After COVID-19, we’ve seen multiple disruptions across different industries. And this has contributed to an increase in Merger & Acquisitions (M&A) opportunities for businesses. In fact, in 2021 the number of M&A deals touched an all-time high of 65,000 (Source).
- Across geographies, the Americas market leads the trend, with 48% of worldwide deal value, followed by Europe, Middle East and Africa
- Industry verticals such as technology, media and telecommunications (TMT) accounted for 30% of the total M&A deals in 2022, followed by real estate and industrial sectors with 13% and 11%, respectively.
The Role of Technology in M&A Transition
Mergers and acquisitions are a complicated affair. And the integration of technology is a major challenge throughout an M&A transition—a period when your security, compliance and employee productivity can get disrupted.
Generally, we overlook IT integration during the initial planning phases of an M&A activity. This results in increased IT costs and lower productivity. Mismanaged IT integration adversely impacts your overall M&A program. And hurts your business goals and partner involved in the merger.
No wonder you must develop successful IT integration strategies before a merger. Doing so, helps you reduce redundancy and data loss, while enhancing security and ensuring timely, cost-effective delivery of your M&A programs.
As a business leader, your priority should be to adopt a balanced approach in IT integration and mapping resources. And you should strategically evaluate your key IT components —shared data (specifically customer data), security, digital workplace services, ERP, cloud and infrastructure solutions—for a seamless and cost-effective transition.
Challenges in The M&A Process
Earlier, mergers and acquisitions were business-driven. And information technology used to be a reactive subset. But today, IT has emerged as a key enabler for M&A programs.
Defining IT strategies during M&A is crucial. And your senior management must decide how to manage shared data, applications, software licenses, platforms, documents, and other integral services that both the parties will require for the merger.
At the same time, you need to quickly migrate and maintain services at optimum levels—both during and after the transition process.
Here are some of the major challenges that you may face during such engagements:
- The inability to manage shared data and applications
- Delay in the delivery of M&A programs
- Complexities and delays in IT hardware integration
- Lack of adequate security measures to ensure compliance and data integrity
- Organizational change-related issues such as dealing with cultural shifts
When it comes to your priorities during an M&A process, try to:
- Stabilize operations
- Find replicated elements—people, processes and technology
- Complete M&A operations in the stipulated timeframe
- Develop future-proof digital environments
- Identify components for new development and change
What’s an Ideal M&A Framework?
To seamlessly migrate your services during M&A transitions, you need to develop an M&A framework. This framework should include a comprehensive plan for your assets, licenses, third-party contracts and end-user solutions. It should encompass people, processes, tools and technology. And ensure enhanced business and customer experience, both during and after the carve-out process.
To facilitate the execution of your M&A programs, we leverage different set of solutions and IPs—U4X, CARE, EdgeLITy, FinOps services, CloudSMART, DRYiCE and Innovation Garage. These offerings help you modernize your IT platforms and embrace digital initiatives with confidence.
What Are The Credible IT Strategies during An M&A Initiative?
For seamless business functioning, keep in mind these three key IT strategies during your M&A process:
Uphold the IT infrastructure and resources at the parent organization
Build a new greenfield setup
Use the acquiring organization's IT environment and infrastructure
Remember, the way your core strategy is built around your people, processes and technology has a big impact on the execution of your M&A program. And this strategy is necessary to ensure a successful transition. Here’s a comprehensive M&A strategy you can follow:
|-People transition and capability fitment
-Organizational development and change
-Organization’s structure, governance and policies around customers, suppliers, products, employees, partners, etc.
|-IT process assessment
-Business process analysis
-Process management framework
-Security and regulatory compliances
-Business continuity assessment
-Application portfolio decomposition
-Infrastructure and platform identification
-Tools and automation solution
A Real-life Use Case
A Swiss multinational corporation—engaged in robotics, power, heavy electrical equipment and automation technology—decided to separate itself from its parent organization, to establish an autonomous business entity.
Based on a detailed assessment, we helped the organization design a network system for its data centers and 400 remote locations. The network system focused on its separation and migration strategy. And the entire program was executed in five tracks:
- End-user services, and
- Service integration
We leveraged our in-house frameworks and IPs to provide a robust solution for a seamless carve-out process. As a result, the customer achieved a significant level of site consolidation and automation. They were able to significantly reduce tickets and the mean time to repair (MTTR), which improved their business and user experiences.
It’s important that you recognize the deep impact technology can have on your M&A executions. Because what technology you use can make or break your post-merger prospects. For best results, consider working with an experienced service provider to ensure a smooth transition journey.
When you work with us, we keep in mind your crucial business transformation levers during your M&A journey. And ensure an optimum utilization of your people, processes and technology solutions during the transition.