Anyone who’s been through a merger or acquisition knows that data and information governance rarely shows up as a distinct part of the due diligence process. Pieces may surface in IT, legal, privacy, security, or compliance reviews, but they tend to be examined independently and in narrower contexts. That’s a missed opportunity because what happens after the deal closes often depends less on the systems than on the information contained therein – and the institutional knowledge surrounding it.
Case in Point
Consider my client in HR at a major software company who had to untangle the benefits requirements of his now-combined organization. He had inherited several solutions in varying degrees of fitness and needed to determine which employees remained with the company, which had left and returned, which had retired, and so on – all to ensure that people who were entitled to benefits continued to receive them, and those who weren’t, didn’t.
Though the diligence process had revealed the existence of multiple solutions, it didn’t address the condition of the information they contained, the governing policies and procedures, or the workarounds that were created to bypass operational bottlenecks. Consequently, my client had to spend months learning the lay of the data – much of which he could have sussed out a lot sooner, before some of the people who knew the answers were made redundant and let go.
And therein lies the governance lesson.
Your Acquiring Mind Should Want to Know
Mergers and acquisitions involve the reconciliation and integration of not only systems and repositories, but also their content and the organization’s processes, obligations, history, and habits.
Some of the information will be valuable, some will be redundant, and some may be subject to retention requirements. There may be privacy regulations to comply with, contractual restrictions to abide by, or other rules to follow – along with cultural mores that may be critical to understanding how everything actually works. These are inquiries that can and should be begun as part of the initial diligence because the responses will signal how much work awaits once the transaction closes.
The idea isn’t to add another layer to an already complicated M&A process – it’s to make the diligence more practical in order to minimize the unpleasant surprises that inevitably surface when the deal is done. Nowhere is this needed more than in data and information. A governance mindset, therefore, is a must-have from the start.