Technology and Deals
Information and communication technologies such as artificial intelligence and analytics, online data rooms and databases can enhance the deal-closing landscape.
Technology and the associated increased access to precedent information for informed decision making can open up the market, reduce the power gap between parties, reduce costs by cutting out expensive middlemen and increase the speed, efficiency and effectiveness of the deal-closing process.
But, Does technology create new risks for the deal-closing process?
Electronic data transmission and the use of data rooms increases the prospect of data leakage, whether through hacking, information hijacking or news gathering opportunism. This in turn can increase corporate costs in relation to improved data management infrastructure and the personnel required to manage this.
Furthermore, technology has not (yet) replaced human interaction. As we have seen, deal-closing cannot ignore human behaviour. Person to person interaction is required to really draw out wants and needs and therefore primary and secondary issues at play in a deal scenario. Face to face discussion can also help build trust between the parties in a deal scenario, which in turn can help to avoid conflict, disagreement and a failed deal process.
(Simon Haigh is author of Deal-making for Corporate Growth the 7 P Approach to Successful Business Deal Execution - foreword - Marshall Goldsmith - 2016; and Contract Law in an E-Commerce Age - Round Hall Sweet & Maxwell - 2001)