Buying companies and the challenges of disruptive technology


It’s no secret that buying companies have impressive influence over the average financial investor. From careful securities research on behalf of clients to buying assets for profit, buying companies have remarkable influence on the stock market. In fact, much of what they do is shrouded in great mystery, leading many people to wonder what is it so purchasing firmsAnd what resources do they use to operate? Unfortunately, for many, this enigmatic conduit only serves to deepen the intrigue even further.

Buying companies and the challenges of disruptive technology

The Buy Side firm has an elusive agreement origination processpossibly the cornerstone of your ability to close trusted leads. However, very little is known about buying-side M&A (mergers and acquisitions), and buying-side companies are content to keep it that way.

However, technology is dramatically changing the way these companies cultivate their best kept secrets. Additionally, thanks to these technological advancements, buying companies are finding unique ways to make their customers profitable, further deepening the intrigue surrounding their operation.

How is technology affecting buying companies?

Surprisingly, much of the buying side of the investment industry has been recalcitrant to adopt newer technology, making it difficult for any pending projects on the buyer side to succeed. For example, a recent study of State Street’s annual “Growth Readiness Study” revealed that only two-thirds of shopper respondents were ready to accept alternative data (such as social media posts, transition data, and foot traffic). Also, some expert reports suggest that most buying companies fall behind at any point five to seven years in its technology.

Private equity analysts collect and study data

However, it is clear that these technologies are undoubtedly revolutionizing the way these private equity analysts collect and study their data, making both their collection and interpretation methods easier and faster. As a result, the question is no longer a question of private equity vs. hedge fund, but rather buying companies versus technology. This includes the use of AI, blockchain, robotics, and rapid data analysis. And for many of them, there is no going back once they start using these vital resources.

Benefits of technology adoption by purchasing companies

The benefits of implementing this new technology are numerous. For example, in the past, financial analysts on the buying side needed to manually sift through data to collect and make sense of it – a long and laborious process. However, with the introduction of new data collection techniques, it is now easier than ever for them to collect and interpret the data they need. For example, an elegant combination of natural language searches and machine learning (ML) can help automate this process.

Buying-side companies can use Boolean results to speed up research

Rather than spending time manually connecting queries to a system, these buying companies can use Boolean results to speed up their investigation. Studies have shown that up to 40% of a buyer analyst’s time is wasted on this task, but adopting these technologies could help facilitate automation and efficiency. The same can be said for the shift to cloud computing. By migrating their existing systems, these companies can find greater flexibility, more powerful processing, and easier scalability.

Artificial intelligence (AI) and machine learning they are also comprehensive. The increasing volume of operations and current data highlight the need for these two technologies. While it may have been feasible to avoid using these tools two decades ago, they are all mandatory today. For example, AI algorithms can help take the guesswork out of educated guesses. By predicting trading patterns and deducing the direction a security may go, the risk of loss can be dramatically reduced.

Blockchain causes a change in buying trade

Another technology that is causing a dramatic shift on the buying side of commerce is the adoption of blockchain. A surprising report from Goldman Sachs, one of the world’s top 100 buyer companies, revealed that the use of blockchain technology could reduce IT and labor costs, saving banks $ 6 billion per year when used. for settlement and clearing. Buying firm analysts could also reap similar benefits, increase efficiency, reduce overhead and regulatory costs, and minimize costly business errors.

Challenges for technology adoption

Despite the obvious benefits of adopting this technology, many buying companies still cling to outdated data acquisition methods, underscoring one of the many differences between buying and selling companies. Understandably, many challenges arise when adopting it successfully. For example, replacing your existing infrastructure would incur significant expense. Additionally, upgrading existing databases and systems to integrate novel digital solutions would also require time and financial resources.

Upgrade systems require trained technicians

In addition, upgrade systems require trained technicians and, once completed, a company’s existing staff would need training in their use. These updates would take time and capital both to implement and to ensure that the acquiring company’s employees are comfortable with them. Buying-side businesses need to recognize this, and putting together a roadmap can help guide them through the process. Otherwise, these changes can lead to a loss of profits, which all companies strive to avoid.

Risks of not adopting technology

However, the lack of adoption of this technology could lead to an even greater loss of capital, which could cause the eventual dissolution of a previously successful buyer company. Take, for example, something as basic as customer perception. While this may not seem significant, especially if a buying company has a strong track record of profitability, it does not change the fact that customers have certain expectations. Therefore, if they find that the buying company is not up to date in technology, they may decide to take their business elsewhere.

Companies that don’t embrace technology are doomed

Ultimately, buyer companies that do not embrace the technology are doomed to be less successful than their competitors. Refusing to take the time to evaluate and find ways to upgrade inefficient internal legacy platforms can put a buyer company at a serious disadvantage. Upgrading these systems not only reflects a move toward a more productive and lucrative future, it also shows that an analyst is still firmly on the alert compared to their competition.

Final thoughts

By taking the time to carefully weigh the pros and cons of embracing these technological advancements, both the buying company and the selling company can not only be one step ahead of their competition, but also the market itself. Your methodical field work can ensure that your client remains profitable and solvent. Additionally, by being proactive in researching and applying these innovative technology methods, you can help see that they still exist when today’s technology emerges as the metric of tomorrow.

Image credit: julia larson; pexels; Thank you!

Brad Anderson

Brad Anderson

ReadWrite Editor-in-Chief

Brad is the editor who oversees the contributed content on ReadWrite.com. He previously worked as an editor at PayPal and Crunchbase. You can reach him at brad at readwrite.com.


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