Thu, Jul 9, 2009 15:11 EDT

Going ‘back to basics’ during M&As – don’t forget about the data

Posted by: Gert Raeves Gol... in Best Practices

Topic: Data Center

Current Rating: Comments: 0

The failure rate for merger and acquisitions is painfully high and the amalgamation of IT functions pose a major obstacle in the successful assimilation of companies. For any CIO, the key to reducing chaos and delivering anticipated shareholder value is to get back to basics and take a long hard look at the data level.

Larger financial institutions have anywhere from 30 to 35 different data silo marts, and if an organisation acquires or merges with another, there are closer to 70 different data silos to integrate. Each of the merging companies will already have its own business processes, procedures, and applications where customer and vendor records are maintained, which is why data integration and data quality are fundamental components to ensuring success. A centralised, shared data layer, for example, can assure that critical business areas like risk management and P&L run as normal, powered by accurate, validated information. If these processes are driven by accurate data which lead to accurate outputs, organizations will have little immediate need to replace/integrate core systems, extending the shelf life of existing platforms.

Improved regulatory/customer reporting also don’t need to be ‘nice to haves.’ A shared data layer can create a single view of factors common to both parties such as products, customers and counterparties as well as significantly improve consistent reporting across the newly merged/acquired businesses. The success of any merged entity will be measured by pre- and post-merger financial metrics like ‘assets under management’ and client profitability – and these numbers are dependent on integrated sets of data around products, counterparties, positions, etc.

Data integration and quality is paramount to extending the life of what you have, reducing operating costs and protecting the business, while maintaining ‘business as usual’ perception.

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