Data is a blessing and a curse. It can be a catalyst for growth as well as an inhibitor to decision-making. Imagine this – you run a company in the retail sector that has traditionally performed well in a conventional market. Within your industry, you are increasingly seeing that your competitors innovate in new and unconventional ways as they follow the changing habits of the consumer. Players who once occupied adjacent territory are now setting up shop in your backyard. How do you act and what insights should inform your strategic next steps? Do you have the information you need to unlock these insights? What other data do you need?
The data landscape is simply massive. Data generation is happening at an astonishing speed and it shows no signs of slowing down. An estimated 2.5 quintillion bytes of data are being created each day. Putting this into perspective, if you take every single book that exists on the planet, this would only account for 6% of the total amount of data ever generated.
The pace of disruption means that companies need to transform faster than ever to lead in the market. With traditional internal investment strategies not always offering enough bang for their buck, more companies are having the buy versus build debate. Do they continue to invest for organic growth which can be slower, or do they acquire the innovation they need to accelerate growth? The majority of companies (74% in an EY survey) are now opting for inorganic growth – through M&A, joint ventures (JVs), partnerships or alliances.
Data generation is relentless. Companies can be overwhelmed by this data avalanche. Yet, in the recent survey, 41% of CFOs told us that insufficient data is a primary barrier to the optimal allocation of capital — a clear sign that there is still much work to do for companies to have the right data to support their strategic decisions.
In the meantime, switched-on companies are gaining a competitive advantage by learning how they can gather, analyze and interpret data to inform their growth strategy. But they are the exception, not the norm. So, how can more companies power up their growth strategy by plugging in technology?
Connecting technology solutions with clients’ expectations
As the volume and pace of disruption increases, so does the need for faster business transformation strategy. M&A is a common option, as we have seen, but is itself being transformed as companies expect deal professionals to use a range of cutting edge technologies to help drive efficiency and deliver value throughout the entire M&A lifecycle:
- From strategy – enabling inorganic growth by effectively identifying upfront the targets they would like to partner with, invest in or acquire.
- To diligence – getting sharper insights and by enabling them to be in a better position to evaluate the company and negotiate a deal.
- Through to execution – delivering value against the M&A strategy.
EY Transaction Advisory Services teams have developed a suite of targeted tools, specifically tailored towards each stage of the M&A lifecycle, helping our clients penetrate through the avalanche of data. EY Connected Capital Technologies ingest data, process it, and apply analytics and artificial intelligence to extract out actionable data points to help clients to really deliver on their strategic priorities. Let’s look at how this might apply to the strategy front end of the M&A lifecycle.