The Key to M&A Success
The ability to handle data integration and management efficiently is a key factor in M&A success. Companies that are contemplating M&A activities should consider taking a modern approach to data integration and management so they can more effectively manage deal-making activities, align disparate elements and start generating value faster.
In a recent EY M&A outlook survey, more than 90 percent of executives predicted that the deal-making market will grow or at least hold steady in 2017. For businesses involved in M&A deals, there are many integration points to plan and execute. But in an age where data looms large as a core business asset, the ability to quickly secure information and rapidly bring merging companies’ IT systems together to create a unified operating environment can have a significant impact on overall M&A success.
That’s why more companies are looking to managed services partners to handle data on an outsourcing basis as they move through the M&A process. It reflects a larger trend, where companies are focusing on core competencies and finding partners to assist with vital tasks that require significant, specialized expertise and resources. With no margin for error in merger-related data integration activities, companies turn to managed services for the following benefits:
- Road-mapping expertise: In-house IT professionals may have experienced a merger or two over the course of their careers, but they’re usually not M&A data integration experts. People who provide data integration managed services typically participate in dozens of M&A data integration projects every year, so they’re familiar with the challenges and risks involved. They can use this knowledge to assess the current state of IT operations, address pre-integration challenges and create a roadmap that identifies risks and aligns IT and data integration objectives with the overall M&A strategy.
- Design and development services: IT services in merging companies are typically swamped with requests for merger-related tasks. That’s the wrong time to ask them to take on a massive design and development assignment — especially one so critical to top-line success. Managed services providers have the resources to scale up and handle all facets of user interface design and development, including the initial assessment, integration, testing and knowledge transfer. As requests for customization arise, managed services providers can ramp up resources to meet the challenge.
- Ongoing integration support: Data integration isn’t a one-off event, even in an M&A context. Once design and development is complete and the post-M&A entity is operating within a single environment, it’s still necessary to monitor integration processes, address requested changes and keep an eye on quality. Companies that rely on in-house IT professionals may lose out on continuous integration improvement opportunities since their team will be too busy handling routine tasks. Managed services can ensure the newly merged company has the resources it needs to optimize IT.
In addition to managed services for data integration, managed services for data management can also help companies involved in the M&A process generate the insights they need to optimize business decision-making. One of the key findings of the EY M&A outlook survey was that 91 percent of survey respondents expect to use big data and analytics as part of the deal process, so it’s clearly critical to synchronize and migrate data, consolidate redundant systems and break down silos. Managed services can help companies achieve these tasks in the following ways:
- Simpler delivery and better scalability: Master Data Management (MDM) managed services can handle the rigorous data cleansing and rationalization tasks that surface during the M&A process. Cloud-based MDM managed services also allow merging organizations to take advantage of cost predictability and scale up rapidly during the merger process and beyond.
- Global capabilities: M&A scenarios frequently involve an influx of data in new formats, as well as a need to adhere to new standards and compliance rules. MDM managed services providers have the experience needed to handle new data formats as well as the expertise to guide merging companies on how to meet new standards and compliance requirements.
- Comprehensive community management: M&A situations don’t just bring the merging companies together — trading and business partners are often involved, too. An MDM managed services partner can facilitate success by integrating, collecting and managing third-party data too, handling associated tasks effectively at every stage of the M&A process to preserve continuity.
Data is the new business currency in today’s economy, so how well merging companies handle data integration and management has a direct impact on M&A success and return on investment. By partnering with a provider of data integration and management services, merging organizations can close the gap in the resources and expertise necessary to successfully manage the transition. Just as importantly, the newly formed company can bring its disparate elements into alignment and start generating value more quickly.