Consultant: Master Data Management Can Pay off During M&As

Loraine Lawson

Master data management initiatives are known for being expensive and cumbersome. In fact, it looks like exactly the sort of project you would want to avoid if you're facing a merger and acquisition in your near future.

 

But MDM can really pay off during mergers & acquisitions and other corporate restructurings, according to Evan Levy, co-founder of the Baseline Consulting Group.

 

When companies begin mergers and acquisitions, the focus is always on the financial aspects of the deal first. Bloor Research found that 79 percent of M&A activity ignores IT integration outright. So, for many IT deparments, the real work begins after the ink has dried-a situation that some IT experts believe could contribute to the ridiculously high failure rate of M&As.

 

As Levy explains it, MDM could resolve a lot of the problems IT faces during these deals. He writes that typically, the approach is to move one company to the other company's systems. Of course, that's no fun, but it also affects the operations of at least one company, which has to re-engineer its processes to accommodate the system change.

 

During a merger and acquisition, the last thing IT needs is more work. In fact, according to Levy, most companies want to allow the acquired company to operate with the same systems and methods it already has, but integrate that information with the acquiring company's systems. Levy contends that MDM offers a better solution, giving companies a way to have their systems and their integration, too:


 

"MDM provides a company the capability to link the data content from disparate systems within and across companies. I'm not talking about linking Linux with Windows, I'm talking about matching and linking business content across dozens or even hundreds of systems. This way invoices continue going out, sales people continue getting commissions, and customers can still get product support in a seamless way."

 

What's more, MDM provides on-going support for data matching, cleansing and management-something that he points out is an ongoing process, not a one-time activity.

 

Integration is a major challenge during mergers and acquisitions. But while MDM can simplify that integration work, MDM is still a substantial integration undertaking in and of itself. Here are a few ITBE resources to help you start planning:

 

Questions to Ask Before Starting Master Data Management
How to Pick an MDM Style That Fits Your Business Needs

Should Your Master Data Be Separated from Your ERP Systems?

Winning over the Chief Procurement Officer with MDM
The Perfect, Rocky Marriage of SOA and Master Data Management



Add Comment      Leave a comment on this blog post
May 18, 2009 11:27 AM Evan Levy Evan Levy  says:

Hi Loraine and thanks for covering my blog post.

While we're seeing a range of business justifiers for MDM, corporate restructuring efforts are one of the most visible drivers for the aquisition of MDM solutions. My theory about this is that the short term need to integrate data has challenged the traditional long term approach of rehosting applications. The business executives have a sense of urgency around reconciling the data from newly-acquired companies or restructured organizations.  MDM decreases the time of data integration significantly and allows companies to gauge common customers, and the impact of the restructuring on existing customers, in record time.

In short, the time to value is remarkable, and arguments about architectural styles and product features are shortlived. As you so rightly said, "...the last thing IT needs is more work."

Evan Levy

Baseline Consulting

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