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Home / Insights / Blog / Here’s How IT Leaders Can Successfully Drive M&A Synergies
July 14, 2022 - by Synoptek
As organizations across the globe struggle to recover from the implications of the pandemic, the rate of Mergers and Acquisitions (M&A) is continuously snowballing. According to a PwC’s Global M&A Industry Trends: 2022 Mid-Year Update, at the start of 2022, dealmakers were riding high from the best year on record for global M&A, with more than 60,000 publicly disclosed deals breaking US$5tn in value for the first time.
The coalition of two or more organizations to form a stronger, more resilient, and agile enterprise is becoming one of the best ways to quell challenges the current environment presents. But when it comes to M&A, there is a lot that tech leaders must do to ensure synergies between technology and people and ensure success from the word go: from consolidating technology, aligning business and IT processes, and optimizing the workforce.
For successful Mergers and Acquisitions, tech leaders may choose to have M&A advisory or M&A consulting services or define a path themselves. If you choose the second option, here are some tips on how as an IT leader, you can successfully drive M&A synergies.
Although M&A has been a popular way for businesses to drive better efficiencies, enter new markets, and expand their customer base, the global crisis has made them extremely widespread. Amidst nationwide lockdowns and high economic uncertainty, they provide a wonderful way to cope with the tough economic conditions. The same report mentioned that many of the factors that underpinned the record-breaking M&A market in late 2021 and the first half of 2022 – such as supply chain resilience, portfolio optimization, environmental, social and governance (ESG) and, above all, the need for technology to digitalize business models – will remain influential for deal-making in the second half of 2022, but the approach to how these deals are done will require a new focus in an uncertain economic environment. Here are the many opportunities successful M&As present:
A successful M&A Due Diligence is not just about two firms coming together and becoming one; it requires substantial post-merger IT integration support across applications, infrastructure technology, and business processes. It is believed that to create a new organization, CIOs and technology leaders will need to constantly provide support and direction to achieve desired outcomes. They will need to create effective implementation strategies, have processes in place to manage potential risks, and participate as a core member in decision-making.
If you want to drive M&A synergies and want your efforts to live up to expectations, here are some tips:
When two businesses come together, their IT ecosystems also merge. However, to ensure you get maximum value out of the resulting IT infrastructure, it is important to consolidate, modernize, or simplify technology systems, data centers, and applications. Such consolidation along with rationalizing vendor contracts and renegotiating software licenses will pave the way for long-term cost savings while improving operational quality. Onboarding M&A consulting services can be of great help here to unleash the best results.
Given the complexity of IT integration in an M&A, establishing a robust PMO is a great way for coordinating project priorities, schedules, and available resources. By enabling consistent budget planning, project tracking, and roll-up of project status, PMO oversight can facilitate a real-time, updated view across the integration lifecycle while allowing IT leaders to get the most out of their efforts. For flawless implementation, companies often opt for M&A advisory services.
For long-term success and sustainability of your M&A efforts, instead of just implementing new technology or integrating existing systems, make sure to align tech processes with business processes. Ensure tech strategies are hardwired into current and future business strategies and initiatives and use IT as a catalyst to achieve combined business objectives such as improved financial performance or better marketplace competitiveness.
Given the extent to which customers can get impacted because of an M&A, make sure to put your customers at the center of every strategy you develop and every decision you take including diversifying your product portfolio, snipping off business units, and investing in new technology. Make sure every technology integration decision you take focuses on delivering customer value.
In addition to integrating and consolidating systems, it is also important for IT leaders to optimize the workforce for the newly created organization. Instead of having duplicate and redundant positions and roles, make sure to find ways to combine skills and talent. At the same time, employ practices to prevent committed and high-performing employees from quitting.
More and more organizations are taking the M&A route to improve efficiencies in today’s volatile business environment. But despite the benefits M&A provides to businesses, paving the way for a process-oriented culture makes it far easier to incorporate new products, applications, markets, and customers and build long-term synergies. As an IT leader, make sure to consolidate technology systems, establish a PMO, align IT and business processes, put customers at the center of every strategy, and optimize the workforce and witness your M&A efforts scale new heights.
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