M&A: How technology can help integrate increasingly complex business models

The global pandemic has driven the rapid adoption of digital business models in enterprises across many industry sectors as a means to ensure business continuity, cost efficiency, and customer engagement.

It’s an essential transformation but increasing dependence on the network and digital services means that M&A activity is becoming even more of a challenge for the CIOs and ICT teams involved. The complexity of integrating ICT infrastructure, teams, services, and service providers, can be huge – and all this while dealing with all the other business issues associated with the transaction. This may be a rising challenge in the Middle East and Africa region, where M&A activity has increased by 52 per cent in Q1 2021, compared to 2020, according to Mergermarket.

For more than a decade, the enterprise IT environment has been growing more complex with the rise of new hybrid technologies and services, provided by a growing number of suppliers. The challenge for CIOs is to get their multiple suppliers to work together effectively and overcome the complexity of governing them uniformly. In an M&A situation, the complexity is multiplied.

The Mergermarket Global and Regional M&A Q1 report shows strong M&A activity in the region, with 110 deals totalling $32.7bn. There was especially strong inbound investment from foreign bidders – the highest value of transactions recorded since Q4 2007 – with US investors and private equity very active. The tech sector was the most active in terms of value and volume, followed by energy, mining and utilities, along with financial services, pharma/medical/biotech, and industrials/chemicals.

According to Paul Pizzey, a business partner at Orange Business Services, mergers and acquisitions present businesses with very specific challenges including how to effectively transition IT systems and processes into a new corporate entity and hit the ground running.Mergers and acquisitions are about bringing together the business processes of two distinct organisations, typically to create either a unique offering, consolidate current operations, or to expand on existing capabilities.

There is a need to quickly and efficiently integrate the businesses in order to gain synergies and capitalise on business advantages for the newly merged organisation. It is often critical to the success of the newly merged business and as technology increasingly provides a key foundation for most businesses, it will also have a profound impact on the newly merged business. 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.

In a merger or an acquisition, there are typically two infrastructures and different technologies, two supporting organisations and associated hierarchies, all with different ways of doing things and the challenge becomes one of successful integration into a functioning whole. The greatest benefits come from synergies – collaboration and creating new services – and these rely on IT. This is where cloud computing comes into the M&A equation.

As M&A activity continues to grow, cloud computing provides organisations with the ability to achieve much more, accelerating the integration process. Common platforms make real business sense and the simplicity of cloud and standardising on a common IT platform creates the added benefit of making the next M&A event even faster, as the business becomes truly agile.

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 standardised platform makes integration as fast as possible.

Then, it’s all about orchestration of the newly integrated IT ecosystem. Multisourcing Service Integration (MSI) can help large organizations achieve seamless, end-to-end management of multiple IT service suppliers, manage this complexity and enable control over governance, transforming service delivery and achieving lower costs, reduced risk and improved performance. MSI addresses the key challenge facing the CIO – visibility at the network and IT level.

Driving real value from a merger or acquisition lies within the fast integration and then effective orchestration of the IT estate – a cloud platform and MSI are the tools to make it happen.

Mohammed Retmi is the head of regional domains, Middle East and Africa – Orange Business Services