His remarks are supported by the Deloitte M&A Trends, which reports that acquiring technology assets has surged to tie for the number two spot as the main strategic driver for M&A. Furthermore, technology is seen as the sector most likely to converge with others (26 percent) at about twice the rate of convergences expected in financial services, construction, energy, telecommunications and professional services, respectively.
As well as digital transformation and technology fuelling takeovers, political change is expected to be a fillip for dealmaking: 53 percent of Deloitte respondents expect an increase in deal activity post US election, and this market optimism is mirrored in Europe after a UK Brexit vote. While Britain’s exit from the European Union remains unresolved, both corporate and private equity survey respondents anticipated more deals both in the UK and EU.
In this heady landscape of ramped-up activity, being in a position to manage the separation and/or integration of IT and digital estates – where deal value chiefly resides – has never been more important. “IT is too often seen as a back office capability. Either the CIO or a direct report really needs to engage with the M&A team in order to mitigate risk. The more time that can be spent, planning the separation, (apps dispositioning, cloning or taking data out of centres) or end-state blue printing in the context of an integration, the less risk you put on the transaction. Any compressed timeline can increase the costs and risk,” warns Nigel.
This danger is very real for the majority of large corporates embarking on an M&A or divestiture, because they are encumbered by legacy systems and/or data centres without the flexibility and agility of the cloud. Alongside the technology challenge is the criticality of maintaining the security of two legal entities. The complexity of these twin challenges makes a trusted and experienced partner highly desirable, and in this video Nigel outlines what Enterprise Services can offer customers in this arena.
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