Click to learn more about author Steele Arbeeny.
Mergers, acquisitions, and divestitures
are just as much of an undertaking for a CIO as they are for a CFO; they are
impactful on both the business and technology side. Determining which SAP
systems and data sets to migrate, integrate, or carve-out as part of the deal —
and then executing on those migrations or carve-outs — can be costly, lengthy,
and incredibly complex processes, which in turn impacts your overall timeline.
Missteps in the data migration process can result in unnecessary technical
debt, potential Transition Services Agreement penalties, and even delays in achieving
your final goals for the project.
There are some key considerations that I would recommend to companies undergoing mergers, acquisitions, or divestitures when it comes to their data migration needs. Chief among those considerations is the need to build automation into the heart of your migration or carve-out strategies and why aligning with the right software-driven partner is integral for executing a data migration or carve-out that stays on track and achieves overall timelines and goals.
Create a Clear Plan of Action
Mergers, acquisitions, and
divestitures are incredibly complex processes. Obviously, no business
undertakes one without first outlining a clear plan of action and a timeline
for that plan to proceed along. But it’s crucial that that plan also prioritizes
the data migration side of the operation; it can’t just be a business-facing
process. Data migrations and carve-outs are among the most daunting tasks that
come with executing a merger, acquisition, or divestiture — so getting it right
is critical to accomplishing the broader mission at hand.
While every company’s situation is
different, there are a few key questions that businesses undergoing a merger,
acquisition, or divestiture need to ask themselves to ensure their data needs
aren’t being overlooked:
- Do we need to
integrate the company we just bought into our ERP systems? In the case of a
divestiture: Do we need to identify and carve out data from our systems? - Does the company we’re
acquiring use SAP or another kind of ERP? Do both companies already share the
same kind of ERP? - What regulatory issues
may come up that could lengthen, halt, or delay the process? Are there any
potential TSA compliance hurdles that we might come up against?- One area to consider
is sales overlaps. With a 20 percent overlap from balance sheet to balance
sheet, this can present a significant potential regulatory obstacle.
- One area to consider
- How quickly do we need
the data migration or carve-out done?
While these may seem like fundamental
first steps, they’re crucial ones. Without a clear outline of your data needs,
you could end up in a situation where a merger, acquisition, or divestiture
results in the new company taking on excessive levels of technical debt or
violating regulatory compliance — which itself carries a whole host of new
problems with which to deal.
Putting Automation Front and Center
Whether you’re integrating or carving out data, the process is incredibly labor-intensive and rife with repetitive tasks. More than that, each decision to be made carries potentially far-reaching consequences for everything from data history preservation and master data relevance to security and compliance. In other words, getting it right the first time is business-critical.
This is all the more the reason why
automation needs to be treated as an integral part of these processes.
Automating data migrations or carve-outs ensures that the volume of menial
tasks is being executed both quickly and painlessly while leaving the more
weighted choices to be done manually. Automation ensures decision-makers are
essentially only spending their time and resources on the tasks that most
require their input — all of which enables IT teams to best allocate and
prioritize their resources for performing even the most challenging carve-out
or migration plans.
This also comes in handy in the
aftermath of the merger, where automation can speed up post-merger/acquisition
integration projects, both accelerating how quickly and seamlessly the
migration can take hold while providing a new level of insight and control over
the process that can’t otherwise be achieved through traditional, manual
approaches.
Executing with Minimal Business
Disruptions
After building a plan of action
and wrapping it around an automation-driven strategy, the next consideration
ultimately turns to the go-live date: Can your business handle a disruption
that lasts longer than a weekend? How quickly do you need to execute the data
migration, or carve-out, to avoid lengthy disruptions in your business
operations? Just how long is too long?
This might be the last step in the
process, but it’s no less critical. Being able to carry out your new data
migration or carve-out with minimal downtime or disruptions to the business is
essentially the first proving ground of how successful your new merger,
acquisition, or divestiture will be. To that end, businesses undergoing these
transformations need to ensure they’ve aligned themselves with the right
software partner ahead of time. Successful data migrations and carve-outs are
integral to the success of the newly merged or divested company and key to
averting the technical debt or TSA violations that can otherwise knock you off
track. Getting that done on time and in line with your goals requires getting
off on the right foot with the right partner.
With so much at stake, businesses
undergoing a merger, acquisition, or divestiture need nothing less than a
predictable process for executing their data migration and carve-out needs — a
software-driven, end-to-end, automated process that is predictable in its
speed, efficiency, and success rate in delivering on your goals within your
timetable.
