Finance Monthly April 2019 Edition

Mergers and Acquisitions are complex and high-risk undertakings. However, if successful, M&A can fuel company growth through the addition of new products, markets and customers and result in increased profitability. In competitive and crowded marketplaces, M&A is increasingly being viewed as a strategic route to gain coveted market share, and research shows that this type of activity is surging in the Financial Services sector. According to Deloitte, the drivers that were favourable for bank M&A in 2018 — tax reform, increasing interest rates, digital investments and a business- friendly regulatory environment — continue to make a strong showing, and 76% of M&A execs in US firms and 87% of those in private equity (PE) expect the number of deals they will close in 2019 to increase. Some 70% are anticipating bigger deals, with 51% predicting them to be worth $500m-$10bn, compared to 38% in 2018. However, previous deals show that the process has hardly been plain sailing – 40% of those surveyed by Deloitte claim half of their deals over the past two years have failed to generate expected value or ROI. From eBay and Skype to Microsoft and Nokia, the past 20 years have been littered with multi-billion-dollar mistakes. Here, Mike Walton, CEO and Founder of Opsview, delves into the important role that IT operations have when it comes to planning your M&A strategy. IT Operations fuels business success An increasing number of business execs cite ‘gaps in integration execution’ as the reason behind M&A failures. The process of combining two businesses, its operations, staff and culture is extremely difficult in both principal and practice, and, whilst it is certainly not a silver bullet, the importance of involving IT as early as possible in M&A proceedings would certainly make integration a smoother process. At the end of the day, IT sits at the very centre of any organisation, supporting all aspects of day-to-day operations and innovation-driven services, fueled by digital transformation projects. That makes centralised IT operations’ management and monitoring critical to any M&A process and involvement needs to start at the discussion stage so that experts can provide visibility into core systems to support successful M&A planning and integration. According to Ernst & Young, the role of IT fundamentally underpins the strategic objectives of M&A activity, whether that’s increasing market share, entering newmarkets, gaining new customers or consolidating product ranges. Acquiring firms, therefore, THE ROLE OF IT OPERATIONS IN DRIVING M&A ROI Mike Walton, CEO and Founder of Opsview 30 www.finance-monthly.com ASK THE EXPERT - M&A