Data Quality Success in Mergers and Acquisitions [2024]

Introduction

It is crucial that with mergers and acquisitions data the acquired company seamlessly integrates their operations, processes, and procedures to ensure that newly merged companies can operate successfully as one business. It is a major reason why mergers can often take longer than planned to settle down, possibly a sign that the target company’s IT and data management systems have not been adequately inspected before purchase.

The adoption of digital transformation strategies by an increasing number of companies has led to a general recognition that structured data management strategies are a fundamental requirement that drives all aspects of business operations, including finance, HR, logistics, and customer relations.

Mergers and Acquisitions not only provide tangible and intangible assets, people, and buildings; they also provide crucial and important data needed to make informed business decisions.

When mergers have trouble getting off the ground, it’s frequently because the potential buyers didn’t just fail to view these data resources as extremely valuable assets; they also neglected to create an effective post-acquisition data management strategy.

Data management plans are central to a successful merger, so they should be included in the due diligence phase of the merger process, if possible. By assessing the target organization’s systems, he or she can identify any weaknesses that could pose integration problems down the road.

A few questions that executives should consider when assessing how well their new partner organization handles quality data are listed below for any business or public sector entity that is contemplating a merger.

1. Organization have a centralized database management system

Many companies use departmental silos that share data infrequently or not at all. This can result in not only a number of problems, like duplication, incompleteness, or inaccurate information, but it can also be expensive in terms of time and resources lost on activities originating from operational decisions based on bad data.

It will be worth time spent to develop a post-merger plan to create a consistent, top-down system for managing data across the entire organization to ensure eventual success.

2. The actual data is how good?

The worst thing you can have is poor quality, unreliable data. Businesses operate blindfolded and relying on luck if their data cannot be trusted or analyzed with any certainty.  It is difficult to determine if the data is reliable. A randomized sample of records cannot be thoroughly tested with an off-the-shelf tool, however.

Whether to retain outdated and inaccurate data depends on whether this exercise reveals a high proportion of outdated and inaccurate data. It is important to remember that merging good and bad data is never a good idea, and you should always consider the old adage “Garbage in – Garbage out” before integrating legacy systems.

3. Policy that meet the latest governance standards

Mergers and Acquisitions – Data breaches today pose significant financial penalties to organizations that do not properly manage and protect personal data in accordance with the European General Data Protection Regulation (GDPR). Companies must have a written data management document that outlines the policies and procedures they are using to control where data is stored, who has access to it, how it is shared, and what cyber security measures they are deploying to protect it.

There is no way to leave this to the post-merger stage without creating major problems for the new company. Having a highly detailed data integration roadmap that is accessible to both organizations’ employees and stakeholders is critical to moving forward with the merger.