As transaction processes have recently evolved rather astronomically, the needs for quote to cash systems too have grown to be more complex and technologically advanced in recent times which simply begs the question of what attributes an ideal quote to cash system should possess in order to support the complexity that is mega transactions like Mergers and Acquisitions. Broken CPQ systems litter the technology M&A landscape. The need essentially is for CPQ systems that can handle the robust requirements of the technology space to accelerate time to synergy for M and A.
A comprehensive CPQ system can both de-risk and accelerate the integration process by:
- Enhancing sales enablement, that is, reducing time to successful cross selling of merged or independent product portfolios (faster realization of synergy)
- Eliminating risk via embedded technical and financial deal governance from shared product portfolios
- Enabling accurate and efficient document generation for due diligence on the deal mechanics and details.
- Integrating with legacy systems and lay the foundation for future integrations to avoid vendor lock-in
- Enabling exceptional financial visibility for instant break even and profitability analysis ( for past, present and future deals)
- Enabling Key resources retention by reducing need to support mundane spreadsheets and configuration analysis, focus on building and selling new solutions and technology.
- Improving deal agility, velocity and governance by increasing the speed to combined company cross-selling and leveraging technology for configurators wherein the combined sales teams can leverage without technical help.
The gravity of M&A deals can be estimated from numerous examples available today – like Express Scripts’ acquisition of Cigna, for almost 68 billion dollars that was the largest M&A deal in 2018 but it was in good company as it was the best M&A market in the last 7 years for $1B sales.
servicePath helps technology companies that are undergoing or growing by M&A consolidate the product offerings, unify the sales motion, and accelerate the sale cycle; all the while eliminating risk and enabling transparency.
Companies, have for decades, for reasons ranging from delay in attaining their respective objectives, or lack thereof, to the mere realization that two can perform better as one, at some point in their business, considered either Merging or Acquiring as a step (read: leap) toward attaining collective goals. Goals of achieving greater efficiency and market share, reduction in number of competitors, access to newer technology, so on and so forth. Businesses and people involved in this process, union if you will, in their never ending quest to improve business, often experience the innate risks and challenges that these company consolidation processes entail; the most critical of them being that of Business Integration. Incorporating so many different components, an M&A deal’s success relies significantly on utterly seamless business integration. From sales team, to cultures, to infrastructures; after the decision to acquire another company is made, a different set of metrics are key to success – needless to say, merging is a tricky business.
An overview of the concept of M&A remains incomplete without this another particular concept – Synergy.
Wikipedia defines synergy as the creation of a whole that is greater than the simple sum of its parts, aka emergence. The many benefits of Synergy include increase in productivity and revenue, decrease in cost, and access to people, to name a few. However, businesses have also now made peace with the fact that it is no longer news that a desirable, or even an acceptable level of certainty in their endeavors toward Synergy is unequivocally likely to be few and far between.
M&A in tech businesses primarily revolves around people, process and technology.
Embedding and synchronizing new technology into legacy technologies is extremely difficult; safe to say that no amount of due diligence is ever quite enough. What’s more, another challenge that keeps stakeholders up at night is talent. It’s increasingly difficult to find people with extraordinary tech skills because M&A in the technology world is not about cost take out, but it is more about quickly selling more solutions to a larger customer base and streamlining the individuals involved so that their efforts can be focused on new markets, development of new solutions and new cost models.
You don’t need many failed attempts to realize that any visible signs of success will only surface once the systems and people are aligned and the products are expanded, so much so that the new teams can cross-sell effectively.
As one would expect, a lot is at stake in M&A deals. Companies continue to seek out synergies, as some of the highlighted M&A transactions over the past year noted above. While the ground-breaking potential of Synergy is something many businesses continue to strive for, failure, miscalculation, statistically inaccurate judgment, and exaggerated or understated predictions are not an option.
