Three ways to leverage existing technology investments in M&A

Three ways to leverage existing technology investments in M&A

If your business has seen a merger or acquisition, you’re not alone, with M&A activity ramping up in the second half of 2020.[1] More organisations across Asia-Pacific and, specifically, Australia, are likely to look to acquisitions to help adapt to changing work environments and market landscapes as 2021 unfolds. While the need to get on with evolving the business may be urgent, it’s important not to overlook due diligence, especially when it comes to evaluating your all-important IT systems and processes.

At Acclimation, we’ve identified three ways you can leverage existing technology investments in M&A to optimise and enhance the new merged entity:

  1. Preserve the existing data and value of your assets: understanding how much value and success is tied to the IT systems and processes of your company is crucial when it comes to M&A. With such complex entities being created through M&A, it’s becoming increasingly important to preserve the value inherent in the IT systems and infrastructure being acquired. The increasing business reliance on technology means that a lot of systems house and generate important business assets, including intellectual property and customer records, supply chain efficiencies, compliance and governance records, and even data relevant to forecasting and planning.
  2. Invest in planning time: there’s an incredible amount of value that might be tied up in IT systems that is never extracted or built upon, and M&As can collapse and lose value due to an inability to efficiently integrate systems, or through a desire to quickly get rid of an incumbent system during a merger. It’s critical to take IT infrastructure into account during the merger, and that proper assessment and planning is conducted when integrating systems. Leverage existing technology investments to ensure that no data or value is lost during an acquisition.
  3. Invest in solutions that integrate with multiple systems: for enterprise resource planning (ERP) software in particular, finding solutions that can integrate with different systems is key to business continuity, as this can facilitate data transference, making sure relevant information is carried over from existing systems during M&As. By leveraging existing technology investments and integrating existing systems where possible rather than replacing them, acquisitions will also be more successful when it comes to retaining talent. Technology ranks among the top 10 reasons that Australian workers leave their roles, and rapidly changing technology processes during M&As may result in a loss of core talent for companies.[2] Having difficult-to-use systems or IT infrastructure that results in double-handling can create poor working environments, and this can be a big driver for people changing roles. People are a huge asset for M&As, so losing people, especially because of poor technology choices, can lead to a significant loss of value for acquisition.

 

As working practices continue to evolve across Australian companies, you may be assessing the current environment and market standing. M&A may be the solution for your company to garner a more competitive market advantage and create a more sustainable business to ensure resilience in a changing economy. This process can provide your company with greater competitive advantage, by facilitating economic growth through acquiring new customer databases, greater geographic footprints, new economies of scale, or even IT assets, systems, and processes.

M&As help organisations become more strategic, creating complex assets and entities that deliver increased business and higher value over time. However, it’s critical that you don’t lose sight of the drivers for M&A and devalue the acquisition, especially when it comes to the IT infrastructure of the companies involved.

Integrating your ERP systems during mergers and acquisitions can position your new entity for success. An experienced partner, such as Acclimation, can help you manage the integrations for maximum return on investment. For more information, contact the Acclimation team today.

 

[1] https://www.pwc.com/gx/en/services/deals/trends.html

[2] Gartner, https://www.gartner.com/en/newsroom/press-releases/2019-03-13-gartner-says-outdated-technology-pushing-australian-w