Planning for Mergers & Acquisitions: Make Sure Data Movement Is On Your Checklist
Mergers and acquisitions have just about become a fact of life for large enterprises and even for small and medium-size businesses poised for growth. They are difficult to predict and can happen at a rapid pace. Those in the company who need to make adjustments to accommodate the added personnel, as well as the new physical and digital assets, usually receive very little advance notice.
For some companies, mergers and acquisitions occur every quarter or even every month. Recent studies show just how prevalent the activity is across several vertical sectors:
- An Accenture survey of C-suite executives representing 13 industries in seven countries shows 84% indicate their firm acquired another company in the past two years; 33% acquired five or more.1
- According to a Morgan Stanley report, the global economy experienced three consecutive years of mergers and acquisitions above $3 trillion from 2015-17. 2017 marked another year of near-record activity, and 2018 could be even busier.2
If your business did not experience a merger or acquisition in the past 12 months, there just might be one around the corner. One of the key considerations is to determine how to handle all the new data that needs to be managed. Preparing to move and standardize data quickly plays an important role in ensuring mergers and acquisitions go smoothly.
What Do Mergers and Acquisitions Mean for IT?
When enterprises merge with or acquire another company, every business unit and department has decisions to make. They need to decide if and how the new personnel and workflows will be absorbed into the existing corporate org chart and business processes. The role that IT plays relative to other corporate departments tends to be more complex—depending on the new technologies to be integrated into the existing corporate infrastructure.
For example, the applications, data and hardware in use at the company coming into the fold may not integrate easily. If end users at the newly-acquired company need to convert over entirely to the applications and hardware devices in use at the parent company, they will all require training. Conversely, if the newly-acquired company will keep running its own applications and using its own hardware devices, the IT team back at corporate then has to learn how to manage the new technologies.
Perhaps the IT department at the acquired company can help—but the acquisition may eliminate all of those positions as consolidation takes place. Even if the new IT team members are kept onboard, some of them may opt to resign, perhaps en masse, and without notice!
Whether it’s standardizing on infrastructures, platforms and applications; determining how to consolidate IT staffs; deciding how to manage the new environment; or integrating data, IT has a lot of work on its hands. And they may not have much time. Banks that provide acquisition financing often set a deadline on when IT systems need to be integrated—and they usually do not take into account what is practical for the IT team.
One of the more important considerations for IT in taking on these challenges is data movement. The ability to migrate data quickly and convert it to standardized formats is paramount when absorbing an acquired company.
The Key Role of Data Movement
If the data doesn’t move following a merger or acquisition, the business doesn’t move. After all, corporate management needs current data to know how the new business unit is performing. Without it, management can’t roll up the business unit’s KPIs into the company’s overall KPIs to establish a baseline of the new organization.
The quality and the formatting of the data that’s moved also impacts all IT functions. Ensuring IT processes will work efficiently requires consolidating cloud storage instances onto a standardized, single platform, which enables data to move quickly and properly feed into corporate systems.
As IT works to accommodate a merger or acquisition, data migration thus plays a key role and needs to be a big part of the planning. Given the nature of mergers and acquisitions—where executives usually keep potential activity close to the vest until the very last minute—IT likely will have little time to prepare, absorb the new technologies, and provision IT services for all the new end users.
Advance preparation is vital. Here are a few recommendations to help you get ready:
- Work with the executive team to forecast what’s coming. This information may not be sharable with the IT team, but if senior IT leadership has an idea, they can prepare to allocate the resources.
- Based on recent acquisitions and the type that might be coming, create a game plan for how much time IT needs to migrate data from another company as well as the required personnel resources.
- Identify the storage and compute resources that will be required. Some companies purchase bulk storage in advance to lower long-term costs and to enable them to move data more quickly.
- Procure resources that know how to closely analyze source data and determine what it will take to map that data to the data formats that you already have.
- Select and deploy technologies that enable you to quickly transfer and integrate large volumes of digital content, files, and data.
- Enable your IT team to operate more efficiently by automating time-consuming and error-prone data movement tasks such as data ingest, file migration and synchronization, and data analysis and visualization.
It’s also critical to prepare for the unknown, or at least be aware of some of the curveballs that might come your way. For example, the data structure of an acquired company might be a mess and require significant cleansing before it can be migrated. There may also be custom applications that have to be maintained and still integrated with the corporate infrastructure. If the acquired company is in a different industry, there could be new compliance regulations that the corporate IT team needs to understand.
Be Ready to Hit the Ground Running
By creating a packaged data migration plan ahead of time that shows all the tasks you need to check off, you can position your IT team for success and create a smooth process. Migrations are also easier if you already have a consolidated storage environment that has been set up with custom processes. To get a sense for just how beneficial a consolidated storage environment on a single cloud platform can be, check out the Eastridge Workforce Solutions case study.
As many IT team have discovered, already having a migration process in place allows you to be ready to hit the ground running when the CEO walks in and announces, “Guess what? We just acquired another company.”
For help in developing a long-term strategy to move your company’s data files to a standardized storage platform in the cloud, sign up for a free trial of Tervela Cloud FastPath and discover the power of cloud migration!