Mergers and Acquisitions (M&A) are an integral part of business. M&A deals are announced almost every day in business newspapers. The key objectives behind M&A are varied and may include growth of market share, revenue, venturing onto new geography, product etc. However, in almost every case involving modern organizations, there is a key role for technology in general and data in particular to play post M&A.
In order to unlock the value of data existing in the different entities that are a part of the M&A, these data silos need to be brought together. This involves rationalizing, consolidating, migrating and integrating data resident in different systems across the various entities. It is obvious that if there is a technology overlap between the entities entering into M&A, there has to be a certain degree of rationalizing in the application and data landscape. A considered decision is taken on which systems should be decommissioned, retained, rebuilt etc. to unlock value and eliminate redundancy. Unfortunately, there are a number of dimensions to be considered in such decision making including but not limited to technology, processes, people, regulations etc. A lack of due diligence in such decision making can and do often result in data and systems related quality, consistency, and availability issues that can adversely impact the overall M&A goals and objectives.
Challenges in unlocking value in data
Some key data consideration when two or more entities enter into an M&A include similarity and difference of data in the organizations, compatibility of data, potential value to be unlocked from data and complexity of integration among others.
Though, when two complementary organizations come together due to an M&A, there is usually value in the data sitting within the individual organizations, unlocking this value is a different story. There are several challenges to integrating data post M&A to unlock value. Some of the key challenges include difference on the following data parameters in the two organizations:
- data standards
- quality of data
- format of data
- data operations, procedures
The road ahead:
Organizations embarking on a post M&A journey would do well to focus on the following to unlock value resident in data in the different entities. These, like other techno-functional initiatives, needs direction and discipline and therefore top management focus.
Data as a key consideration in the M&A change management plan
Change management is the first thing that comes to mind when post M&A organization is visualized. However, data needs to be one of the key focus areas in the broader change management plan. This should include a clear management vision, plan and review for the future state of data.
A wide-ranging due diligence needs to be carried out exclusively for data. This shall include discovery, identification, inventory/ catalog, comparison among entities, documentation, identification of gaps and overlaps, prioritization among others.
Based on the outcome of due diligence, a solid project plan needs to be created that covers determining the target data architecture, migration plan, infrastructure changes required, decommissioning of data silos, creation of new data repositories (if needed) etc.
At the risk of stating the obvious, the quality of due diligence and planning phases determine the success of execution.
Here, our clients find that there are two key levers to success:
- Management guidance and oversight int eh form of a clearly articulated data governance strategy that outlines operations for people, processes and data lead to a significant higher level of efficiency.
- Using a data integration platform that can help bring the different silos of data together
We help our clients follow the above to avoid two key risks specific to data post M&A:
- Disruption of business operations due to issues with data relating to one of the key dimensions: timely, accurate, complete
- Creating more silos of data that provide temporary relief but are not useful to unlock value
In order to consult with us on your post M&A data requirements, please email us at email@example.com.