Meet Dr. Alexander Herzfeldt, esteemed faculty member at the Institute for Mergers, Acquisitions, and Alliances (IMAA) and Associate Partner at Siemens Advanta Consulting. Alex’s work is at the intersection of strategy consulting and custom software development with focus on the Life Sciences industry. He leads the institute’s trainings on IT Due Diligence, Digital Strategy and Post-Merger Integration (PMI).
Alex started his career in consulting and private equity nearly ten years ago and is currently Associate Partner at Siemens Advanta Consulting, where he co-leads the global M&A Practice and where is responsible for the Life Sciences business in North America. In his daily work, Alex is consulting his clients on strategy topics incl. M&A, Restructuring, Portfolio Optimization, Digital Strategy as well as Custom Software Development. What sets Alex apart from other consultants is that Alex doesn’t leave his projects after having given strategy advise, but that Alex and team make sure that the strategy advise is acted on by helping their clients with custom software development and IT system integration. Alex earned a Ph.D. in Management Information Systems researching on cloud provider business models at the Technical University of Munich and the National University of Singapore as well as a master’s degree centered on Financial Management.
Alex’s philosophy intertwines People, Technology, and Strategy and he is passionate about education and sharing his experiences with his students. Therefore, beyond his professional endeavors, Alex dedicates time to educating the next generation at IMAA. His courses on IT Due Diligence and PMI, focusing on Digital Strategy and IT M&A topics, are widely acclaimed. Additionally, he remains actively engaged in research, particularly in M&A and the business aspect of cloud services.
Dr. Alexander Herzfeldt: The Role of People and Technology in M&A
Alex’s philosophy on mergers and acquisitions (M&A) hinges on the idea that M&A is fundamentally about people and culture. “It is all about people and culture – people and culture make or break your deal”, he says. According to Alex this is the number one topic and “only if you have this topic under control” it is worthwhile continuing with your M&A deal.
Diving deeper into the modern M&A, Alex emphasizes the increasing importance of technology and data integration. “The deals that create the most value are deals where the acquirer’s and target’s management teams easily speak digital and IT”, he says. With technology and data competencies, businesses can unlock new insights, propelling them towards innovative digital business and service models. Such a perspective shifts the narrative of M&A from simply a means to grow big to benefit from cost synergies to a strategic tool that, when wielded correctly, can significantly amplify a company’s growth potential as well as valuation.
“The deals that create the most value are deals where the acquirer’s and target’s management teams easily speak digital and IT.”
Dr. Alexander Herzfeldt: Technology as the key to advancing M&A
M&A has changed a lot over the years, and technology plays a big part in that. “It is about making digital companies better or bringing digital in traditional companies,” says Alex. Also given the current high valuations of companies, very few M&As hinge on the idea of cost synergies these days. It is about revenue synergies in terms of new digital business models, new service models, or innovative and complementary delivery and G2M approaches, to name a few examples. That being said, “I have seen the most successful M&A deals in the software industry,” he adds.
Regarding the M&A process itself, technology, especially artificial intelligence, is changing how M&A transactions work. Alex and his co-authors recently published an article on “M&A Consulting 4.0” where they discuss how a holistic platform ecosystem could revolutionize M&A processes and establish novel functional models. The primary objective should be to build a comprehensive solution that provides real-time access to all transaction-relevant data for all stakeholders. Implementing such a system would enhance information transparency, enabling compliance with risk and compliance requirements. Furthermore, the growing importance of artificial intelligence technologies, alongside big data, will aid in automating tasks.
Dr. Alexander Herzfeldt: Elevating M&A Professionals with Digital Expertise
Alex is passionate about bringing together the M&A world and the digital world, a motivation that drives his academic research and his lectures at IMAA. He’s observed a common apprehension among individuals towards the IT and digital aspects of M&A, often stemming from a belief that these topics might be too complex. However, Alex does not believe that this has to be so. “It takes a couple of hours to understand the most important concepts about IT Due Diligence and IT Integration. Once you are aware of these concepts, you have a structure and a great feeling for what is important regarding IT and Digital in M&A,” he says. In his trainings, Alex focuses on exactly this. He gives his students an easy and fun way to access the digital and IT aspects of M&A, kindling their enthusiasm to delve deeper and apply these concepts innovatively.
This focus on IT and digital isn’t just for teaching. In most deals, 50% of all synergies are IT or IT enabled synergies. Also, often more than 50% of the integration costs are IT integration costs. So, understanding IT and digital aspects in M&A is important. He adds, “My hope is that bringing in the IT and Digital perspective in M&A becomes more and more common. I want to contribute to this and that is why I am so passionate about teaching IT and digital focused trainings at IMAA.”
“It takes a couple of hours to understand the most important concepts about IT Due Diligence and IT Integration. Once you are aware of these concepts, you have a structure and a great feeling for what is important regarding IT and Digital in M&A.”
In Conclusion
Alex’s work in M&A highlights the crucial role of blending people, culture, and technology for M&A success. For those looking to pursue a career in M&A, Alex’s advice is straightforward: lean into the where M&A and technology meet. With so many technology innovations on the horizon, there’s potential not just to navigate, but to build the future of M&A.
Join Alex’s journey in making M&A more digital by connecting with him on LinkedIn and reading his publications below
M&A Publications:
- Adler, T.; Herzfeldt, A.; Floerecke, S.; Klawon, M. (2023): M&A-Beratung 4.0: Digitalisierung des Unternehmensverkaufsprozesses im deutschen Mittelstand aus der M&A-Berater-Perspektive. In: Wirtschaftsinformatik & Management. doi:10.1365/s35764-023-00487-x.
- Boehm, M.: Floerecke, S.; Herzfeldt, A.; Knoblich, D. (2023): Success Factors in Efficient Mergers & Acquisitions Activities: A Longitudinal Case Study from a Serial Acquirer and Divestor. In: AIS Transactions on Enterprise Systems, Vol 6, No 2, 1-23. doi:10.30844/aistes.v6i2.28.
- Fischer, M.; Herzfeldt, A.; Floerecke, S.; Ertl, C.; Beyer, H.; Klawon, M. (2023): Digitalisierung bei Corporate Mergers & Acquisitions. In: Controlling, Vol 35, No 3, 39-47. doi:10.15358/0935-0381-2023-3-39.
Cloud Services Publications:
- Floerecke, S.; Ertl, C.; Herzfeldt, A. (2023): Major Drivers for the Rising Dominance of the Hyperscalers in the Infrastructure as a Service Market Segment. In: Int. Journal of Cloud Computing (IJCC), Vol 12, No 1, 23-39. doi:10.1504/IJCC.2023.10054986.
- Herzfeldt, A.; Weissbach, R.; Rauer, H.; Ertl, C. (2020): Cloud Computing as the next Utility – Market strategies for cloud service providers. In: International Journal of Cloud Applications and Computing (IJCAC), Vol 10, No 4, 27-47. doi:10.4018/IJCAC.2020100103.
- Herzfeldt, A.; Wolfenstetter, T.; Ertl, C.; Krcmar, H. (2018): The role of individualization and project learning for cloud service profitability. In: Journal of Electronic Commerce in Organizations, Vol 16, No 2, 64-82. doi:10.4018/JECO.2018040104.
