In recent years, the business world has shown resilience in the face of pandemics, geopolitical conflicts and economic shocks. The appetite for growth is recovering and in the first quarter of 2024, mergers and acquisitions (M&A) activity increased by 58% in Europe compared to the same period last year.
Mergers and acquisitions tend to bundle together diverse product portfolios, operating models, and critical resources such as IT systems and talent pools. Integrating and streamlining all of these elements is something companies need to consider very carefully to ensure the best outcome.
In these scenarios, perfect alignment between a company’s technology strategy and its business objectives is non-negotiable. In the past, IT leaders were seen as mere drivers of a company’s IT function, but today they are much more than an isolated business function working quietly in the background. Today, IT leaders must be transformative and become the true bridge between business objectives and IT infrastructure in all its increasing complexity. Let’s dive deeper into the key technology shifts involved in the M&A process.
The landscape today
Complexity increases as more software is added to the technology stack. At the enterprise level alone, companies saw their average number of applications increase from 843 in 2021 to 1,061 in 2023, according to Salesforce. The pace of industry regulation is exacerbating technology proliferation and forcing companies to be on the cutting edge when it comes to optimizing their enterprise technology.
For example, regulations such as the EU’s Digital Operational Resilience Act (DORA) require companies to demonstrate full visibility into their IT operations, including complete oversight of how risks and controls connect to the IT estate.
Tackling a complicated trilogy
When you’re faced with a triple headache: a bloated technology stack, merging business units with different ways of working, and evolving corporate strategic needs, the only sensible thing to do is to streamline operations. To do that, you need a powerful roadmap, and that can’t happen without a 360-degree view of your IT landscape. This is where information management comes into play.
It can also help you identify legacy or mission-critical applications and play a key role in planning modernization roadmaps and your path to improved business resilience. SPM offers value to IT leaders, but its benefits extend across the entire organization. It offers much-sought visibility into the application portfolio, but its impact extends far beyond. Through SPM, organizations can easily identify deduplication opportunities by analyzing the important business processes and business services offered by the application portfolio.
Make IT easy for non-technical staff involved in M&A
While SPM enables companies to have a clear picture of the redundancies that exist in the IT portfolio of both the acquirer and the acquired, the ease of use of SPM tools has a major impact on the delivery of an M&A process.
As business functions become more digital, IT teams could lose critical jurisdiction over the applications that drive the business. Companies must fight the technology skills gap, a phenomenon that has seen 93% of UK businesses report an acute IT skills shortage according to Forbes Advisor. The key takeaway here is that technology must be easy to use even for non-technical staff. Always remember that a company’s IT strength, including its cybersecurity posture, is only as strong as its least tech-savvy employee.
This means that features like intuitive user profiles, streamlined navigation, and articulated information search give more people transparency into the IT landscape and the ability to participate in strategic planning and management activities around the digital product and service portfolio.
In addition, innovation in the form of intelligent databases and individually configurable views and reports allow each user to self-determine the content and format of information, reflecting the uniqueness of each person's responsibility throughout the decision chain of corporate M&As.
Saving on technology costs and speeding up M&A timelines: Yes, please!
During a typical M&A program, a number of departments are consulted, including legal, risk, compliance, HR and IT. Technology is the foundation for post-merger success, as companies need to know two things: first, that they will have technology portfolios they can rely on, and second, that the technology will be managed efficiently and effectively.
Having complete visibility across IT means businesses understand which applications and processes can be retired, which are critical in terms of usage, and which are vulnerable when compared to licensing terms. This saves employees time, additional licensing and support costs, and lays the foundation for business continuity and growth.
With full portfolio oversight, IT can also immediately protect critical applications, data and business processes. If a threat arises, damage limitation can be quickly activated, potentially reducing the cost of remediation and regulatory penalties imposed on a non-compliant company.
Don't forget about technology in the M&A process
As businesses continue to grow and evolve, effective disaster risk management is vital. More complex IT environments require more sophisticated tools to manage and optimize them. IT investments can only be aligned with business objectives if there is complete transparency. Disaster risk management technology plays a critical role in enabling organizations to assess their IT environments, identify potential vulnerabilities, and develop effective risk mitigation strategies.
Companies need the right tools to better anticipate and respond to changing internal and market needs, adapt more quickly to changes in customer and competitor behavior, and gain a quick competitive advantage, especially if they are venturing into a mergers and acquisitions process.
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