Playing in the Merger and Acquisition Majors with T-Ball-Level Data Integration

Loraine Lawson

There really should be some rule that if you’re going to play in the big leagues, you’ve got to bring the right equipment to the game.

In the same way you wouldn’t play major – or even minor -- league baseball with cheap bats, plastic balls and worn-out shin guards, you shouldn’t try mergers and acquisitions with manual data entry, hand-coded integration and Excel spreadsheets.

But, alas, that’s more or less what many companies do during mergers and acquisitions, as Gartner Analyst Andrew White recently pointed out.

Experts say U.S. firms are beginning another major binge of mergers and acquisitions this year that may exceed every year since 2000. A recent Time article points out spending is already outpacing last year: Recent data from Dealogic shows U.S. companies have spent $219 billion on mergers and acquisitions this year, as compared to 2012, when companies spent $85 billion during the same period.

Let’s hope this time companies learn from the past and bring in CIOs early, while these deals are still in the planning stages. Otherwise, they may face major problems with data and integration down the line.

In a recent Sand Hill article, Liaison Technology’s Robert Fox, senior director, B2B/EAI software development, made the case for better data management during mergers and acquisitions.

“Data integration and master data management (MDM) should not be underestimated as an enabler for success at every juncture in the M&A process — from the preservation of business continuity to a driver for post-transaction innovation,” Fox writes. “A successful MDM strategy can even lower the barrier on future M&A activity.”

He explains why and even offers a B2B example of an office supply company that acquired dozens of companies, and wound up with about as many “loosely integrated” ERP systems and many more pricebook systems.

Of course, Liaison Technology is an integration company, so some might dismiss this as a very biased, self-promoting argument.


That doesn’t mean he’s wrong. Back in 2009, Evan Levy, co-founder of what was then Baseline Consulting Group, made a similar argument for master data management during M&As.

And it’s not hard to find examples of companies that neglected integration during M&As, triggering all kinds of problems, from customer contempt to government audits.

There are also examples of the opposite: Companies that dealt with the data integration in a smart, proactive way.

So what’s it going to be? Shoddy gear and makeshift bases might be fine for pick-up games in the back yard, but when it comes to mergers and acquisitions, shouldn’t your IT plan be major league?



Add Comment      Leave a comment on this blog post
Mar 6, 2013 1:30 AM ksuresh ksuresh  says:
Good article. I read a whitepaper on this very topic "Strategic growth and the impact of an effective integration infrastructure" it provides good information on post M&A integration and its importance, readers will find it very helpful @ http://bit.ly/UvpjVz Reply

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