nite)  H The (est IT System  7rganiAation should ,e *hosen  H *hoosing Data *enter facing;

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Decision factors : 6 Cost savings vs7 functionality 6 Short term savings vs7 long term strategy 6 &o time constraint ;not customer6facing=

 Time

Contents

+ *ase summary + Main issue + Pro,lem Statement + (nalysis of solution alternatives  H Different (ackground should ,e $nited  H The (est IT System  7rganiAation should ,e *hosen  H Choosing Data Center 4ocation

 H Peole Management + &'ecuti"e Summary

Data Center 4ocation Merged comany need only single location data center 

 --center facility in !eston could ,e leased out an attracti"e rice

Decision  Indianaolis 8as clear cost sa"er 

Contents

+ *ase summary + Main issue + Pro,lem Statement + (nalysis of solution alternatives  H Different (ackground should ,e $nited  H The (est IT System  7rganiAation should ,e *hosen  H *hoosing Data *enter