The Post-Merger and Acquisition Scramble: How to Conquer Fragmentation with Technology

Mergers and acquisitions (M&A) are part of a strategic approach to achieve growth, expand market presence and drive innovation. However, while M&As offer numerous benefits, the initial celebrations can quickly fade as the harsh reality of integration sets in. One of the biggest challenges post-merger is fragmentation – a three-headed monster that attacks people, processes and technologies alike. Ignoring it can lead to a crippling slowdown, missed opportunities and even failure to achieve the promised synergies of the M&A.

Let’s take a closer look at the ways that M&A fragmentation presents challenges for organizations like yours:

1. People: Merging two companies brings together individuals with different skills, work cultures and communication styles. And the companies being merged may have employees with varying skill sets, leading to gaps in capabilities or overstaffing in certain areas..
2. Processes: Compliance headaches erupt when two merged entities operate under distinct regulations and data residency requirements, creating complexity in data management and governance compliance. This can create operational inefficiencies and compliance issues, which may cause significant risks and penalties to the business.
3. Technologies: A tangled web of disparate enterprise resource planning (ERP) systems, customer relationship management (CRM) systems, integration solutions (middleware, API, BPM, hand-coding) and even data centers (including on-premises and cloud) creates a data management nightmare. Inconsistent data formats, entity referencing and storage systems can result in data silos and a lack of a 360-degree view of master data for customers, suppliers, products, etc. This obstructs data accessibility and analytics. Also, integrating legacy systems with modern technologies can be complex and costly.

Streamlining workflows and establishing a unified approach are crucial for smooth operations, as shown in  Figure 1 below. But integrating data from two separate entities can be a complex minefield because:

• The complexity of multiple ERPs requires consolidation to build one ERP backbone.
• Customer data is spread across CRMs with no consolidated view to run campaigns.
• Data silos exist between business entities due to the inability to cross-reference.
• No master data or reconciled view of your suppliers, materials, products, etc.
• Different skill set requirements delay delivery and operations.
• Integration is disparate among on-premises, SaaS, homegrown and multi-cloud solutions.
• Different integration tools increase complexity and maintenance overhead.
• Innovation and investments in AI/GenAI lack clarity and a qualitative data foundation.

Figure 1: Example of M&A fragmentation challenges

Leaving these issues unaddressed leads to a cascade of problems, such as:

• Wasted resources: Duplication of efforts, redundant technology subscriptions and inefficient data management drain profits.
• Poor decision-making: Inconsistent and unreliable data hinders informed decision-making, leading to missed opportunities and wasted investments.
• Customer dissatisfaction: Fragmented data results in a poor customer experience with inconsistent communication and loyalty programs.
• Compliance risks: Failure to adhere to regulations across all markets can result in hefty fines and reputational damage.

The answer lies in consolidation – creating a unified future for the merged entity. Here's how technology can be your weapon:

• ERP and CRM consolidation: Standardizing on a single ERP and CRM platform eliminates data silos, improves accuracy and streamlines operations.
• Unified integration platform: Replacing the patchwork of integration tools with a robust hybrid cloud platform ensures seamless data flow across all applications.
• Data harmonization: Creating a single source of truth by harmonizing data across different platforms.
• Data governance and management: A data governance framework ensures data quality and compliance. It also facilitates self-service analytics with AI-powered insights.

Informatica IDMC: Your One-Stop Consolidation Solution

The Informatica Intelligent Data Management Cloud (IDMC) offers a comprehensive, AI-enabled, no-code/low-code platform to tackle these challenges head-on without your workforce needing to go through a steep learning curve. It brings everything you need for data management to one place, as shown in Figure 2 below.

Figure 2: IDMC capability for M&A consolidation

The IDMC services, as shown in Figure 2 above, can add value to M&A consolidation as follows:

• Integration Platform as a Service (iPaaS): IDMC’s pre-built connectors and cloud-native architecture help you effortlessly integrate disparate systems because they were designed to handle virtually any data format and any pattern (ETL/ELT, automation, API, streaming, etc.), creating a unified data fabric over a unified technology stack to ensure accurate operations and analytics.
• Master data management (MDM): IDMC establishes a single source of truth for business-critical data, harmonizing the data and enhancing decision-making and operational efficiency.
• Cloud data governance and management: IDMC seamlessly manages data across on-premises and cloud environments and enhances data discoverability and accessibility through a comprehensive data catalog. IDMC also ensures high-quality, accurate, and consistent data through robust data governance and quality management solutions that adhere to data residency regulations.
• Advanced analytics and AI: IDMC empowers employees with self-service analytics and AI-driven insights, leading to data-driven decision-making. The marketplace and data access solution helps organizations accelerate business innovation and decision-making in a regulated and compliant manner.
• Scalability: IDMC ensures that the technology infrastructure can scale with business growth through consumption-based pricing backed by AI-powered FinOps to operate, optimize and monitor.

By leveraging IDMC, businesses can achieve:

• Reduced costs: Streamlined operations, eliminated redundancies and optimized data management lead to significant cost savings.
• Faster time to value: Faster integration, improved data quality and self-service analytics accelerate the realization of M&A synergies.
• Enhanced customer experience: A unified customer view enables personalized marketing, improved customer service and increased loyalty.
• Improved compliance: Robust data governance minimizes compliance risks across all markets and strengthens environmental, social and governance (ESG) strategies.

The success of any M&A hinges on the CXOs and board prioritizing data and technology consolidation. Investing in IDMC signifies an investment in a unified future with a proven track record of producing significant return on investment (ROI) (as shown in Figure 3), unlocking the full potential of the merger. With a shared vision and the right tools, businesses can transform fragmentation into a springboard for innovation and sustainable growth and achieve similar ROI outcomes as other customers.  

Figure 3: Nucleus RoI research on IDMC

Don't let fragmentation become the monster that devours your M&A dreams. Embrace consolidation and unlock the true potential of your combined entity.

If you’re looking for a trusted partner on your journey to help you conquer the challenges you are facing and help build a strong data foundation that propels your business toward sustainable growth and innovation, contact us.