Ernst & Young’s latest Global Capital Confidence Barometer (CCB) reveals the current state of corporate confidence and economic outlook within the Technology sector.
The survey of 2,900 senior executives from global enterprises in 46 countries revealed potential M&A trends and activities as the COVID-19 affected world recovers slowly.
The EY report says: “The sudden and unexpected nature of COVID-19 has compelled executives to re-evaluate operating models.”
“While building agility and resilience have been dominant themes for much of the past decade, the unique nature of the current situation has left many companies unprepared.”
The EY survey reveals an interesting observation though: More than a third (36%) are accelerating their investments in automation.
“Looking at the post-crisis future, executives will prioritize both changes in capital allocation and measuring returns and capital efficiency more effectively.”
Thirty-eight per cent of executives rated “business resilience of targets” as being the most important factor in future M&A strategies.
“After “now” and “next,” companies will eventually focus on “beyond” — activating transformation.”
Despite the havoc unleashed by the COVID-19 pandemic, the tech sector recovery has been admirable.
The ASX All Technology Index recovered from its March low of 1,140 to the high of pre-COVID levels hovering around 2000. The recover was stronger than the ASX200 signalling the tech sector appears more resilient than the rest of the industry.
The market recognition strengthens the belief Australian technology companies are positioning for growth rather than survival.
Microsoft announced two acquisitions bolstering Azure strategy while entering the lucrative RPA market with Softmotive acquisition.
Although these acquisitions could have been put in motion before the COVID-19 crisis, the inevitable digitisation of businesses could only accelerate M&A activity in the tech sector.
