Enterprises commonly pursue M&A as a strategy for driving growth and accelerating shareholder value as it enables enterprises to expedite entry into new markets and geographics, expand product and service portfolios with greater speed, and acquire talent and new capabilities virtually overnight. While the velocity and volume of M&A deals ebb and flow in concert with macroeconomic trends, M&A consistently remains a favored approach among growth-oriented enterprises spanning a range of industries.
But M&A is not easy.
One of the greatest of these challenges is the integration of technology systems. Managing or consolidating multiple and disparate technology systems across finance and business operations remains one of the key post-M&A obstacles. The ability to integrate IT systems can be the difference between a successful transaction and a disaster.
In the effort to integrate companies and systems seamlessly and smoothly, the billing system becomes a critical component that rises to the forefront.
In today’s business environment, where products and services are delivered via subscription and usage-based billing models with greater frequency, the billing system has become a critical key to the realization of revenue and ultimately the customer experience. M&A often brings together companies with disparate business units operating different monetization models with varying levels of pricing model complexity. In most M&A scenarios, the existing billing systems and financial applications are inflexible and lack agility, ultimately creating substantial obstacles for those leading the post-integration effort.
A pure public cloud billing and monetization platform is ideal for companies engaged in M&A activity, particularly those with multiple business units or offering many varieties of B2C, B2B, and B2B2X products and services. Cloud billing platforms can be deployed across a range of monetization models and geographies to handle any level of pricing complexity, enabling the organization to realize the benefits of the M&A business case with greater speed.
The flexible nature of a cloud billing solution enables organizations to consolidate billing functions more easily in the post-merger environment, as the platform can more easily connect to and operate alongside any number of IT functions within an organization’s Lead-to-Revenue technology stack and as part of a best-of-breed strategy. Additionally, the platform can be configured at either the business unit level, providing autonomy over business models and processes, or established at the corporate level to ensure cross-business consistency.
According to the Harvard Business Review, 70–90% of mergers and acquisitions fail due to the multiple challenges that arise once the deal is consummated. CFOs say the greatest pain point when engaging in a merger or an acquisition is the meshing of business systems and technology. The presence of a cloud billing platform can help to mitigate these integration challenges, facilitate service and product convergence, and process rationalization, ultimately leading to post-integration success.