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When planning a post-M&A integration strategy, IT and data management is neglected at directors' peril.

Last year was another record year for spending on technology M&A, with the value of announced technology and telecoms deals, excluding debt, increasing 4.9% to £310.25 billion.

The growth in M&A activity presents some significant IT integration and data management challenges to businesses. Whenever deals are completed, the IT organisation within the newly merged business needs to rise to the challenge of integrating acquired applications with the existing infrastructure and supporting all the associated enterprise data. At the same time, they will have to tackle the inevitable duplication of enterprise applications like CRM and ERP, for example, running over the newly formed IT backbone.

In addition, M&As invariably lead to a larger base of customers, an expanded market reach and increased business scale. This presents an urgent challenge in managing data growth as businesses look to integrate the data assets of the newly-formed entity.

In many cases, there will be serious issues with data replication and the alignment of data types across the organisation. Typically, organisations will be dealing with multiple copies of production environments, customer, prospect and inventory lists. Many merged businesses will also be left with multiple duplicated databases.

As a result, IT integration and more broadly data migration are increasingly seen as key to the success or failure of a deal. About 85% of all such transactions fail or do not meet expectations and in many cases, the inability to integrate inherited data is the direct cause of it.

Indeed, a recent Accenture study found that few companies are giving enough scrutiny to the integration of technology post merger and acquisition. Often, merged entities will either default to choosing a system from the dominant organisation or opt for a temporary fix to their short-term needs.

This knee-jerk response invariably fails to adequately address either the IT integration, portfolio rationalisation or data management needs of the business.

The period immediately following a merger or acquisition provides an opportunity for businesses to rationalise their IT infrastructure and concentrate on enhancing performance and reducing operational costs.

Organisations should remove redundant applications and standardise on those which best complement the strategic objectives of the newly merged organisation.

This process of rationalisation typically results in a significant reduction in IT infrastructure and management costs. It will also have a positive impact on the level of cultural acceptance of the new entity among staff.

After all, employees¹ transition to new systems and processes is more rapid if there is a common set of applications quickly in operation within the new company.

Businesses also need to address the issue of data migration. Post-deal, organisations often end up with duplicate copies of the same application, typically running on different versions and using different data models. In this scenario, they will need to use a proven data migration solution.

The other major issue these businesses face is data growth. Typically, newly-merged entities are faced with a significant increase in their data processing requirements and in this scenario they should be looking to store only that data necessary for day-to-day use in their primary production environment and before archiving the remainder. Enterprise data management (EDM) offers a cost-effective way of doing this.

EDM¹s key benefit is its ability to enable businesses to manage and maintain the size of their database over a given period. It allows organisations to select data within their overall production database based on a set of business rules, compress it and place the data within a separate archive file. Data can still be viewed within the native application.

Reducing the amount of information in the production database means that less disk space is required for application data, cutting storage costs. And because there is less information to assimilate, processes run faster, operations run more efficiently and organisations derive more value from mission-critical applications.

M&As often result in the creation of stronger, more dynamic businesses. They can also be a massive burden on IT resources in terms of cost of ownership and management of an expanded application portfolio together with the need to handle associated data growth and migration issues. But solutions are available and by putting a place a coherent strategy, addressing portfolio rationalisation, enterprise data management and growth, newly-merged businesses will have the platform they need to move forward positively.

Warren Daniels is marketing manager, Northern Europe and South Africa, Princeton Softech.

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