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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