# It’s what you know: the role of data in mergers and acquisitions Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-07-28 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Data-Driven Mergers and Acquisitions: Maximising Value in Tech Meta Description: Discover how successful companies leverage data integration to drive value and achieve seamless M&A transitions in the digital era with insights from URL: https://financedigest.com/its-what-you-know-the-role-of-data-in-mergers-and-acquisitionshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/five-businesspeople-in-boar-1736843651282-compressed.jpg) _**Andrew Joss**, head of industry consulting EMEA, Informatica_ ![Andrew Joss](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/andrew-joss-300x300-1736843651136-compressed.jpg) Andrew Joss There’s a lot of jostling at the top of the tech leaderboard as we move into 2017. [Mergers and acquisitions](https://www.financedigest.com/how-to-handle-cyber-security-during-mergers-and-acquisitions.html "How to Handle Cyber Security during Mergers and Acquisitions") (M&As) are a good way for companies to climb that board. They help [businesses rapidly expand](https://www.financedigest.com/how-to-expand-business-reach-with-event-driven-apis.html "How to expand business reach with event driven APIs") their skill set, customer base and revenue. But in the [digital era](https://www.financedigest.com/staying-ahead-in-the-digital-era-a-cfos-roadmap-to-future-proof-solutions.html "Staying Ahead in the Digital Era: a CFO’s Roadmap to Future-Proof Solutions"), how does that work in practice? When a merger or acquisition takes place, in large part it’s the information exchange that matters. But how do you merge two companies whose essential [data resides in different on-premise and cloud systems](https://www.financedigest.com/interoperability-of-data-to-accelerate-the-whole-slide-imaging-systems-market.html "Interoperability of data to accelerate the Whole Slide Imaging Systems Market")? **Why focus on data?** The standard M&A due diligence process is designed to evaluate the ‘fit’ of prospective businesses, but it should also evaluate the fit of their data. Good [data exchange is essential to drive](https://www.financedigest.com/how-alternative-data-drives-e-commerce-success.html "How Alternative Data Drives E-commerce Success") value from the new synergies between the two companies. Companies must be able to use their [shared data](https://www.financedigest.com/world-shares-rise-u-s-yield-curve-inverts-after-strong-jobs-data.html "World shares rise, U.S. yield curve inverts after strong jobs data") as quickly as possible to drive financial value – for example, by boosting up-sell activities. It’s [important to consider what insights the combined data](https://www.financedigest.com/when-not-if-why-a-data-breach-response-plan-is-more-important-now-than-ever.html "When not if: why a data breach response plan is more important now than ever") will provide. Most importantly, the data needs to fit together for one goal. Some big names have already used a strong data-merging strategy during their M&As. For example, when BNY Mellon was founded, the data of its two constituent companies (The [Bank](https://www.financedigest.com/finance-brokers-bank-on-red-flag-alert-to-help-beat-fraud.html "FINANCE BROKERS BANK ON RED FLAG ALERT TO HELP BEAT FRAUD") of New York and the Mellon Financial Corporation) was rapidly integrated. This helped the bank to quickly reap the benefits of the merger. It reduced the cost of data integration for its [Asset Servicing project by 50 per cent and combined its client base with minimal customer](https://www.financedigest.com/why-equipment-assets-should-be-the-source-of-your-customer-strategy.html "Why Equipment Assets Should Be The Source of Your Customer Strategy") interruption.\[1\] **Data-merging difficulties** However, despite the potential rewards, creating value from two companies’ data is easier said than done. There are a lot of potential pitfalls. For example, how similar are the forms of [data storage](https://www.financedigest.com/data-storage-market-revenue-is-expected-to-increase-at-a-cagr-of-13-6-during-2021-2025.html "Data Storage Market revenue is expected to increase at a CAGR of 13.6% during 2021-2025")? Will it be possible to integrate the two sets quickly, or will it require a major re-coding? Format, volume, location and movement are all important considerations. Additionally, data may be captured and managed differently in different organisations. Standards, processes and procedures of [data governance](https://www.financedigest.com/internet-data-growth-has-not-pushed-up-telcos-network-costs-dutch-government-says.html "Internet data growth has not pushed up telcos’ network costs, Dutch government says") can vary widely, and the quality and relevance of the information may be far from optimal. The core technologies used to process company data can also provide an obstacle – some companies have cloud models in place; others operate large, organic legacy systems. Traditionally it has taken a lot of planning and work to [integrate data during