Fig 4.: Comparative example of P&Ls with and without breakdowns.
The reason why the multinationals are not accepting more than a 10%
rate of breakdown index in their portfolio is because the lack of
profitability. Has to be considered also that when the integration phase
is completed, the labor cost of a multinational company is higher than
in a local company. In an M&A process, the potential incoming orders of
repairs, not included in above calculations, is either very important
for decision making.
During the DD there is a very high percentage of E&E that are not
inspected and therefore their operating status is not really known,
except for the information on breakdowns that the acquired company may
provide. These E&E can represent an uncontrolled cost during the
negotiation process and can damage the bottom line after integration and
even destroy company value in the event of an accident.
CONCLUSIONS
The real operational variables could be obtained in real time by means
of a connection interface (hardware) with the electronic board of the
E&E, which incorporates a SIM card. This SIM card provides an internet
connection to the interface, so that through the IoT of the E&E itself,
and during a certain period of time, all the operational variables of
the E&E would be recorded, which would allow an analysis and a data
projection to be carried out and take the correct decisions. It would
allow to have a history that anticipates the present and future behavior
of each E&E that is in the maintenance portfolio. These operational
variables, together with the data of each maintenance contract extracted
from the database, and together with the financial variables that would
also be collected through the connection to the ERPs, would form a pool
of data that would be subsequently processed by tools of BIG DATA.
The digital strategy applied by the big multinationals companies
currently consists of a digital platform that is able to connect the
E&E with the technicians, passengers and customers. The information
obtained from the IoT of the E&E is used to predict the maintenance
service in order to reduce the corrective one. Each multinational
company is using their own devices compatible with their own E&E brand,
but these types of devices are already existing in the market and are
universal for different brands.
Can be used to record the operational variables during a defined time of
period to learn the E&E technical status? Yes, can be used.
With this information, the operational ambiguity of M&A processes
between companies of different sizes with different digital strategies
in the E&E maintenance sector would be resolved. Normally, a visual and
technical check is carried out on a small sample, about 10%, of the
portfolio of the acquired Company in the Due Diligence phase due to the
lack of time and high cost of resources. However, the use of this
technology would allow not using human resources, not making large
investments, and making a 100% sample, eliminating the risk of
asymmetric information.
In other words, through the IoT of E&E we can have accurate and
complete technical information. Then that information can be analyzed
and processed thanks to the BIG DATA tools. In this way we will have the
necessary information to gain economic efficiency in M&A operations.
IoT devices will be the norm in the future and will assist humans in
daily routines. Authors Souza, Carlson, Ramos, Loureiro and Oliveira, in
their article “Internet of Things device authentication via
electromagnetic fingerprints” describe several scenarios where IoT can
communicate and interoperate. To any other interlocutor. One of those is
the scenario of vehicle-to-everything. We can consider an E&E a vehicle
(Souza, Carlson, Ramos, Loureiro & Oliveira, 2020).
What cannot be measured, cannot be managed.
Information and communication technologies (ICT) can minimize/avoid
information asymmetry and increase the success of M&A operations, not
only in the Elevator sector but also in other service operations
sectors.
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