M&A is a strategic bet for the growth and strengthening of companies in the market, increasing competitiveness, aiming to stand out from competitors and win an ever-larger audience.
In addition to planning financial issues, the synergy between processes, and the transition period, it is also necessary to evaluate points related to IT, such as information exchange and system integration. This aspect often does not receive the due attention, and in today’s article, we will show what role IT plays in the success of these operations. Check it out!
Why should we not forget about IT?
Despite meticulous planning, an operation can fail for various reasons, ranging from insufficient diligence to differences in company culture. A potential cause that is often overlooked is when IT is incorporated into the process too late, which can result in a series of problems in the future.
Digital transformation has impacted all market sectors, and its influence is evident in business operations. Companies are digitizing and automating all their value chains and processes to speed up operations, meet customer demands, improve cost savings, and overall efficiency. Despite this, IT is often left out of initial conversations and sometimes fails to secure a place at the table. The impact of not being included in comprehensive strategic discussions can be costly, as integration pieces may be missing.
The integration of technologies and systems is crucial to successfully conclude a deal, but the migration process can vary considerably depending on the elements present in the involved IT portfolios. For example, consider a company interested in acquiring a competitor. The acquirer may see the M&A as an opportunity to significantly increase its market share, diversify its product portfolio with new additions, enhance brand recognition, expand into new regions, and optimize costs by eliminating redundancies in back-office operations. However, if the organizations use different Enterprise Resource Planning (ERP) systems or have very distinct IT operational models, this will require a complex integration plan to progressively migrate and align the systems during the operation.
The importance of these systems is often neglected until the deal is closed, leaving a very tight schedule to start the integration process. CIOs need to act quickly to integrate new employees, who in turn will need to learn new processes and adapt to a different work environment.
IT must be included as early as possible
M&A requires change management at all levels, making it essential to plan IT integration from the start to avoid risks and challenges that could lead to a deal’s failure.
The role that technology plays in negotiations is increasingly critical in the post-pandemic world. Organizations can successfully manage changes throughout the M&A process by using technology to bridge different systems.
This ensures that the team has the right tools and support to be productive, and that new employees are introduced to new tools and processes through well-crafted integration sessions. Although the merger and acquisition negotiation process can be complex, business leaders who integrate IT into all aspects of the process are positioning their organizations for a seamless transition and to achieve business growth.
Changes require expertise
The success of M&A processes depends on the speed of both the buyer and seller, as well as the complexity of the business in question.
At 3Capital, we work in the interest of maximizing business value and recognize that well-done integration is the key to successful negotiations.
Count on a team of experts along with the founder, who follows each step, ensuring a quality service and commitment to results.
