5 Data Challenges with Mergers and Acquisitions


When it comes to mergers and acquisitions, having an integration process in place is key. Organizations run into post-merger integration (PMI) failure when their plan for combining entities is lackluster and not well thought out. It takes a lot for a successful M&A transaction that relies on multiple entities converging into one, such as people, customers, processes, information systems, and data.

The key to a successful merger and acquisition is managing data and keeping up with the momentum. Companies have to follow through with objectives to ensure success. Organizations are not just merging books and acquiring intellectual property; they are acquiring an entire company’s data. While legal and financial ramifications seem to get the most attention, managing and transferring data have the most profound impact on a successful M&A. That being said, there are five data challenges to prepare for when it comes to mergers and acquisitions.

Understanding the Other Companies’ Data

Many companies are unaware of what data they have, so it should be no surprise that merging with another company’s data seems daunting Nonetheless, it is critical to understand what kind of data you will be dealing with. If you do not understand the data you are integrating with, how will you know whether the company has personal information subject to a foreign law like the GDPR? How will you know how to handle this data following regulations?

To ensure a successful transition, an organization needs to know what ROT (redundant, obsolete, trivial) data or dark data they have, and that of the company they are merging with. This is important because you will know how to manage this data properly. One of the first steps in the acquisition process should be becoming familiar with the data you will be working with. With this information, it will be much easier to have a comfortable transition.

Handling Data Silos

It is very likely that your organization and your M&A company structure data differently. Taking down your data silos that have data centrally managed with automation will come in handy, if your M&A company does not have great data management practices. If their data is segmented into silos, the only way to sort through this data is through an intelligent data automation program that can open these silos and identify what is inside.

Even if both parties have created perfect data lakes free of silos, there will still be data hurdles. In a way, your two businesses are giant silos in and of themselves. To truly merge data, you’ll need to assimilate how these files are classified and stored. Automation is essential because the magnitude of data each organization has likely exceeds hundreds of terabytes.

Knowing Data Risks

During a merger and acquisition, your data is more vulnerable than ever. One of the most common data breaches is when employees fall victim to phishing schemes or emails that contain malicious code. Typically employees use caution and try to filter through potentially dangerous emails, but with an M&A, people let their guards down. This is often because employees now expect emails from an outside organization, creating the perfect opportunity to fall prey to cybercriminals.

As you bring employees into your data ecosystem, the risk of data loss naturally increases. When files get moved around, and access permissions are modified, data can easily be lost or forgotten by accident. That’s why having the right tools to keep everything on track is so necessary. Relying solely on your staff to handle the data merge will most likely result in human error that can cause data breaches during these transitional moments.

Data Integration

Now comes the need to integrate both companies’ data sets to maximize each party’s potential. Say, for instance, you are a smaller company that a bigger company has acquired; you will most likely benefit from their vast data stores. Before you reap the benefits, though, you need to integrate the data first.

To do this successfully, you must understand the data you are integrating with. After integrating the data, it is time to simplify the classification process with automation. By identifying and tagging all files between both organizations, you can decide where everything should be stored, how to control access, and which files need to be deleted. Your organization will then be able to access data easily, and operations will run smoothly.

See More: Top 4 Considerations for Choosing a Data Integration Tool for WFH World

Heightening Analytics & Achieving a Successful M&A

After your data is integrated, you then have the capability of analyzing your data. By incorporating data from your M&A company, you can have the capability to inspect a wider range of the market. An organization’s BI tools can now take this data brought through the merger and fuel varying dashboards, garnering new insights.

Mergers and acquisitions no longer need to threaten your data because you know how to handle looming data challenges. When you are aware of what data you and your M&A company have, you can make decisions on what needs to be kept or what needs to be deleted. For newly acquired businesses, proper data management can set the stage for instant revenue growth.

What challenges have you faced during mergers and acquisitions and how have you resolved them? Let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window .