The Keys to a Successful Merger Completion
Jumping into a big company merger can be daunting, and while legal and financial steps take place, actual company operations, staff and systems are also a massive part of the merger. Here Ian Currie, Director of EMEA business development, Dell Boomi walks Finance Monthly through some key considerations to make in the internal merger process. […]
Jumping into a big company merger can be daunting, and while legal and financial steps take place, actual company operations, staff and systems are also a massive part of the merger. Here Ian Currie, Director of EMEA business development, Dell Boomi walks Finance Monthly through some key considerations to make in the internal merger process.
Merger and acquisition (M&A) activity is booming. One thing is for certain there are a number of considerations business leaders need to take before embarking on a merger or acquisition. In particular, in the current political and economic climate, it is critical for investors to analyse all aspects of the company in question – from its value to customers, its business model and growth plans, all the way through to its existing IT infrastructure.
Digital or die
In today’s digital age, ensuring that IT not only works, but enables and drives business performance has never been more important in a merger or acquisition. A slick, digital-first approach ultimately sets one company apart from the competition.
Failure to get digital right can have a disastrous impact for any company. New players in the industry have been designed with a ‘data-first’ approach and are agile and flexible enough to meet customer expectations. An inability for legacy businesses to digitally transform and adapt at speed – or at least faster than the competition – is, therefore, one of the main reasons businesses fail. In fact, two-thirds of executives predicting that 200 Fortune 500 companies will no longer exist in 10 years’ time due to digital disruption.
With this in mind, and as the world becomes increasingly reliant on the digital economy, it is clear that IT should not be an after-thought when considering an acquisition.
However, with some many apps across an organisation and with huge amounts of data sitting in various siloed systems, IT in M&A can be incredibly challenging. Coupling this with the size, scale and complexity of any takeover or merger, how can businesses ensure they are set up for success?
Merging not displacing
Following the completion of a merger, a company’s CEO will typically request the CIO to just ‘combine the IT systems’. This often involves a painfully long procedure in which all data, applications and systems are forced into the incumbents systems. By not necessarily taking into account the complexity and hurdles that must be overcome, these efforts often result in wasted time, lost efficiency and reduced performance.
What’s more, making this change also typically forces the acquired company to alter its business model, potentially altering the aspects of the business that made it such an attractive proposition in the first place. This mindset of one company, essentially, displacing another must change.
A merger shouldn’t be the prerequisite to changing how a business works – after all, they wouldn’t be making the acquisition if the business model needed change. Businesses, therefore, need to consider what each company can bring to the party. For example, while a firm can buy the incumbent’s immediate revenue, it cannot maintain and strengthen its existing customer relationships without real-time, accurate and intuitive business intelligence to ensure its communications with customers and prospects are contextually relevant.
By having a clear understanding of the digital landscape, executives can make smart decisions for new models of working, whereby IT can enhance operations rather than hindering them.
Integration is integral
Making an acquisition should enable firms to ‘buy’ immediate revenue and customer opportunities, but without the aid of business intelligence, companies may struggle to build on, or even, maintain customer relationships. After all, it is widely accepted that the easiest way to grow a company is to cross-sell and upsell to its existing customer base.
However, with customer data in silos, organisations cannot keep track of what information their teams are putting in front of them and how the relationship is being maintained. Without this knowledge, relationships can be weakened or even finalised. With dedicated technology to integrate data, apps and systems quickly and efficiently, companies can quickly regain control, ensuring all the dots are joined up.
Integration solutions prove invaluable here. They provide a fast and flexible user experience, centralising the creation, maintenance and updating of integrations through simple drag-and-drop interfaces that eliminate the need for coding – bringing both sets of date, apps and systems together at speed and with ease.
Only by ensuring processes, applications and data can be integrated quickly and effectively can companies truly benefit from their newly merged firms. If the predictions are correct and more companies look to merge in the coming months, it will be critical for businesses to look to integration solution to join the dots and set themselves up for success.