What is Merger and Acquisition Data Migration?
Data transfer between a buyer and seller is a critical component of a successful merger and acquisition (M&A) transaction. Data ownership is often scattered amongst various locations, platforms, functions, systems, and devices, making it difficult to smoothly handover from seller to buyer. A few of the challenges involved in M&A data migration include:
Technology. Technology integration in a M&A is known to be a complex challenge. Some of the underlying challenges are related to poor planning, insufficient scoping, inconsistent data-related processes and practices, interoperability issues, and poor communication.
People and roles. M&A creates a lot of confusion for employees of both the buying and selling organizations as employees are pulled between their original roles and responsibilities and new requests and responsibilities that are being assigned to them1. During this transition there are many data requests and duplicate requests, while many employees are still uncertain of their roles and who the data request recipients are.
Compliance. Often, the two organizations involved in the M&A did not maintain the same levels of compliance and regulation, pre-merger. Regulatory reporting activities should include both the buyer and the seller, and should be completed under one entity, as regulatory certifications such as FDA and ISO are not always transferable.
Short timeline. It is often the case that data migration must happen swiftly, even amongst great complexity and confusion.
Tips for successful M&A data migration include:
Expert assistance. Call on data migration solution providers if your IT staff does not have the necessary skills or manpower to manage this difficult and complex task in a timely fashion without experiencing burnout and/or duplication of efforts.
Define roles. Explicitly define who is responsible for signing off on various aspects of the M&A data migration to avoid confusion and disruption.
Locate, profile, and clean data. Create an inventory of data with assigned levels of importance and sensitivity, and detail how the data will be managed. This step is critical for securing data, organizing data, removing unnecessary and duplicated data, archiving data, and removing errors from data.
Shut down redundant systems and applications. Having multiple live and legacy systems is wasteful from both cost and operational standpoints, and it also creates opportunities for cybersecurity vulnerabilities to be exposed and exploited. The buying company should determine which systems and applications to keep and integrate, and which should be decommissioned.
Test. Continually test for issues during all phases of the data migration so that they can be addressed immediately.
1 Ahmadi & Nagineni, 2022, “Optimizing data pipelines during mergers and acquisitions”