Mergers and acquisitions present businesses with very specific challenges – one of which is how to effectively transition IT systems and processes into a new corporate entity and hit the ground running.
In a merger or acquisition, there are certain business imperatives that drive priorities; essentially it is about bringing together the business processes of two distinct organizations, typically either to create either a unique offering, consolidate current operations, or to expand on existing capabilities to, for example, access a new market. In such scenarios, there will be a desire to quickly and efficiently integrate the businesses in order to gain synergies and capitalize on business advantages for the newly merged organization.
Ultimately, several particular things have to happen but to read a generic news report about a merger or acquisition they tend to overlook details and the “how” of the event. The accounting headlines are reported, the financial side, and often the sales and marketing figures or outlook are covered too – but one area of real value which usually gets omitted is IT. Yet the importance and impact IT will have is often critical to the success of the newly merged business. Technology provides a key foundation for most businesses; whether supporting the organization’s value chains and business workflows, enabling effective collaboration, or directly providing customer services and thus being essential to the customer experience. As such IT will have a profound impact on the newly merged business.
Technology at the heart of a successful M or A
In a merger or acquisition a key component is how to manage integrated IT services, apps, business processes and other elements that fall under the IT umbrella. For example, in your M or A, you typically find two infrastructures and different technologies, two supporting organizations and associated hierarchies, all with different ways of doing things. There will typically be an established IT department ‘in-situ’ in each organization, so here the challenge becomes one of successful integration. The established way of doing things underpins the existing business, and the challenge the new organization faces is how to successfully crunch them together into a functioning whole.
In this situation, the greatest benefits come from synergies – collaboration and creating new services – and these rely on IT. Some M&As don’t always consider the importance of them. But it is here that cloud computing comes into the M&A equation.
Using cloud to achieve more
As M&A activity continues to grow, so cloud computing provides organizations with the ability to achieve much more, accelerating the integration process. The simple fact is that when trying to mesh two distinct IT operations together, bringing together two or more highly complex, interdependent IT systems and getting them to talk to each other and work smoothly isn’t an easy task. So common platforms make real business sense in such scenarios. Plus the simplicity of cloud and standardizing on a common IT platform offers the added benefit of making the next bolt-on acquisition even faster – the business becomes truly agile.
An ever-changing landscape
When cloud first came along it was a disruptor. It upset the traditional IT way of doing things, and quickly established itself as a vital new tool. The technology space continues along those lines, with disruptive ‘start-ups’ (well-known examples include Uber and AirBnB) challenging established business models by embracing technology to match ‘supply and demand’ more effectively and improve or create new user experiences. Whilst early innovators have been based on a B2C model, there is growing evidence of emerging B2B models that will be equally disruptive for large enterprise and long-established business models.
As we continue forward, companies conducting mergers and acquisitions will need to think innovatively and be more imaginative too – in terms of global platforms, global synergies and common ways of working – all of which are enabled by cloud.
This marrying together of two IT systems is about removing the past and creating a new way of working which can be applied to a new acquisition or new, combined entity. Cloud’s standardized platform makes integration as fast as possible – which is vital in an M or A.
Making the right choices
Driving real value from the merger or acquisition lies here, the integration. The two entities need to combine their strengths and collaborate to make the process as swift and smooth as possible. They depend on IT for fast integration and so need a cloud-ready service partner to help deliver this.
One notable Orange customer is a global Professional Services firm with over 5,000 employees that has undertaken a variety of M&As over the past decade, and this rapid growth had caused a fragmented IT infrastructure. By designing and implementing a secure Private Cloud solution with seamless integration across four data centers, the company was able to enhance security of its data, address compliance issues and reduce costs – using a scalable platform which sets it up for further growth in future.
And this is the opportunity; by choosing the right cloud solution, companies can invest in a game-changing way of delivering IT, eliminating the inefficiencies of legacy infrastructure and thereby provide IT that is a ‘game changer’ for the ‘new’, combined organization. It offers the chance to create a new blueprint for success going forward.
To read more about Orange Business Services cloud computing expertise and experience, please visit: http://www.orange-business.com/en/embrace-the-cloud