How to prevail when technology fails - Flipbook - Page 27
Technology M&A, joint ventures and outsourcing: An opportunity to be considered carefully | 27
Technology acquisitions
and partnerships bring
unforeseen risks
Technology acquired or developed through a JV,
for instance, may fail or not perform as expected.
A JV could break down because of a deterioration
in relations or if ordered by government authorities
(which is increasingly a risk where the JV partner
is based in China). Or a JV or outsourcing
arrangement could create cyber vulnerabilities
(see “External partnerships and M&A come with
added risk”).
The survey data shows that businesses plan
to increase their deals with particular types
of businesses: 65% say that companies will
increasingly enter into JVs with startups in order
to get access to innovative technology, and 60%
that companies will target emerging markets
more frequently.
Unfortunately, some risks are particularly acute
when businesses partner with or acquire these types
of businesses. Startups may lack the resources to
implement adequate cybersecurity protections. And
businesses that are located in emerging markets
may be subject to data privacy regulations that are
not as strict as those in Europe or the U.S.
Fig 14 Risks associated with acquiring and partnering with tech companies are increasing
Strongly agree
3%
Agree
Disagree
Strongly disagree
10%
18%
31%
20%
25%
48%
45%
Companies in our sector will increasingly enter into
Companies in our sector will increasingly enter
joint ventures with companies in markets in which
into joint ventures with startups in order to get
they don’t currently operate in order to get access
access to the most innovative technology
to the most innovative technology
7%
6%
19%
33%
20%
40%
41%
34%
Companies in our sector will increasingly enter into
It has become more challenging to assess all
joint ventures with companies in emerging markets in
of the risks and liabilities associated with acquiring
order to get access to the most innovative technology
and partnering with technology companies
Q. To what extent do you agree with the following statements relating to acquisitions of and joint ventures with technology companies?