Tag Archives: M&A
I recently had the opportunity to travel the globe, meeting with CIOs in Brazil, South Africa and Hong Kong. During my meetings, we had the opportunity to discuss the relevance of data within their organizations and a strong thread emerged.
First stop, Brazil – While in Brazil, I was able to meet with senior. IT people from multiple industries who were all very receptive to meeting with me. I was hesitant at first given that I work for a software vendor. I found this experience to be different from the US, where CIOs tend to be more skeptical of anyone associated with a vendor.
I found that there was a high degree of interest in becoming information driven. For example, a telecom provider I met with had the understanding that at one level, the products they provide are at parity with the competition. The realization they came to was that they would need to use data to create unique and differentiated products – quickly to remain competitive. The net result would be to use data to create a sustainable competitive advantage.
My takeaways from Brazil? A mature IT market with a strong desire to push the IT envelope. (more…)
Realizing the expected value of M&A is a well-known, top-ranked challenge. Information plays a crucial role in closing the gaps in due diligence, scenario-based planning, post-merger integration and revamping of the merged entities. To address these challenges, I co-wrote an article on effective information strategy for Mergers, Acquisitions & Divestitures with Deloitte.
In a nutshell, M&A deals are complex, and effectively tackling them is more art than science. Leading organizations have been effective in delivering the intended value from M&A, while positioning themselves for increased agility and competitive advantage with robust practice in managing data. This remains valid in the current, volatile environment and equally so for cross-border M&A transactions.
Rewards for cross-border transactions are obvious; access to a new labor pool, a combined portfolio of customers in new geographical territories, and expanded, global distribution. Of course, cross-border deals have additional complexities, including cultural differences and diversity, physical distance and time zone differences.
It seems like almost a lifetime has passed, but six months ago at Informatica World 2008, one of the keynote presentations contained a demonstration of the Informatica Platform. The demo focused on how Informatica products can help companies before, during and after a merger or acquisition (M&A) to address integration challenges. The relevance of it still stands today.
Early in the demo, Adam Wilson stated that there were 4.5 trillion dollars of M&A activity last year, representing over 45,000 transactions. Based on those numbers, I think it is safe to say that the majority of the market has probably been impacted by M&A in some shape or form.
Adam went on to say that 3-6 months post-M&A, most companies cannot get a consolidated view of financial or operational data and even after 2-3 years, 32% of companies still cannot achieve this. While certain types of M&A activity has slowed in 2008, there is still a flurry of activity going on especially for companies that buy and collect debt, thus many companies are still facing significant integration challenges.
One of those challenges is rationalizing data assets. It is likely that after M&A, companies will have duplicate customers, vendors, and potentially products across their IT systems. For example, the same entity may be represented in different ways across systems such as Bank of America, BofA, Bank of Am., etc. Rationalizing these data assets can be challenging, but with the right set of tools it can be managed. Data quality technology can help address this issue, by not only helping to identify these near duplicates through fuzzy matching technology, but it can also allow standardization of the data values so there are a common set of terms.
The demo is available on the Informatica web site and is entitled The Informatica Platform: Release 8.6.
Have a look and let me know your views. Are you currently or have you recently experienced any M&A activity? Was data quality an issue for you?