Technology integration is a critical component of any merger or acquisition and can be one of the most daunting efforts to undertake. As mergers and acquisitions have become larger and more complex, digital technology, or the technology stack of an organization, can affect both the appeal of an acquisition and the success of the post-deal period.
A technology stack is the sum of technologies a company uses to build and run the business. It includes servers, applications, programming languages, front-end and back-end tools, databases, and frameworks. It also incorporates how every element of technology is connected and integrated to optimize business processes, vendor relations, and customer service. If the technology stack has issues, it can make or break deal value.
When a selling firm has a client-focused, modernized technology stack that supports a smooth and seamless transition, it’s a highly attractive factor to buyers. We are often asked how an organization can leverage their technology stack and showcase its ability to meet the needs of a buyer and the new organization. The keys are Maintenance, Optimization, and Security.
Back-end systems are the underlying infrastructure that powers the front-end user experience. Proper servicing of technology and staying current are critical to business operations. Continual maintenance can identify problems, such as data loss, before they arise or get severe and have an impact on continuity and productivity. The main benefit is to circumvent emergencies and stop the system from failing by taking preventative measures.
Optimizing the technology stack and specifically identifying areas of improvement can improve the efficiency of the business. This can include identifying more appropriate solutions, correcting inefficiencies in operational processes, workflows and its people, or leveraging the technology stack to improve collaboration and cross-discipline productivity. Simply put, the technology stack design and optimization should align to the business needs.
The rise of cyberattacks and cyber threats since 2020 is staggering. Companies of all sizes and across every industry are potential targets, everyone is susceptible. A look at the security and compliance of an organization’s technology during due diligence has become a priority. Designing a comprehensive cyber defense strategy begins with analyzing your current security posture. This is completed by leveraging a known cybersecurity framework and rating your program maturity. Those whose rating is higher will certainly be more appealing to the buyer.
Technology integration can be one of the most difficult parts of a merger and although every organization and individual will have their own preferences to processes and systems, the maintenance, optimization, and security of a technology stack can play a critical role in valuing the deal. It enables streamlined interoperability between technology infrastructure and allows buyers and investors to look beyond the merger and focus on top line growth.
We Can Help
Elliott Davis can help businesses evaluate, update and optimize their technology to create solutions that are integrated, scalable and secure. This allows organizations to be more agile and take advantage of top and bottom-line growth opportunities. If you need assistance, reach out to Jimmy Buddenberg, our Digital Practice Leader.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.