Don't wait for a merger or acquisition to justify data integration

Data integration gets the priority treatment when there's been a merger or acquisition (M&A).  After all the press releases and analysts' reviews of an acquisition, the companies involved have to roll up their sleeves, settle in, and work towards a successful and profitable M&A.

As explained here, these big-ticket projects often include:

• Consolidated Financial Reporting
• Customer Upsell/Cross-sell
• “Back Office Efficiencies”
• ERP Consolidation

But I'd like to pose a more fundamental question: Why limit the data-integration focus to M&A activities? Yes, it's obvious that when companies are involved in M&A they need to integrate their application and data silos to increase the top line (revenue), decrease the bottom line (costs), and ultimately increase profits. But, knowing this, and knowing that most (all?) companies have application/data silos, why isn't it obvious that they need to integrate that data to improve business?

The M&A data-integration activities are undertaken with a sense of urgency because it makes business and technical sense to do them – plus, M&A shines a new spotlight on both companies. But meanwhile, other companies sit back and accept their silos, as if that is simply the way it should be.

Do they need the kick-in-the-pants of an M&A to get their data-integration efforts in gear?

Companies that have data silos desperately need Enterprise Data Warehousing (EDW) whether they are involved in a recent M&A or not. A survey of global C-level executives conducted by the Economist Intelligence Unit (EIU) found that over 90% do not feel they have the necessary information needed to make critical business decisions, and more than half worry that as a result of missing information they may be making poor business decisions.

This is startling to hear, given the context of the investment that companies have made in information systems. Then again, it's not surprising at all when you see all the application/data silos and the lack of an effective Enterprise Data Management (EDM) effort at many companies.

In fact, even many companies' efforts towards EDM are silo'd with SOA (service oriented architecture), CPM (Corporate Performance Management), MDM (master data management), and CDI (customer data integration). They all have their own budgets, resources and projects – working independently – to solve integration issues. It's ironic that these projects result in more silos because they do not have an EDM foundation. Also, their data warehousing and ERP (enterprise resource planning) application projects are separate and often not coordinated. I'd dare say those executives have plenty of data, but not enough information.

When you look at these silos in your own company ask yourself if they would be acceptable if you were involved in an M&A.  And if you are trying to justify an EDM program including data governance and an ICC (integration competency center) to the business, then examine the “obvious” business and technical ROI that companies use to push forward these projects when they feel the sense of urgency during M&A.

As the EIU survey noted, one in ten executives don't feel they have the necessary information needed to make critical business decisions.

That should be all the kick-in-the-pants you need.

 

Comments

[Tech Junkie]

this is a great article on ways to make better business decisions using Business Intelligence software. Many people do not realize that information is their biggest asset in a company.