Mergers and Acquisitions (M&A) have grown in frequency and importance. As per the Institute of Mergers, Acquisitions, and Alliances, capital markets witnessed a record-breaking acceleration in M&A deals in 2018, and the same momentum got carried over to 2019.
M&A transactions allow companies access to whole new markets, products, technology, and new R&D teams, among others.They can consolidate assets to grow market share, accelerate efficiency, and eliminate costs and competition without doing much heavy lifting.
However, executing a merger and acquisition involves several hurdles. Let us delve into the hiccups and find out how modern integration can serve as a leverage during an M&A:
Complexity: Though mergers and acquisitions offer strategic expansion and well-established benefits associated with it, consolidated organizations often expose themselves to a number of unintended and unknown risk factors, such as complexity. When managed incorrectly, complexity leads to brittleness and high costs. Moreover, it burdens IT teams with additional operational activities, reducing their productivity. This greatly impacts the overall performance and time to revenue. Therefore, organizations planning for a merger or acquisition need to organize and handle their assets & systems by introducing standardization and consistency. An integration platforms can help companies do that to handle rising complexity and capitalize on M&A benefits.
Data: Handling post-merger acquisition data is difficult as a number of factors play into effect:
- How same, or different, is the merged data?
- What are the similarities and differences in terms of formats, standards, etc.?
- How ‘compatible’ and ‘secure’ is the combined data?
All these factors make it difficult to extract value from data, making organizations difficult to work with. Modern-day integration platforms can be used to deliver value from the combined data while keeping the authenticity intact.
Speed: Companies want to absorb an organization into their current portfolio as quickly as possible. This process of “company onboarding” can lead to loss in revenue if delayed. As soon as the M&A deal closes, enterprises need to integrate their data and applications without delay as every day counts in the transition phase. Enterprises can rely on a modern integration platform that facilitates faster integration, thus shortening the transition phase during a merger.
Modern Integration is the Solution
Integration solutions are the key to helping enterprises overcome the M&A hurdles mentioned above. It does so by helping businesses function as a single, efficient entity to meet their sky-high expectations and tight timelines.
Companies simplify mergers and acquisitions by using integration platforms to integrate data, connect business-critical applications, and facilitate data exchange across the newly formed organization. They can rely on SaaS integration technology to connect disparate systems and create a consolidated view of the business.
For a majority of organizations, searching for ways to connect and govern multiple clouds and applications in a condensed timeline can cause discomfort. A modern, centralized integration strategy can prove useful as it helps bridge cloud and on-premise applications by providing the agility of the cloud with the security of on-premise.
To conclude, companies planning for a merger or acquisition need to deploy a modern integration platform to achieve faster revenue realization, accelerated business consolidation, and maximized business outcomes.