Solution Brief: Increasing Agility for Mergers and Acquisitions

Executive Summary

In today’s competitive business climate, mergers and acquisitions have become a key component of many growth strategies. Globalisation, acquisition of new products and services, and enhanced customer footprints are all opportunities that come with mergers and acquisitions.

But M&A is not without downside and risk. Much of this risk stems from technology, and can lead to delays, unproductive employees, underserviced customers and security vulnerability if not carefully managed.

Identity is the element that links so much technical and human change inherent in M&A. As such, seizing control of identity offers a unique opportunity businesses to ensure a positive return on investment from M&A, leading to efficiency, accelerated growth and enhanced security.

M&A is a Strategic Source of Value Creation

The past 30 years have seen a near exponential increase in global deal volume. Businesses increasingly see mergers and acquisitions as strategic tools to increase shareholder value, and there is no reason to think that trend will abate. A recent Deloitte survey found that:

75% of surveyed executives expect deal activity to increase

64% expect to see deal size increase and

73% expect to divest a business

 

WPR MA agility 1

Accelerating Global M&A Activity

But Complexity, Technology, can be Barriers

As deals get more prevalent and larger, they naturally get more complex. That complexity comes at a cost, manifesting itself in the form of issues along a number of dimensions including:

Geographical. Businesses will find themselves going to market in new geographies, which introduces traditional challenges like language barriers and cultural norms, but also digital challenges like network latency and data residency requirements.

Technology and services. Businesses going through M&A transformation may encounter delays to release new products and services as processes are aligned, which could lead to a loss of innovation during the integration period.

Human capital. Users of merging or acquired organisations frequently have a poor transition experience, dealing with delays in access to surveys as well as changes in information systems, not all of which are deemed positive. If not managed carefully, this can lead to attrition.

Security. During a period of flux and integration, technology teams are often stretched thin. Integration can also lead to technical points of vulnerability, which makes companies going through M&A an attractive target for hackers.

It is not surprising that IT, as a result, is frequently a costly barrier to effective M&A. Executives agree, indicating that the greatest issues they face with legacy systems are efficiency, cost and speed.

 

WPR MA agility 2

IT can be a costly barrier

 

Efficiency, cost and speed can all be sources of technological frustration. As a result, 84% of organisations do not realise the expected value of M&A activity.

Speeding Time to M&A Value

Recognising that these technological hurdles can significantly impact the return on a deal, progressive organisations have developed a set of policies and processes they use to streamline the M&A process.

 

WPR MA agility 3

M&A value drivers

 

These projects run the gamut across people, processes and technology and include:

Domain consolidation. As new businesses are acquired, the number of domains under management increases. Smart organisations have dedicated teams focused on consolidating and integrating domains.

Adopting new applications. Integration is often an inflection point to improve the technological footprint for all employees, customers and partners. The path of least resistance is to simply adopt the technology stack of the acquiring company, but a best of breed strategy presents an opportunity to deliver additional value, at increased complexity.

Automating change management. With the rapid flux in organisational charts, user roles and attrition that comes in M&A, it is critical that businesses become adept in rapid and accurate change.

Enhanced security response. Due to the rapidly changing technological and access profile of the businesses, security response becomes critical. Companies that anticipate security vulnerability will be able to reduce risk by reacting faster.

Creating dedicated projects to address these areas of M&A change is a great first step in improving execution and driving return on M&A a