Mergers and Acquisitions: The RECS Case Essay

RECS project developed out of the results of the merger of two particular insurance companies, in Quebec and Montreal. The merger occurred as a result of prospective potential for subsequent profitability among the two companies and a significant competitive advantage over the competition. However, the reality of the merger was causing issues for everyone involved. There were problems with customer service, meaning that the team members had to adequately deal with a range of skewed products and distribution networks from the systems at large. Compatibility issues were the norm, particularly with the IT systems in use, which were inherited from a range of merged companies as there wasn't full integration and a host of skewed precuts and networks were derived from the old systems, all without the proper support structures in place to make them work at the highest levels of their abilities. The compatibility issues presented more problems than many people even expected: for instance, as a result of the fact that most client files didn't receive full integration, employees have to provide service for clients that they didn't have full background and information for. This quickly created a situation which damaged the image of the company. For example, as the case study reflects, "On a few occasions, our employees processed files that didn't belong to us, and conversely, we told some of our new customers that they didn't have a file with us. So we found ourselves in a state of confusion that was rather disconcerting" (Roy et al., 2006). In these cases, the management had enough sense to realize that there needed to be a massive change, and one based on the present and immediate needs of the company at large -- a fundamental transformation of all work processes (Roy et al., 2006). Product lines were the previous and main means of distribution, with institutional, direct and group flows of processing being primary.

Up to this point, TransInsurance Inc. had generally just arranged all engagements in business according to product lines: institutional, direct and group, all led individually among account executives or particular teams around Canada. Prior to the merger, this method was sufficient at producing results which were satisfying, but once the merger occurred, this structure was no longer able to fulfill the more complex demands of the insurance world in the 2000s.

Two Main Objectives of RECS

The overall goal of the RECS project was to restructure the customer service department as a whole and also engage in a certain level of marketing of insurance products in the arena of TransInsurance. The project was designed to help with the rearrangement of massive product lines within two major service centers: the call center which specialized with in-call and the claims management center.

The first phase of the project focused on the development of a customer service center and the rearrangement of a second-line service center so that there was access to better and more improved ranges of service offered to clients (Roy et al., 2006). The second project goal specialized in the yearly savings of $3 million dollars so that claims could be better optimized through the processing of superior methods and through the minimization of service requests. This type of optimization would be focused most totally at the expertise and claims processing center and would warrant the specialization of staff members so that there could be a major reduction in staff members assigned to these issues (Roy et al., 2006).

Factors and Failure with First RECS Attempt

One of the major problems with the First RECS attempt revolved around the fact that InfoSmith made use of particular one-size-fits-all…