Growth by acquisition, beware of Franken’Suites
In its race for growth initiated by a series of fund-raising initiatives, the Business IS Vendor will necessarily ask itself the question of company acquisitions. It all began with a soothing press release announcing the acquisition of the software vendor X by the software vendor Y : geographical synergy, complementary business lines, increased added value. Behind the conventional words, the three sensitive points to observe are the strategic reasons, the future of the key men and the technological impact.
External growth? In support of what strategy?
Only an unvarnished knowledge of the motivations behind an acquisition can help anticipate its consequences. The strategic and tactical reasons for the acquisition will most often be hidden. A certain “On Premise” management software editor buys a famous Cloud IS Procurement editor, increasing its Cloud revenue and automatically its stock market valuation; another assembles a lego of three technologies with a vision of resale in two years without having built anything other than its fortune; and in these times of easy money, some will buy to buy with growth as their only indicator. The rarest and most positive will be the editor who chooses complementary business functionalities to integrate or redevelop in order to bring a benefit to all his customers.
Maintaining a business vision, the imperative of the Purchasing IS vendor
In the absence of the key people who carry the vision and values, the target company quickly becomes an empty shell. The race for growth of a business editor, a meeting between a business visionary and a technical expert, changes the company’s culture by turning it towards exclusively financial objectives. The major risk is that the departure of visionaries, who carry the soul of the company, will often cut the company off from its customers, who are transformed into marketing targets.
Ignore the VP Sales and other Chief Marketing Officers and listen to the vision of the new offer on the business and technical levels with its time scale and the associated investment amounts by the Chief Product Officer and/or the Chief Technical Officer, bearers of the business vision and its execution.
Beware of FrankenSuites, unmanageable techno legos
In the digital age, technological debt is the number one obstacle to the agility of a company in general and a software vendor in particular. While your IT department struggles every day to make your information system agile, wouldn’t it be foolish to bring in a software vendor with a platform made of legos? A “Franken-Suite”. The integration of the new offer does not pose any particular concern if it is a peripheral solution such as supplier risk information, a virtual assistant or electronic signature, it is not the same when it is a platform with portal, processes and repositories.
Integrate or redevelop, a strategic choice with multiple impacts
If the business IS vendor buys a process management software, the cleanest and rarest option would be to redevelop the acquired solution on its platform while keeping the people who will ensure homogeneity and functional depth for the benefit of all.
Unfortunately, most of the time, the editor will integrate several platforms into a single one under a new marketing name, opening up colossal projects: several Supplier Management systems, accumulation of technical debts, multiplicity of supplier portals and administration consoles, prohibitive cost of translations, improbable role matrix.
Single platform or multiple platforms, all that matters is the vision, a plan and the right resources to collaborate.
Lectori salutem, Patrick Chabannes“The mind likes better what confirms its knowledge than what contradicts it.” Gaston Bachelard