Mergers and acquisitions, or “M&A,” are on the rise in 2021, carrying over momentum from the end of 2020, presenting both opportunities and challenges to the organizations involved.
Typically, companies merge or acquire other companies because they operate in the same market sector and hope to gain efficiencies and economies of scale by leveraging shared resources. By sharing overhead and serving the same number of total customers, the companies can reduce costs and become more profitable.
Another reason companies merge or acquire other companies is to add useful expertise, experience, technology, or customer relationships. Company A might think Company B has a business model that enhances Company A’s customer experience offering. Company X might have developed a technology that nicely complements Company Y’s existing platform.
Whatever the reason, companies merge or acquire other companies because they see a long-term, strategic benefit. But these companies also understand—although they may often underestimate—the short-term, tactical obstacles that must be overcome to realize those long-term benefits.
Managing an Abundance of Data: A Nice Problem to Have but a Problem Nonetheless
Mergers and acquisitions are massive undertakings involving extremely complex legal, regulatory, and financial considerations. Once the organizations involved have finalized the paperwork aspect of M&A, the work has only just begun. Integrating two existing businesses can be a daunting challenge logistically.
Many people may be surprised by the data challenges involved in M&A. We can use the impact on staff as an analogy. M&A often has a profound impact on the people within each company. The companies need to decide how to merge not just the broader organizations but also the departments and teams within them.
This may mean that some staff are moved to new departments and teams with new managers, colleagues, and direct reports. These staff might find themselves in unfamiliar organizational structures with new policies and procedures. Often, staff need to be let go, because their role existed in both pre-merger organizations, and only one is needed post-merger.
Now, let’s think about data. Companies thrive on data, especially in a largely post-industrial, information economy like that of the United States. Companies store their data in massive databases, using one of several prominent commercial database management software (DBMS) solutions or even building their own. When companies merge, they need to combine two often very different databases using different DBMS tools into a single database with a single DBMS. This means massive amounts of data may need to be moved to new tables in new table structures and hierarchies. And in mergers involving closely related companies, there may be a lot of data that is duplicated and that needs to be let go.
Navigating this data challenge correctly is a major challenge for companies. They need to make sure the combined data can be utilized effectively and efficiently, and they need to be extremely careful they are not eliminating data they will need in the future.
Boomi Platform as a Solution to the Data Integration Problem
Boomi’s data integration platform offers several features that help address, mitigate and solve some of these common data integration problems. The platform has a user-friendly user-interface with features like drag-and-drop and automation tools.
Boomi also provides creative tools for solving data integration problems, such as crowd-sourced problem solving, automated regression testing and automated prompts with recommended solutions to common data integration problems. And Boomi provides version control and easy-to-use rollback features to address the stumbles and setbacks likely to occur with any large-scale data integration project.
Data integration is probably not top-of-mind for many people when thinking of the challenges in M&A activities, and that includes those directly involved in the associated businesses. But in an information-heavy economy, a company’s data represent some of its most valuable assets. Effectively consolidating the data of two—or more—organizations involved in a merger or acquisition is a challenge that catches many executives off guard.
Fortunately, there are tools like Boomi available to help navigate those challenges and guide the resulting organization to greater success through leveraging combined resources, including data. Interested in learning more? Contact us today for more information about how our solutions can benefit your business.