Now more than ever, rapid integration is key in mergers and acquisitions. Failure to integrate quickly and effectively not only costs money; it can even torpedo entire deals. Cloud solutions enable companies to accelerate M&A transactions and enjoy a host of benefits besides. If you’re contemplating a merger, combining your M&A and cloud strategies could be just the approach you’re looking for. Read on to find out more.
M&A: Time is of the Essence
In an earlier blog, I looked at some of the many benefits offered by cloud solutions in the hospitality and travel sector. In this month’s post, I’m going to focus on how these solutions can help drive successful mergers and acquisitions – and, in particular, how combining your cloud and M&A strategies can accelerate integration.
These days, companies expect mergers and acquisitions to deliver considerable business benefits. But to reap these rewards, it’s essential to act fast. So, adhering to often highly ambitious timelines is key if you want to avoid jeopardizing your investments. And it’s especially important to ensure that integration is achieved quickly and effectively in the wake of your merger.
It’s no surprise, then, that organizations considering M&A are constantly in search of new and reliable ways to accelerate integration and make. And it’s here that tech comes into play.
IT Complexity Puts the Brakes on Integration
Technology is a prime factor in post-merger integration, with IT infrastructure playing a particularly important role. However, many companies still find themselves saddled with traditional on-premise infrastructures that can seriously hamper integration.
One major disadvantage of IT environments of this kind is their complexity. Since they have often evolved piecemeal many years, they can comprise a large number of redundant applications and standalone solutions. Identifying these and putting them out to pasture is a time-consuming process that can slow integration efforts to a crawl.
The challenge is even more daunting if both parties in an M&A transaction run on-premise solutions. In such cases, integrating the two IT environments can be extremely costly and time-consuming – making it difficult, if not impossible, to achieve expected ROI.
In the worst-case scenario, a deal may fail entirely owing to the sheer complexity of integrating two legacy on-premise IT infrastructures.
The Solution: Leveraging the Cloud in Your M&A
But help is at hand – in the form of cloud solutions. Organizations that run their IT infrastructures in the cloud can greatly reduce associated complexity and costs, enabling them to keep to challenging timelines and leverage the benefits of their M&A faster and more effectively.
Acquirers who move their infrastructure to the cloud during a merger can integrate acquisitions far more easily than would be possible in the traditional on-prem world. What’s more, shifting to cloud solutions makes it easier for companies to establish a single ERP instance, accelerating integration of operations, eliminating uncertainties, and helping realize the value associated with M&A.
Quantifiable Benefits in Terms of Cost and Speed
Cloud solutions also drive post-merger transformation by reducing lead time to core IT services. What’s more, they deliver major cost-savings since they require no upfront capital investment. And because no additional hardware is needed, companies not only save the costs of purchasing and installing new infrastructure – they also gain greater scalability and flexibility.
The figures speak for themselves: When it comes to cost-savings and timelines, Accenture research has found that cloud cuts IT spend by 30% and also accelerates IT delivery in mergers and acquisitions by 30%.
M&A: The Ideal Opportunity to Move to the Cloud
Whether or not they’re engaged in an M&A deal, businesses are now under growing pressure to accelerate migration to the cloud. Mergers and acquisitions are an excellent opportunity to make the move. Transitioning to the cloud not only enables companies to say goodbye to unnecessary IT service agreements, it also helps them hone their competitive edge through greatly enhanced agility at significantly lower costs.
Small wonder, then, that 58% of executives polled in a recent survey by Accenture expect the use of tech in M&A deals to accelerate transformation to digital business and operating models. Incorporating cloud into your M&A journey lets you enjoy additional advantages by embarking on this transformation even earlier.
A Hot Topic in Troubled Times
One of the many things the ongoing pandemic has highlighted is the vital role of cloud solutions in achieving business resiliency – for example, through home-working models. With 19% of companies currently building resiliency to weather the recession and a further 40% switching from crisis mode to post-crisis growth and resiliency, the cloud has never been more relevant than it is today.
If you’d like to learn more about the benefits of cloud solutions in M&A deals, feel free to reach out to me. I’ll be happy to help you discover how combining M&A and cloud strategies can deliver tangible benefits for your business.