2019 Retail M&A Trends : Evaluating The Post-Merger Enterprise Architecture Integration

The consumer retail industry is positioned for growing when evaluating it from a macro.

The sector reportedly contributed 13 percent and 10 percent to global deal volume and value, respectively, in 2017 and remained resilient over 2016 according to a recent KPMG report.

There are a number of challenges facing the retail sector. In recent years there has been a significant increase in new competitors, discount chains, and online-only retailers.

Retailers are also experiencing an increasing fragmentation of spend — for example, consumers buying in low volume more frequently.

There could be a variety of actions effecting this change such as real-estate development trends, work requirements, healthier eating that results in short storage capacity, and much more.

Related: Data-Driven Research during Mergers and Acquisitions [M&A]

With an increase in competition, the increase of pressure to grow market share and revenue typically follows ultimately fueling a new wave of mergers and acquisitions across the retail industry. Ensuring the success of these mergers and acquisitions requires strategic planning aligned with data management technologies in order to rationalize, consolidate, migrate, and integrate between operational and analytical enterprise systems.

In most cases a team of experts [consisting of digital strategist, enterprise architects, project managers, and risk managers] are hired to manage the process supporting core business functions across front, mid, and back office systems. This helps to integrate a somewhat seamless transition regarding financial supported IT, procurement IT, and sales/marketing IT.

The figure above outlines a potential enterprise architecture of one retail organization. If this organization were to acquire another organization with the intentions of merging or aqui-hiring them into their existing model, systems would have to be evaluated and redesigned to adapt the new organization’s data, process, and solutions.

It’s very unlikely that each enterprise will have similar IT architectures and people processes. In order to reach an ideal point of consolidation, teams will need to rationalize their application and data landscape to determine which systems remain and which should be decommissioned to eliminate redundancy.

Are you looking to improve efficiencies within your team/business? Let’s schedule time to chat.

To read more of my thoughts around enterprise solutions, market trends, and data — follow me on Twitter.

If you enjoyed this story, please recommend and share to help others find it!

Related Essays: