IT is increasingly seen as a blocker during merger and acquisitions as IT implementations can grind transfers to a halt, but cloud technology is key to avoiding decreasing the deal value, an Accenture analyst advised.
Cloud technology “has got all the characteristics” IT is looking for when it comes to absorbing an entirely new businesses IT infrastructure during a merger, Accenture senior manager Chris Chapman told the Dreamforce conference in San Francisco yesterday.
Chapman warned: “IT is increasingly seen as a blocker in these kinds of projects.”
Cost cutting measures to cluster systems has put IT on the back foot when it comes to merging companies, he added.
“Over the last ten or fifteen years companies have pursued centralisation and consolidation of their IT systems all in pursuit of a cost saving agenda. The problem is, that has made merger and acquisition projects a lot more complicated.”
However, the Accenture lead believes platform-as-a-service (PaaS) products can eliminate this.
“With cloud i can just procure this computing power and do it in real time and I have access to rich functionality out of the box like Salesforce’s Service cloud.
“It allows us to behave much more smartly, develop projects using low capacity and just ramp up production volume.”
‘Every second counts’
“Every second counts when you are implementing an M&A deal. Minimising the amount of time between the signing and the deal completion is absolutely critical. If you are selling a business, you have signed the deal and you want to get your hands on the money as soon as possible - the interest alone on a multi-million deal is eye-watering, nevermind the opportunity costs of not being able to do the other objectives you have set that you want to use that capital for.
Chapman added that speed is just as crucial to the buyer too.
He said: “From a buyer perspective, speed is really important. As soon as you announce that deal is happening it creates uncertainty in the marketplace. Your customers start behaving differently, your competitors try to take advantage of you and the staff in the divested business can have morale issues.