M&A Success: Why Uncovering Technology Dynamics is Essential

In recent years, the corporate world has demonstrated resilience to pandemics, geopolitical conflicts and economic shocks. 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 bring together diverse product portfolios, operating models, and critical resources such as IT systems and talent pools. Integrating and streamlining all these parts is where companies need to be careful to ensure the best outcome is achieved.

In these scenarios, perfect alignment between a business’s technology strategy and its business goals is non-negotiable. IT leaders were once viewed as just the engine of a business’s IT function, but today they are much more than a separate function of the business that works quietly in the background. Today, IT leaders must be transformative, becoming the true bridge between business goals and IT infrastructure in all its increasing complexity. Let’s delve into the key technological upheavals involved in the M&A process.

Steve Ponting

Today’s landscape

Complexity increases as more software is added to the technology stack. At the enterprise level alone, companies saw their average number of apps grow from 843 in 2021 to 1,061 in 2023, according to Salesforce. The pace of industry regulation exacerbates the expansion of technology and forces companies to be at the forefront when it comes to optimizing their technology.

Regulations such as the EU’s Digital Operational Resilience Act (DORA) require companies to demonstrate full visibility into their IT operations, for example. This includes full oversight of how risks and controls are connected to IT.

Approaching a complicated trifecta

When faced with the trifecta headache of a bulging technology stack, merging business units with different ways of working, and evolving strategic corporate needs, the only healthy thing to do is to streamline operations. To do this, you need a strong roadmap, and that can’t happen without a strong 360-degree view of your IT landscape. This is where SPM does its job.

It can also help you identify legacy or core applications and play a key role in planning both your modernization roadmaps and your journey to improving business resilience. SPM provides value to IT leaders, but its benefits ripple throughout the organization. It provides that much-sought after application portfolio visibility, but its impact extends far beyond. Through SPM, organizations can easily identify opportunities for deduplication by analyzing the business processes and important business services provided by the application portfolio.

Make IT easy for non-technical M&A staff

While SPM allows companies to have a clear picture of the redundancies that are in the IT portfolio of the acquirer and the acquired entity, the use of SPM tools has an important impact on the completion of an M&A process.

As business functions become increasingly digital, IT teams may lose critical jurisdiction over the applications that power the business. Businesses need to combat the technology skills gap – a phenomenon that has seen 93% of UK businesses report an acute IT skills shortage, according to Forbes Advisor. The main takeaway here is that technology should 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 such as intuitive user profiles, simplified navigation and articulated information search give more people transparency into the IT landscape and the ability to participate in strategic planning and management activities across the portfolio of digital products and services.

Furthermore, innovation in the form of intelligent data workbenches and individually configurable visualizations and reports allow each user to determine the content and format of information themselves, reflecting the uniqueness of each person’s responsibility along the enterprise M&A decision chain.

Saving technology costs and speeding up M&A timelines – Yes, please!

Various departments are consulted during a typical M&A program, including legal, risk, compliance, HR and IT. Technology is the cornerstone of post-merger success because companies need to know two things. Firstly, that they will have technology portfolios that they can rely on and secondly that the technology will be run effectively and efficiently.

Having full visibility across all of IT means companies understand which applications and processes can be retired, which are critical in terms of use, and which are vulnerable when mapped against license terms. This saves employees time, additional licensing and support costs, and creates a path for business continuity and growth.

With complete portfolio oversight, IT can immediately protect critical applications, data, and business processes. If a hazard occurs, damage limitation can be activated quickly, therefore potentially reducing the cost of remediation and any regulatory penalties imposed on a non-compliant company.

Don’t forget technology in the M&A process

As businesses continue to grow and evolve, effective SPM is vital. More complex IT landscapes require more sophisticated tools to manage and optimize them. IT investments can only be aligned with business goals if there is full transparency. SPM technology plays a critical role in enabling organizations to assess their IT landscape, identify potential vulnerabilities, and develop effective risk mitigation strategies.

Businesses need the right tools if they want to better anticipate and respond to changing internal and market needs, adapt more quickly to changes in customer and competitor behavior, and gain a competitive advantage quickly, especially if they venture into a process of mergers and acquisitions.

We list the best data visualization tools.

This article was produced as part of TechRadarPro’s Expert Insights channel, where we showcase the best and brightest minds in the tech industry today. The views expressed here are those of the author and are not necessarily those of TechRadarPro or Future plc. If you’re interested in contributing, learn more here: https://www.techradar.com/news/submit-your-story-to-techradar-pro

M&A Success: Why Uncovering Technology Dynamics is Essential

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