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Data Scalability for Mergers and Acquisitions: How?

insightsoftware -
November 16, 2022

insightsoftware is the global provider of enterprise software solutions for the Office of the CFO to connect to & make sense of data in real time, driving financial intelligence across […]

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The rate of acquisition and consolidation is increasing, as economic volatility prompts strategic transitions. Aggressive growth companies are seeking out strategic acquisition targets to gain expanded capabilities, extend their portfolio of IP holdings, and accelerate entry into new markets. Smaller startups frequently look to acquisition by a larger company as a viable exit strategy.

The increasing frequency of mergers and acquisitions challenges organizations’ capacity to bring data together and consolidate reporting at scale.

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In a fast-paced business world, companies naturally want to hit the ground running with newly acquired organizations. Yet post-acquisition integration challenges can quickly stall progress.

It’s hard enough to consolidate new teams into a workforce, as differences in corporate culture, company policies, compensation, office locations, and other factors often generate friction.

Today’s organizations face yet another challenge, however. Data is increasingly understood to be a critical corporate asset. Companies that can master analytics stand to benefit from better decision-support, increased agility, and strategic insight.

When two organizations come together, they typically bring diverse data assets to the table. In most cases, they’ll be working with different ERP systems, for example. Even if they’re using the same ERP software, it’s likely that nomenclature and configuration differences will make it difficult to view and analyze those two datasets as a unified whole.

Now add different CRM systems, e-commerce, digital marketing automation, operational systems, and even homegrown databases designed for use cases unique to one of the merged entities. The array of data sets can get very complicated, making it difficult to generate meaningful reports and analytics.

Those who develop organizational integration as a competency will be able to grow faster and leapfrog the competition. In today’s business environment, that means having the ability to quickly and easily unify diverse data sets and generate meaningful insights reports from them.

Companies that are seeking to be acquired, likewise, will benefit greatly by putting systems in place to simplify data management and reporting across diverse software systems.

Illustrating the Challenge

Consider a fairly common example: Product management leaders within your organization would like a better understanding of seasonal sales patterns and long-term trends for all of the company’s products and services. You’ve made two acquisitions in the past year. Consequently, sales history is spread across three different ERP systems. Item master data is defined and organized using different nomenclature, making it difficult to sort and filter the information effectively.

To make matters worse, sales territories and lines of business have been defined differently across the three organizations. This makes it virtually impossible to build meaningful analytics around the sales territory data stored in each of the three ERP systems.

Most companies will take one of several different approaches to dealing with this problem. They’ll dump the data to Excel, spend days cleaning it up and harmonizing it, then build spreadsheet-based reports manually. This is tedious, time-consuming, and error-prone.

Others will do their best to make sense of the different reports they get from their three ERP systems, even if two of those systems have since been retired. Unfortunately, that leaves the product management team with a disjointed view of the information – comparing apples to oranges.

Still others will throw up their hands in frustration, leaving them without a clear picture of historical sales trends.

None of these is a viable solution, particularly when you consider that this example only highlights the needs of a single department within the company. If organizations intend to capitalize on the value of their internal data, they need a way to bring that data together with a unified structure, at scale.

Which Organizations Are Challenged by Disjointed Data?

Any company that has made an acquisition in the relatively recent past can benefit from a unified data management and reporting solution. Instead of managing multiple reporting tools and databases, they can build all of their analytics around a single solution. This provides a holistic view of the business and its history and enables companies to finally retired those legacy systems inherited through acquisition.

Companies that intend to make acquisitions in the future can likewise benefit from a unified approach to data management and reporting. By building organizational integration as a competency, companies can enable more acquisitions and faster time to value for each of those transactions. A holistic approach to data analytics enables companies to fast-track that process.

Organizations with aggressive growth ambitions, in particular, must be able to handle orders of magnitude increases in data volume. Companies planning large expansions stand to massively increase the number of data sources and the overall volume of data they must manage. A small retailer that acquires a competitor, for example, can quickly find themselves with substantially more databases and data, making it necessary to scale up quickly.

Companies that wish to position themselves as targets for acquisition benefit by offering a simplified integration process, also offering faster time to value.

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