March 14, 2013

Successful deals consider customer and employee needs

Recent mergers and acquisitions have mainly revolved around the growing needs of customers and their thirst for more technology. However, when a business owner is considering various opportunities, it is important to not forget his or her employees in the process.

Richard Branson, founder and chairman of the Virgin Group, wrote a contribution piece in technology and business blog Entrepreneur about his experience in mergers and acquisitions. According to Branson, staff and customers must be treated with respect. Transformation periods are difficult times to keep an already established culture stable. However, the early stages are especially critical, and can forever change employee work practices and outlook.

"If you are trying to judge whether or not to merge with or acquire another company, it's important not to get carried away by hopes about projected earnings, but instead to consider how that company's brand and purpose fits with yours," Branson wrote.

Software merger set to meet changing customer needs

Two companies that have made adjustments to meet consumer needs are SAP and Camilion. SAP is on track to expand its software products with the acquisition of Toronto-based Camilion. According to IDG News Service, the two businesses had already been partnered for some time, with SAP having embedded Camilion technology into its insurance offerings. 

SAP officials told the news source that many insurance companies are burdened with legacy systems that can't handle today's demands. However, the move will create a suite that insurers can use to modernize their operations. 

Other companies that are considering software mergers and acquisitions should take note that both businesses had an understanding of what the other organization specialized in. While a previous partnership is not always necessary for a business deal, it is important for entrepreneurs to remain diligent in finding opportunities that will keep a company's bottom line intact.