the M&A process](https://www.financedigest.com/ma-integration-challenges-cultural-alignment-and-change-management.html "M&A Integration Challenges: Cultural Alignment and Change Management"). **Building a new system** So how do you make it work in practice? Take customer data as an obvious starting point. The company is likely to utilise the larger pool of customer data for up-sell, cross-sell, retention and win-back purposes. Unfortunately, many [companies don’t have a single](https://www.financedigest.com/single-lead-ecg-machines-market-global-leading-companies-analysis-revenue-trends-and-forecasts-2027.html "Single Lead ECG Machines Market Global Leading Companies Analysis, Revenue, Trends and Forecasts 2027") holistic view of that data, so it’s difficult to integrate. What’s more, M&As [automatically create a split system](https://www.financedigest.com/automatic-identification-system-market-estimated-to-exhibit-6-4-cagr-through-2027.html "Automatic Identification System Market Estimated to Exhibit 6.4% CAGR Through 2027") that has to be unified. So even if both parties do have a holistic view of customer [data there is still the challenge](https://www.financedigest.com/financial-services-and-data-how-do-we-meet-the-challenge.html "Financial services and data – how do we meet the challenge?") of creating a new version for the post-M&A organisation. The [time](https://www.financedigest.com/in-line-transit-time-ultrasonic-flow-meters-sales-are-set-to-be-valued-at-us-337-5-mn-in-2021.html "In-Line Transit Time Ultrasonic Flow Meters sales are set to be valued at US$ 337.5 Mn in 2021") and resources it takes to do this could slow down value delivery – which is a problem given rapid value is one of the main purposes of M&As. The activities that follow (marketing campaigns, for example) will also be heavily impacted by how [well it’s achieved – poor data leads](https://www.financedigest.com/corporate-wellness-market-insights-by-leading-companies-and-emerging-growth-till-2026.html "Corporate Wellness Market Insights by Leading Companies and Emerging Growth Till 2026") to poor decisions. **Make the most of what you’ve got** To tackle M&A data-related issues, organisations must first identify the potential [future value](https://www.financedigest.com/tissue-cultured-date-palm-market-pegged-at-us-4-5-bn-value-pool-in-2027-import-export-activities-take-a-downturn-amid-coronavirus-outbreak-future-market-insights.html "Tissue Cultured Date Palm Market Pegged at US$ 4.5 Bn Value Pool in 2027; Import & Export Activities Take a Downturn Amid Coronavirus Outbreak: Future Market Insights") associated with merging data sets – what are they trying to achieve? Then, with that in mind, identify the right data types to be merged (for example, potential up-sell contacts), assess their compatibility with each other, and plan how to integrate them in the new system. Once the planning is complete, companies should proceed to match and merge these ‘key data entities’. This should be done with the highest possible level of accuracy. When merging customer data, for example, companies should determine if they have separate records relating to the same customer and then use them to create a ‘golden view’ of that customer using the consolidated information. With the system up and running, it’s then essential to run regular quality assessments and remediate any data inconsistencies. **Data: leading the way for M&A** This is a very simplified set of steps. The idea is to get [institutions thinking about the potential **_value_** of the data](https://www.financedigest.com/three-layers-of-hybrid-workforce-data-for-financial-institutions.html "Three Layers of Hybrid Workforce Data for financial institutions") post-M&A, and what they will need to achieve that value. This same [approach can also act as a basis for reducing the risk](https://www.financedigest.com/demystifying-us-feds-approach-on-systemic-climate-risk-stress-testing.html "Demystifying US Fed’s approach on Systemic Climate Risk Stress Testing") of data leaking out during the merge through unwatched channels (old websites, for example) and to help decide which apps can be retired. Businesses considering their next M&A venture must focus on data from the earliest stages of planning. If you can’t reliably integrate with your acquisition or partner’s data stores, you [risk losing](https://www.financedigest.com/ecb-risks-losing-sight-of-greedflation-with-laser-focus-on-wages.html "ECB risks losing sight of ‘greedflation’ with laser-focus on wages") much of the potential value of a merger. Information is the most valuable business asset – company leadership must put [data front and centre](https://www.financedigest.com/the-gdpr-and-the-future-of-data-transfer-by-ben-seretny-head-of-dpos-the-dpo-centre.html "The GDPR and the future of data transfer – by Ben Seretny, Head of DPOs, The DPO Centre") in M&As. \[1\] [https://www.informatica.com/gb/about-us/customers/customer-success-stories/bny-mellon.html](https://www.informatica.com/gb/about-us/customers/customer-success-stories/bny-mellon.html) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---