The recent turmoil in the M&A market led to many cases of holdings that acquire various companies in order to increase their market value and then resell them. At some point, along the way, an opportunity arises driven by data that not everyone capitalizes; it is an opportunity to look for synergies when consolidating some of the different companies.
Here is an example from real life. URUS is a holding made up of eight companies that specialize in the dairy industry. We are going to focus in what happened with three of them: VAS which provides technological solutions for dairy farms; Genex that sells advanced genetic and reproductive solutions; and Alta Genetics which is a consultant on genetics and herd management. URUS’ objective was supported by Making Sense. The idea was to streamline the genetic management of herds and modernize and accelerate the decision-making processes used by the managers of livestock and dairy companies throughout the United States.
Look at the big picture
Achieving this level of synergy is not an easy, obvious task. The pieces must fit together, the business models must be compatible at some point, and the needs of the organizations must be realigned. In turn, innovation and new technologies are the means to turn any new idea into a reality or, better yet, to detect a potential that is very often missed when first looking at the picture. In that sense, nothing is better than having the best company: an experienced technology partner can make the difference to find hidden synergies. Not having one may result in a lost opportunity.
What makes the presence of a technology partner so important? To begin with, the huge number of challenges that must be faced to achieve results. The first one is to have an in-depth understanding of both businesses, their requirements, challenges, the market conditions and the potential opportunities to launch an innovative –even disruptive– proposal. Very often, business owners are busy with the day-to-day tasks and are not available to evaluate the big picture.
A list of challenges
On the one hand, while some markets are very busy and there are hundreds of success stories to serve as benchmarks, other cases, such as the one mentioned as an example (animal genetics), are extremely complex and require a higher level of involvement and training by the technology partner’s team. That is the only way for the partner to deliver a truly value-added solution.
After that, it is time to deal with the data: cleaning them up, guaranteeing the highest quality, checking how they integrate and creating processes to avoid manual data passing to the extent possible. Data integration can become more complex as data volumes increase (nowadays it is not uncommon to find companies that are supported by mountains of unexploited data) or when the sources increase (that is, the companies that are part of the holding and all the clients-users of the eventual digital platforms that may exist).
Reimagining the legacy
Along the same lines, the need may arise to implement analytical tools that are easy to use, that make the most of the available data and that eliminate the principle that is often associated with legacy systems: feasible but difficult (or, even worse, impossible). We all know that legacy tools themselves are complex. They are usually very limited when adopting new technologies and a considerable hurdle when scaling the business. Or, as this case shows, when having to find the synergies necessary to launch a new proposal. That is why the project must always be accompanied by a process of modernization that will release the potential that might be generated by the solution.
There is also the need to generate a UX that will attract many types of users (let’s remember that each company may target different clients) and that will allow each one of them to get the data that are consistent with their profile, whenever they need them. When searching for synergies, probably there will be many stakeholders of different backgrounds. The solution must aim to meet the needs of everyone involved. This was the key to the success of our project with URUS, whose system is used by dairy industry experts and genetics consultants… two very different profiles.
Beyond these general considerations, each project comes with its own challenges. If companies are correctly guided and accompanied, then we can add to the old popular saying: in this case, it is much more than strength that lies in unity.