REUTERS/Lucas Jackson
Chief executive officer of Moelis & Co., Ken Moelis smiles after ringing the bell to mark the company's IPO on the floor of the New York Stock Exchange
That's the question every company CEO is asking themselves right now, according to Ken Moelis, founder of Wall Street advisory house Moelis & Co.
The challenge Moelis is asking about is the rise of technology.
Business Insider sat down with Moelis a few weeks ago, and discussed the way technology is changing every industry. He gave the example of the retail industry, which is having to produce higher quality goods at a lower price while moving inventory more quickly.
The same thing is happening in just about every industry, he said.
"In each business, there is a process, or a delivery system or information system, that is changing rapidly under them," he said.
We then asked Moelis if that was driving dealmaking. Here's what he had to say:
"It is one of the things. You talk about synergies. Everybody is talking about synergies. You've got to take out every cost you possibly can. You have to position yourself as your services change.
"You have to think about in five years from now what is going to happen technologically to you. And then you do have to think about M&A or your balance sheet, and you have to think about everything in the context of, "Am I prepared to meet that challenge?"
There are opportunities as well as challenges, of course. If you are able to produce higher quality goods at a lower price, well, you'll win out in the rapidly-changing, technology-driven economy. The rise of big data also has the potential to create new business lines, as companies take data from one business, and use it to deliver insight in another. Here's Moelis:
"Digitization has created opportunities for everybody to accumulate information in a way they were never able to, and analyze it with a speed that just wasn't there. Everybody is looking at their base business and saying, 'What else is it? Sure, we do this, but while we're doing that, what else do we know about our customer, and what does that enable us to do?' That comes from the access to information and the ability to analyze it with a speed they never had. I think everybody is thinking that way."