Information Challenges During Mergers & Acquisitions (and How to Overcome Them)

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Mergers and acquisitions (M&A) are still trending strongly past the halfway point in 2022. According to KPMG , “we expect the need for digital and business transformation to continue to be an important driver of deals across all sectors.”

Digital transformation can’t happen without a strong information management program.

We've talked about the ways that M&A initiatives can benefit from a strong records and information management (RIM) program in this newsletter before .

This week, we’ll cover the types of information challenges that can pop up during the various stages of a deal and how to overcome them.

Pre-Deal Challenges

Whether you are part of the merging or acquiring entity, it is essential to fully understand from the outset what information assets need to be managed. Here is how to tackle a few common problems before due diligence even begins:

The information management team isn’t informed about the deal ahead of time

It’s important to have a strong information management system and processes in place. But if yours is weak, impress upon leadership that it is key to have the information management team involved as early as possible.

Bringing the information management team into the fold ahead of a deal will allow them enough time to get the “house in order”. Otherwise, if a deal is imminent and resources are short, it may make sense to dedicate/hire external resources to help prepare information ahead of a deal. Bad data or unorganized information can cause significant deal delays or even cause a deal to fail.

Insufficient resources/headcount

The value of a deal can often hinge on the information that you have and know how to access. Information management should not be an afterthought. Ensure your information management team has the appropriate staff and budget to effectively manage this process.

When/if it makes sense, hire an external partner with the expertise and experience in sophisticated integration management processes to assist you through the transition.

Integrating new files/systems

If you’re on the acquiring side of the house, make sure you have a competent IT team queued up to help you through the process of integrating digital records and systems. Additionally, an information management partner with a strong background in digital transformation processes can support you and the team in converting paper files to electronic format so you can ensure a smooth and secure integration while mitigating the potential risk of lost information.

Maintaining privacy and confidentiality

One of the biggest risks during M&A is the potential of a data breach. Privacy compliance and regulatory requirements are constantly evolving so be sure everyone involved in the deal is aware of how to mitigate those risks.

Negotiation / Deal Stage Challenges

During the negotiation stage of an M&A deal, a lot of time will be spent on due diligence. There can often be extremely tight timelines and deadlines that pop up out of nowhere.

While you can’t always be ready for everything that happens during a deal, you can prepare for many by thinking ahead about potential pitfalls and how you can avoid them entirely or manage them when they do arise.

Dealing with uncertain timing

It is vital to have a strong working relationship with the IT team. By working alongside them, you’ll be able to strategize together and anticipate potential roadblocks before they happen, including risks related to the timing of information transfers. You can also plan to determine what can be done to mitigate that risk and prepare accordingly.

Integrity of information

One of the biggest challenges that can happen as you’re integrating data is having duplicates or redundant copies. Make sure you understand which files are the master records and which are just redundant data. In addition, be aware that regulatory requirements are constantly evolving. You may acquire non-compliant information and need to be ready to deal with it accordingly.

What Happens Next?

Once the purchase agreement is finalized, all stakeholders can be officially advised of the M&A details, and the final work of completing the deal begins.

During this stage, records will be prepared, file inventories will be created, and data will be transferred to the acquiring company.

Continuing to monitor the progress during the post-closing stage of the deal will help to minimize the chances of budget shortfalls and time delays while ensuring that the deal achieves its intended targets.

Conduct proactive monitoring to spot potential problems before they affect operations. Monitoring should include management reports and KPI checks as well as interviews with frontline staff.

It’s never been more important to ensure that your corporate information is ready to withstand the rigors of information-sharing requirements. Don’t get caught unprepared!?Your company’s next merger or acquisition could be right around the corner.

Join our webinar, Managing Information Through Mergers and Acquisitions , to learn how to effectively manage, share, and protect your organization’s important information during a merger, acquisition, or divestiture.

Continue learning and getting more tips - wherever you are in your information journey - by reading our M&A eBook, Managing Information Through Transition – The Mergers & Acquisitions Playbook .